Case Title: R. Hemalatha v. Kashthuri
The bench of Justices M.R. Shah and Krishna Murari was dealing with the appal challenging the order passed by the Madras High Court by which the High Court has allowed the revision application preferred by the respondent wherein the court held that an unregistered Agreement to Sell, which is otherwise required to be compulsorily registered, shall be admissible in evidence in a suit for specific performance in terms of Proviso to Section 49 of Registration Act. The only exception to the Proviso of Section 49 would be documents mentioned in Section 17(1A) of Registration Act
In this case, the respondent is an original plaintiff who instituted civil suit for specific performance of the Agreement to Sell wherein the Trial Court framed a preliminary issue on the admissibility of the Agreement to Sell in evidence.
It was the case on behalf of the defendant that in view of the Tamil Nadu Amendment Act No.29 of 2012 to the Indian Registration Act, which requires compulsory registration of agreements relating to sale of immovable property valued at Rs. 100 or above, the said unregistered document, shall be inadmissible in evidence.
On the other hand, relying upon the proviso to Section 49, it was submitted that an unregistered Agreement to Sell can be admitted as evidence of a contract in a suit for specific performance. The Trial Court held that the unregistered Agreement is not admissible in evidence.
Feeling aggrieved and dissatisfied with the order of the Trial Court, the plaintiff preferred the revision application before the High Court. The High Court directed that the unregistered Agreement to Sell be received in evidence. The Defendant filed an appeal before the Supreme Court challenging the High Court’s order.
The issue for consideration before the bench was:
Whether such unregistered agreement relating to sale of immovable property can be received in evidence in a suit for specific performance?
The bench observed:
“Under the circumstances, as per proviso to Section 49 of the Registration Act, an unregistered document affecting immovable property and required by Registration Act or the Transfer of Property Act to be registered, may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as evidence of any collateral transaction not required to be effected by registered instrument, however, subject to Section 17(1A) of the Registration Act. It is not the case on behalf of either of the parties that the document/ Agreement to Sell in question would fall under the category of document as per Section 17(1A) of the Registration Act”.
The bench dismissed the appeal while holding that the High Court has rightly observed and held relying upon proviso to Section 49 of the Registration Act that the unregistered document in question namely unregistered Agreement to Sell in question shall be admissible in evidence in a suit for specific performance and the proviso is exception to the first part of Section 49.