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TMI Blog2025 (1) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... of the suit or proceedings) would not require compulsory registration - To avail the exemption from the mandate of compulsory registration of documents conveying immovable property of a value of more that Rs 100/-, the compromise decree arrived must be only in respect of the property that is the subject-matter of the suit. The compromise arrived at before the Lok Adalat and the award passed by the Lok Adalat thereto assume the character of a decree passed under Order XXIII Rule 3 and would also come within the ambit and purview of sub-section (2) of section 17 of the Act, 1908. The appellant is entitled to possession of the subject land and the Respondent No.2 shall not interfere with the same; and the appellant is entitled to get his name recorded in the revenue records in respect of the subject land in the place of the Respondent No.2. Pertinently, it is to be pointed out that the said compromise decree has not been challenged by the Respondent No.1 before any Court of law and hence, the same attained finality and is binding on the parties. Though the Respondent No.1 alleged that the suit was filed by the appellant in collusion with the Respondent No.2 and within a short time fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , JJ. For the Petitioner : Ms. Christi Jain, AOR For the Respondent : Mr. V.v.v. Pattabhiram, D.A.G. Ms. Mrinal Gopal Elker, AOR Mr. Chinmoy Chaitanya, Adv. Ms. Chhavi Khandelwal, Adv. Ms. Shruti Verma, Adv. Mr. Rajan K Chaurasia, Adv JUDGMENT R. MAHADEVAN, J. 1. Leave granted. 2. This appeal has been filed against the Order dated 06.12.2019 passed by the High Court of Madhya Pradesh, Bench at Indore Hereinafter referred to as the High Court in dismissing the Miscellaneous Petition bearing No.3317 of 2019 filed by the appellant herein. By the said order, the High Court upheld the order dated 23.08.2016 passed by the Collector of Stamps, determining stamp duty at Rs.6,67,500/- payable by the appellant qua land in Survey No.2087, 2088/9/1/1 measuring an extent of 0.076 Ares situated at Village Kheda, Tehsil Badnawar, District Dhar Hereinafter referred to as the subject land , acquired by him by way of consent decree, as affirmed by the Board of Revenue by order dated 12.02.2019. 3. Originally, the appellant had filed a Civil Suit bearing No.47-A/2013 before the Court of First Civil Judge, Class-2, Badnawar, for declaration and permanent injunction against one Abhay Kumar (Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stration and for this reason, stamp duty is also required to be paid. Being dissatisfied with the same, this appeal came to be filed by the appellant before this court. 4. According to the learned counsel for the appellant, the issue involved in this matter is squarely covered by the judgment of this Court in Mohd. Yusuf v. Rajkumar (2020) 10 SCC 264 , wherein, the order dated 13.02.2017 passed in W.P.No.2170/2015 relied on by the High Court in the order dated 24.07.2019 passed in M.P.No.3634 of 2019, based on which, the order impugned herein came to be passed by the High Court, has been set aside, by holding that a compromise decree does not require registration. It was further clarified in the said judgment that a compromise decree comprising immovable property other than which is the subject matter of the suit or proceeding requires registration, although any decree or order of a court is exempted from registration by virtue of Section 17(2)(vi) of the Registration Act, 1908 . 4.1. Adding further, the learned counsel submitted that the High Court erred in placing reliance on its earlier order dated 24.07.2019 made in M.P.No.3634/2019 (Siddhulal case), as the facts of the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel, the Collector of Stamps has not gone into the question of registration, but has determined the stamp duty payable by the appellant for the subject land, which was also rightly affirmed by the Board of Revenue, by order dated 12.02.2019 in the revision preferred by the appellant. 5.2. The learned counsel further submitted that admittedly, the subject land was not recorded in the name of the appellant in the revenue records maintained by the State and there was a dispute regarding title of the property. As such, the protection claimed by the appellant under Section 17(2)(vi) of the Registration Act, 1908, does not hold good. 5.3. That apart, it is contended by the learned counsel that the present case seems to be a case of collusion between the appellant and Respondent No.2 and the Civil Suit was instituted only with an intent to evade the payment of stamp duty. 5.4. The learned counsel for the Respondent No.1 ultimately submitted that in view of the settled legal position and taking note of the facts and circumstances indicated above, the decision in Mohd. Yusuf v. Rajkumar [(2020) 10 SCC 264] is factually distinguishable and therefore, the appellant is liable to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section any lease executed in any district, or part of a district, the terms granted by which do not exceed five years and the annual rents reserved by which do not exceed fifty rupees. [(1A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of section 53A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the Registration and Other Related laws (Amendment) Act, 2001 (48 of 2001) and if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said section 53A.] (2) Nothing in clauses (b) and (c) of sub-section (1) applies to (i) any composition deed; or (ii) any instrument relating to shares in a joint stock Company, notwithstanding that the assets of such Company consist in