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2010 (4) TMI 1184 - SC - Indian LawsAdmissibility of an unregistered sale deed in evidence - oral agreement to sell the suit property - The plaintiff in the suit claimed for the reliefs of directing the defendants to execute a fresh sale deed with regard to the suit property in pursuance of an oral agreement for sale on or before the date that may be fixed by the court and failing which execution of the sale deed by the court. She also prayed for grant of permanent injunction restraining the defendants from disturbing with her peaceful possession and enjoyment of the suit property. HELD THAT - We are of the opinion that having regard to the proviso to Section 49 of the Registration Act, 1908 (for short,1908 Act'), the trial court erred in not admitting the unregistered sale deed dated 27.02.2006 in evidence and the High Court ought to have corrected the said error by setting aside the order of the trial court. Recently in the case of K.B. Saha and Sons Private Limited v. Development Consultant Limited 2008 (5) TMI 708 - SUPREME COURT , This Court culled out the following principles - 1. A document required to be registered, if unregistered is not admissible into evidence u/s 49 of the Registration Act. 2. Such unregistered document can however be used as an evidence of collateral purpose as provided in the proviso to Section 49 of the Registration Act. 3. A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration. 4. A collateral transaction must be a transaction not itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immovable property of the value of one hundred rupees and upwards. 5. If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose. To the aforesaid principles, one more principle may be added, namely, that a document required to be registered, if unregistered, can be admitted in evidence as evidence of a contract in a suit for specific performance. The main provision in Section 49 provides that any document which is required to be registered, if not registered, shall not affect any immovable property comprised therein nor such document shall be received as evidence of any transaction affecting such property. Proviso, however, would show that an unregistered document affecting immovable property and required by 1908 Act or the Transfer of Property Act, 1882 to be registered may be received as an evidence to the contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by registered instrument. By virtue of proviso, therefore, an unregistered sale deed of an immovable property of the value of ₹ 100/- and more could be admitted in evidence as evidence of a contract in a suit for specific performance of the contract. Such an unregistered sale deed can also be admitted in evidence as an evidence of any collateral transaction not required to be effected by registered document. When an unregistered sale deed is tendered in evidence, not as evidence of a completed sale, but as proof of an oral agreement of sale, the deed can be received in evidence making an endorsement that it is received only as evidence of an oral agreement of sale under the proviso to Section 49 of 1908 Act. If any issue with regard to the admissibility of unregistered sale deed dated 27.2.2006 in evidence has been struck by the trial court, obviously, such issue would be decided in accordance with law. Suffice, however, to say that looking to the nature of the suit, which happens to be a suit for specific performance, the trial court was not justified in refusing to admit the unregistered sale deed dated 27.2.2006 tendered by the plaintiff in evidence. The argument of the respondents with regard to Section 3(b) of 1963 Act is noted to be rejected. We fail to understand how the said provision helps the respondents as the said provision provides that nothing in 1963 Act shall be deemed to affect the operation of 1908 Act, on documents. By admission of an unregistered sale deed in evidence in a suit for specific performance as evidence of contract, none of the provisions of 1908 Act is affected; rather court acts in consonance with proviso appended to Section 49 of 1908 Act. The result is that appeal is allowed, The trial court shall mark the unregistered sale deed dated 27.2.2006 tendered by the plaintiff in her evidence and proceed with the suit accordingly.
Issues Involved:
1. Admissibility of an unregistered sale deed in a suit for specific performance. 2. The applicability of Section 49 of the Registration Act, 1908. 3. The relationship between the Registration Act, 1908, and the Specific Relief Act, 1963. 4. The procedural requirements for registration refusal and subsequent remedies. Issue-wise Detailed Analysis: 1. Admissibility of an Unregistered Sale Deed in a Suit for Specific Performance: The core issue addressed was whether an unregistered sale deed could be admitted as evidence in a suit for specific performance. The plaintiff sought specific performance of an oral agreement dated 27.02.2006, claiming that the defendants had agreed to sell a property, received the full consideration, and handed over possession, but the sale deed could not be registered due to an attachment order. The trial court and High Court initially refused to admit the unregistered sale deed as evidence. However, the Supreme Court held that under the proviso to Section 49 of the Registration Act, 1908, an unregistered sale deed can be admitted as evidence of a contract in a suit for specific performance. 2. Applicability of Section 49 of the Registration Act, 1908: Section 49 of the Registration Act, 1908, stipulates that an unregistered document required to be registered shall not affect any immovable property nor be received as evidence of any transaction affecting such property. However, the proviso allows such a document to be received as evidence of a contract in a suit for specific performance. The Supreme Court emphasized that the trial court erred in not admitting the unregistered sale deed dated 27.02.2006 in evidence, and the High Court should have corrected this error. 3. Relationship Between the Registration Act, 1908, and the Specific Relief Act, 1963: The defendants argued that the Registration Act, 1908, being a complete code, should govern disputes regarding registration, and the Specific Relief Act, 1963, should not be invoked. They contended that the plaintiff should have sought an endorsement of "registration refused" and then applied under Section 73 of the Registration Act. However, the Supreme Court clarified that the Specific Relief Act and the Registration Act cover overlapping fields but do not supersede each other. A suit for specific performance is broader, encompassing not just the registration of a sale deed but also other reliefs like recovery of possession. 4. Procedural Requirements for Registration Refusal and Subsequent Remedies: The defendants claimed that they refused to register the sale deed due to fraud by the plaintiff, who allegedly misrepresented the agreement for sale as a full-fledged sale deed. They argued that the plaintiff should have followed the procedure under Sections 71 to 77 of the Registration Act for registration refusal. The Supreme Court, however, noted that the issue before it was solely the admissibility of the unregistered sale deed in evidence. The Court held that the trial court should have admitted the unregistered sale deed as evidence of the contract, as per the proviso to Section 49 of the Registration Act. Conclusion: The Supreme Court allowed the appeal, set aside the orders of the High Court and the trial court, and directed the trial court to admit the unregistered sale deed dated 27.02.2006 as evidence. The Court emphasized that admitting the unregistered sale deed as evidence of a contract in a suit for specific performance does not contravene the provisions of the Registration Act, 1908, but rather aligns with the proviso to Section 49 of the Act. The parties were directed to bear their own costs.
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