Unregistered document affecting immovable property can be an admissible evidence of contract in a suit for specific performance: Supreme Court

Supreme Court: In a civil appeal against an order of Madras High Court dated 26-02-2021, whereby the High Court held that the appellant’s unstamped and unregistered agreement to sell (document) cannot be brought on record; the division bench of Pamidighantam Sri Narasimha and Joymalya Bagchi, JJ., perusing the facts of the case, permitted the appellant that the document sought to be brought on record under Section 49 of the Registration Act, 1908.

Background

The case involved a property dispute where the document’s photocopy admissibility in the record was in question. On 01-01-2000 the appellant and the respondent entered into an agreement for the sale of the respondent’s property of which the appellant paid the part consideration of Rs. 5000 and also put the appellant in possession of the property. Subsequently, on 01-09-2002, it was alleged by the appellant that the parties have agreed that the property should be sold at the rate of Rs. 550 per cent and in furtherance of the said transaction the appellant also paid a sum of Rs. 10,000/- and was said to have paid balance consideration from time to time.

However, as the respondent was not taking any steps for executing the sale deed, the appellant instituted a suit for specific performance of the agreement and for a permanent injunction. In furtherance of this, the appellant filed an interlocutory application under Order 7, Rule 14 (3) read with Section 151 of the Civil Procedure Code, 1908 (CPC), for bringing on record and marking the said document. The appellant gave the reason that he was unable to produce the said document, because it got mixed up with other documents. However, the appeal was dismissed by the Trial Court stating the reasons for not producing the original were not convincing and also that the said document was unstamped and unregistered and as such barred under Section 35 of the Stamp Act, 1989, and that Section 17 of the Registration Act, 1908.

The appellant then filed a Civil Revision Petition before the High Court wherein it washeld that the document was unstamped and unregistered therefore cannot be brought on record. The appellant submitted that the courts below have disregarded the proviso to Section 49 of the Registration Act which allows tendering of documents that endorses an oral agreement for sale. In support of his contention, the appellant relied on the decision of the Supreme Court in S. Kaladevi v. V.R. Somasundaram, (2010) 5 SCC 401. The appellant also submitted that reliance on Section 17(1A) of the Registration Act was not correct in as much as the document was executed on 01-01-2000.

Analysis and Decision

After considering the matter in detail the Court opined that the prayer of the appellant in the interlocutory application fell under the proviso of the Section 49 of the Registration Act which provides that “an unregistered document affecting immovable property may be received as evidence of a contract in a suit for specific performance.” The proviso also enables the said document to be received in evidence of a collateral transaction.

The Court also pointed out that in S. Kaladevi (supra), the Supreme Court had held that “an unregistered document may be received as evidence of a contract in a suit seeking specific performance.”

The Court noted the appellant’s contention that the document in question was brought on record, only to be used as a proof of the oral agreement of sale and the same is permitted under Section 49. The Court did not express any opinion on the contents of the document and left the issue open for the respondent to raise and contest the relevancy and validity of the document.