whole or in part of immovable property; or (iii) any debenture issued by any such Company and not creating, declaring, assigning, limiting or extinguishing any right, title or interest, to or in immovable property except in so far as it entitles the holder to the security afforded by a registered instrument where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 17(1) of the Act, 1908 specifies the documents for which Registration is compulsory. Sub-section (2) of Section 17 carves out the exceptions. The documents/instruments enumerated in sub-section (2) of section 17 are not compulsorily registerable. The exemption for decree or order of the Court is covered under section 17(2)(vi) of the Act, 1908 with a rider. Under the said provision, any decree or order of a Court (except the decree or order expressed to be made on compromise and comprising immovable property other than that which is the subject-matter of the suit or proceedings) would not require compulsory registration. Section 17(2)(vi) carves out the distinction between the property which forms subject-matter of the suit and the property that was not the subject-matter of the suit, but for which a compromise has been arrived at. It would be relevant to point out that the provision permitting the compromise between the parties to include in the compromise decree, the subject matter not forming part of the suit property was introduced with effect from 01.02.1977. Prior to that, the compromise decree can be passed only with respect to properties or subject matter of suit. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Decree be prepared in accordance with compromise. Compromise shall be an integral part of this decree. In view of the above, the appellant is entitled to possession of the subject land and the Respondent No.2 shall not interfere with the same; and the appellant is entitled to get his name recorded in the revenue records in respect of the subject land in the place of the Respondent No.2. Pertinently, it is to be pointed out that the said compromise decree has not been challenged by the Respondent No.1 before any Court of law and hence, the same attained finality and is binding on the parties. 9. It is further seen that on the strength of the compromise decree passed by the civil court, the appellant approached the Tehsildar for mutation of the subject land in his favour. However, the Tehsildar referred the case to the Collector of Stamps, who after examination, determined the stamp duty under Article 22 of Schedule IA of the Indian Stamp Act, 1899 and directed the appellant to pay a sum of Rs.6,67,500/- in the Government Treasury. The said order of the Collector of Stamps was affirmed by the Board of Revenue, in the revision filed by the appellant. The High Court has also upheld the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immovable property other than that which is the subject-matter of the suit or proceeding. Thus, by conjointly reading Section 17(1)(b) and Section 17(2)(vi), it is clear that a compromise decree comprising immovable property other than which is the subject-matter of the suit or proceeding requires registration, although any decree or order of a court is exempted from registration by virtue of Section 17(2)(vi). A copy of the decree passed in Suit No. 250-A of 1984 has been brought on record as Annexure P-2, which indicates that decree dated 4- 10-1985 was passed by the Court for the property, which was subject-matter of the suit. Thus, the exclusionary clause in Section 17(2)(vi) is not applicable and the compromise decree dated 4-10-1985 was not required to be registered on plain reading of Section 17(2)(vi). The High Court referred to judgment of this Court in Bhoop Singh Vs. Ram Singh Major and Others, (1995) 5 SCC 709, in which case, the provision of Section 17(2)(vi) of Registration Act came for consideration. This Court in the above case while considering clause (vi) laid down following in paragraphs 16, 17 and 18:- 16. We have to view the reach of clause (vi), which is an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Council, according to which the original clause would have been attracted, even if it were to encompass property not litigated. 8. In the facts of that case, this Court held that the first suit cannot really be said to have been decreed on the basis of compromise, as the suit was decreed in view of the written statement filed by the defendant admitting the claim of the plaintiff to be correct . Further, the earlier decree was held to be collusive. Two reasons for holding that the earlier decree in the above said case required registration have been mentioned in paragraph 19 of the judgment, which is to the following effect:- 19. Now, let us see whether on the strength of the decree passed in Suit No. 215 of 1973, the petitioner could sustain his case as put up in his written statement in the present suit, despite the decree not having been registered. According to us, it cannot for two reasons: (1) The decree having purported to create right or title in the plaintiff for the first time that is not being a declaration of pre-existing right, did require registration. It may also be pointed out that the first suit cannot really be said to have been decreed on the basis of compromise, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Limitation Act is found to be devoid of any merit since it relates to the extinction of the right of the lawful owner after expiry of the Limitation Act, but in view of the judgment of the supreme court in the matter of Gurudwara Sahib (supra), the petitioner cannot claim himself to be the owner automatically after the expiry of the said limitation. 