2023 (4) TMI 1408 - SC - Indian Laws

Interpretation of statute - Section 17(1)(g) of the Registration Act as amended by the Tamil Nadu Amendment Act 2012 and the proviso to Section 49 of the Registration Act - whether an unregistered Agreement to Sell which is compulsorily registrable under the Tamil Nadu Amendment Act 2012 can be received as evidence in a suit for specific performance? - HELD THAT - As per proviso to Section 49 an unregistered document affecting the immovable property and required by Registration 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 document. At this stage the primary statement of objects and reasons to the Tamil Nadu Amendment Act 2012 is also required to be referred to and considered. The primary statement of objects and reasons seem to suggest that amendment has been introduced by the State of Tamil Nadu bearing in mind the loss to the exchequer as public were executing the documents relating to sale of immovable property etc. on white paper or on stamp paper of nominal value. At this stage it is required to be noted that the proviso to Section 49 came to be inserted vide Act No. 21 of 1929 and thereafter Section 17(1A) came to be inserted by Act No. 48 of 2001 with effect from 24.09.2001 by which the documents containing contracts to transfer or consideration any immovable property for the purpose of Section 53 of the Transfer of Properties Act is made compulsorily to be registered if they have been executed on or after 2001 and if such documents are not registered on or after such commencement then there shall have no effect for the purposes of said Section 53A. So the exception to the proviso to Section 49 is provided under Section 17(1A) of the Registration Act. Otherwise the proviso to Section 49 with respect to the documents other than referred to in Section 17(1A) shall be applicable. 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. Conclusion - 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. PPetition dismissed.

Summary

ISSUES PRESENTED and CONSIDERED

The core legal question considered by the Supreme Court was whether an unregistered Agreement to Sell, which is compulsorily registrable under the Tamil Nadu Amendment Act, 2012, can be received as evidence in a suit for specific performance. This issue revolves around the interpretation of Section 17(1)(g) of the Registration Act as amended by the Tamil Nadu Amendment Act, 2012, and the proviso to Section 49 of the Registration Act.

ISSUE-WISE DETAILED ANALYSIS

Relevant Legal Framework and Precedents

The legal framework primarily involves the Registration Act, 1908, specifically Sections 17 and 49, as amended by the Tamil Nadu Amendment Act, 2012. Section 17(1)(g) mandates compulsory registration of agreements relating to the sale of immovable property valued at Rs. 100 and upwards. The proviso to Section 49 allows unregistered documents affecting immovable property to be admitted as evidence of a contract in a suit for specific performance.

Court's Interpretation and Reasoning

The Court analyzed the legislative intent behind the Tamil Nadu Amendment Act, 2012, which aimed to prevent loss to the exchequer due to unregistered transactions on nominal stamp paper. It noted that while Section 17(1)(g) requires registration of agreements to sell, there was no corresponding amendment to Section 49. The Court emphasized the proviso to Section 49, which permits the admission of unregistered documents as evidence in specific performance suits, thus creating an exception to the general rule of inadmissibility.

Key Evidence and Findings

The primary evidence in question was the unregistered Agreement to Sell dated 10.09.2013. The Trial Court initially deemed it inadmissible based on the Tamil Nadu Amendment Act. However, the High Court reversed this decision, relying on the proviso to Section 49, which the Supreme Court upheld.

Application of Law to Facts

The Court applied the proviso to Section 49 to the facts, determining that the unregistered agreement could be admitted as evidence of a contract in the specific performance suit. The absence of an amendment to the proviso to Section 49, despite the Tamil Nadu Amendment, was pivotal in the Court's decision.

Treatment of Competing Arguments

The appellant argued that admitting the unregistered agreement would render the 2012 amendment meaningless, as it was intended to enforce compulsory registration. The respondent countered, citing the proviso to Section 49, which allows such documents in specific performance suits. The Court sided with the respondent, emphasizing the legislative gap in not amending the proviso to Section 49.

Conclusions

The Court concluded that the unregistered Agreement to Sell is admissible in evidence under the proviso to Section 49, despite the compulsory registration requirement under Section 17(1)(g) of the Tamil Nadu Amendment Act, 2012.

SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning

The Court stated, "As per proviso to Section 49 of the Registration Act, an unregistered document affecting immovable property and required by Registration 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."

Core Principles Established

The decision reinforces the principle that unregistered agreements can be admitted in specific performance suits under the proviso to Section 49, notwithstanding state amendments requiring compulsory registration.

Final Determinations on Each Issue

The Supreme Court dismissed the appeal, affirming the High Court's decision to admit the unregistered Agreement to Sell as evidence in the suit for specific performance. The Court held that the proviso to Section 49 serves as an exception to the general rule of inadmissibility for unregistered documents affecting immovable property.