10. The judgment of Gurdwara Sahib Vs. Gram Panchayat Village Sirthala and Another (supra) has now been expressly overruled by a Three Judge Bench judgment in Ravinder Kaur Grewal and Others Vs. Manjit Kaur and Others, (2019) 8 SCC 729. This Court held in the above case in paragraph 62 that once 12 years' period of adverse possession is over, even owner's right to eject him is lost and the possessory owner acquires right, title and interest possessed by the outgoing person/owner. 11. In para 62, following has been laid down: (Ravinder Kaur Grewal case, SCC pp.778-78) 62. We hold that a person in possession cannot be ousted by another person except by due procedure of law and once 12 years period of adverse possession is over, even owner s right to eject him is lost and the possessory owner acquires right, title and interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of the Court including compromise decree subject to the exception as referred that the properties that are outside the subject-matter of the suit do not require registration. In para 18, this Court laid down the following: (SCC p. 800) 18. But with respect, it must be pointed out that a decree or order of a court does not require registration if it is not based on a compromise on the ground that clauses (b) and (c) of Section 17 of the Registration Act are attracted. Even a decree on a compromise does not require registration if it does not take in property that is not the subject-matter of the suit. 16. In the facts of the present case, the decree dated 4-10-1985 was with regard to the property, which was the subject-matter of the suit, hence not covered by exclusionary clause of Section 17(2)(vi) and the present case is covered by the main exception crafted in Section 17(2)(vi) i.e. any decree or order of a court . When registration of an instrument as required by Section 17(1)(b) is specifically excluded by Section 17(2)(vi) by providing that nothing in clauses (b) and (c) of sub-section (1) applies to any decree or order of the court, we are of the view that the compromise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right in the property, it was found that decree does not require registration. In K. Raghunandan case [K. Raghunandan v. Ali Hussain Sabir, (2008) 13 SCC 102], the dispute was not amongst the family members but between neighbours regarding right over passage. Obviously, none of them had any pre-existing right over the immovable property in question. 18. In view of enunciation of law in Bhoop Singh case [Bhoop Singh v. Ram Singh, (1995) 5 SCC 709], we find that the judgment [Tikka Maheshwar Chand v. Ripudaman Singh, 2016 SCC OnLine HP 3808] and decree of the High Court holding that the decree requires compulsory registration is erroneous in law. The compromise was between the two brothers consequent to death of their father and no right was being created in praesenti for the first time, thus not requiring compulsory registration. Consequently, the appeal is allowed and the suit is decreed. Thus, it could be discernible that in order to fall under the exception of Section 17(2)(vi) of the Act, 1908, the following conditions must be satisfied: (i) There must be a compromise decree as per the terms of the compromise without any collusion; (ii) The compromise decree must pertain to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, no concrete evidence was placed before this court to substantiate that the same. That apart, it is not the case of the Respondent No.1 - State that the suit itself was collusive as the property was not in possession of the appellant and that it belongs to any other third party. Such rival claim by any other person other than the defendant has not been brought to our knowledge. Obviously, the case before us is not a title dispute, but rather one relating to registration and payment of stamp duty and therefore, we leave the issue there. Under the above circumstances, we have no option but to hold that the compromise decree is by way of collusion, cannot be accepted. As already indicated above, the compromise decree reached finality, as the Respondent No.1 has not challenged the same. There is no finding of collusion between the parties in entering into the compromise by any Court as on date. Indisputably, the property is the subject matter of the suit. Thus, the appellant has satisfied the conditions enumerated in section 17(2)(vi) of the Act, 1908 and hence, the subject land acquired by him by way of compromise decree, requires no registration. 13. In respect of the issue relatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh and is received in Madhya Pradesh: Provided further that no duty shall be chargeable in respect of- (1) any instrument executed by, or on behalf of, or in favour of, the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument; (2) any instrument for the sale, transfer or other disposition, either absolutely, or by way of mortgage or otherwise, of any ship or vessel, or any part, interest, share or property of or in any ship or vessel registered under the Merchant Shipping Act, 1894 or under Act 19 of 1838, or the Indian Registration of Ships Act, 1841 as amended by subsequent Acts. From the above, it is apparent that stamp duty is not chargeable on an order/decree of the Court as the same do not fall within the documents mentioned in Schedule I or I-A read with Section 3 of the Indian Stamp Act, 1899. Though the Collector of Stamps determined the stamp duty for the subject land as per Article 22 of Schedule IA of the Indian Stamp Act, 1899, which states about conveyance, in this case, we have already held that the compromise decree does not fall under the instruments mentioned in the Schedule and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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