unregistered documents
relating to immoveable propErties
The validity of unregistered agreement has often
been the subject matter of deliberation in courts with regard to any rights if
accrued or enforceable on that premise. The Registration Act 1908 , though, has
contained the relevant provisions, mandating registration of any title or
conveyance or even interest in respect of immoveable properties still, the
transactions as regards immoveable properties are in vogue and thus filling the
disputes to be deliberated and adjudicated by Courts of law.
Recently,
Supreme Court has dealt with this issue in a matter captioned as SHAKEEL
AHMED VERSUS SYED AKHLAQ HUSSAIN Civil Appeal No.1598 of 2023. At the very outset, para 10 of the
judgment in the above case may be referred to as under:
“10. Having considered the submissions at
the outset, it is to be emphasized that irrespective of what was decided in the
case of Suraj
Lamps and Industries183
(2011) DLT 1 (SC)
the fact remains that no title could be transferred with respect to immovable
properties on the basis of an unregistered Agreement to Sell or on the basis of
an unregistered General Power of Attorney. The Registration Act, 1908 clearly
provides that a document which requires compulsory registration under the Act,
would not confer any right, much less a legally enforceable right to approach a
Court of Law on its basis. Even if these documents i.e. the Agreement to Sell
and the Power of Attorney were registered, still it could not be said that the
respondent would have acquired title over the property in question. At best, on
the basis of the registered agreement to sell, he could have claimed relief of
specific performance in appropriate proceedings. In this regard, reference may
be made to sections 17 and 49 of the Registration Act and section 54 of the
Transfer of Property Act, 1882”.
It is held further:
11. Law is well settled that no right,
title or interest in immovable property can be conferred without a registered
document. Even the judgment of this Court in the case of Suraj Lamps & Industries (supra) lays down the same proposition.
Reference may also be made to the following judgments of this Court:
(i)
Ameer Minhaj Vs. Deirdre Elizabeth (Wright) Issar and
Others (2018) 7
SCC 639
(ii)
Balram Singh Vs. Kelo Devi In
Civil Appeal No. 6733 of 2022
(iii)
M/S Paul Rubber Industries Private Limited Vs. Amit Chand
Mitra & Anr In SLP (C) No. 15774 of 2022.”
The
embargo put on registration of documents would not override the statutory
provision so as to confer title on the basis of unregistered documents with
respect to immovable property. Once this is the settled position, the
respondent could not have maintained the suit for possession and mesne profits
against the appellant, who was admittedly in possession of the property in
question whether as an owner or a licensee.
The
judgment in Suraj
Lamps & Industries (supra)
would be prospective is also misplaced. The requirement of compulsory
registration and effect on non-registration emanates from the statutes, in
particular the Registration Act and the Transfer of Property Act. The ratio in Suraj Lamps & Industries (supra) only approves the provisions in
the two enactments. Earlier judgments of this Court have taken the same view.
Ameer Minhaj Vs. Deirdre Elizabeth (Wright) Issar and
Others (2018) 7 SCC 639
The core issue in the above case was whether the suit based
on an agreement and on the basis of which relief of specific performance
has been claimed, could be received as evidence as it is not a registered document.
Section 17 may be perused as under:
“17. Documents of which registration is compulsory:
(1)
The following documents shall be registered, if the
property to which they relate is situate in a district in which, and
if they have been executed on
or after the date on which, Act No. XVI of 1864
or The Indian Registration Act 1866, or the Indian Registration Act,1871,
or the Indian Registration Act,1877, or this Act came or
comes into force, namely:
(1A) The documents containing contracts to transfer for
consideration, any immoveable property for the purpose of section 53 A 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 of the Registration and Other Related laws(Amendment)
Act, 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.
It may also be apt to illustrate as to which instruments relating
to immoveable property shall have to be mandatorily registered as per Secrion17,
if the value, if more than Rs 100/-:
(a) Instruments
of Gift;
(b) Other non
testamentary instruments which creates or purports to create, declare, assign,
limit or extinguish , whether vested or contingent;
(c) Non-testamentary
instruments acknowledging receipt or payment of any consideration relating to creation,
declaration, assignment, limitation or extinguishment of any right, title,
interest;
(d) Lease from
year to year or for any term exceeding one year or reserving yearly rent;
(e) Other non-testamentary
instruments assigning, transferring any decree or order of court when it
purports to create or create, declare, assign, limit or extinguish any right,
title or interest whether vested or contingent
However, the following shall be exempted from the aforesaid
Section 17 (1) (b) & (c):
(i)
Any composite deed;
(ii)
Instruments related to share in joint stock company, even if part
of it related to immoveable property
(iii)
Any debenture issued by the such company while not creating, declaring,
assigning, limiting , extinguishing any rights in immoveable properties except
by way of security;
(iv)
Any endorsement upon or transfer of any debenture issued by any
such company;
(v)
Any document other than specified in Section 17 (A) not in itself
creating any right, title or interest in immoveable properties , but merely creating
a right to obtain another document;
(vi)
Any decree or order of court except relating to rights in immoveable
properties including by way of compromise etc.
(vii)
Any grant of immoveable property by the Government;
(viii) Any instrument
of partition made by a Revenue Officer’
(ix)
Any order granting a loan or instrument of collateral security
granted under the Land Improvement Act 1871 or the Land Improvement Loans Act
1883;
(x)
Any order granting loan under the Agriculturist, Loans Act,1884;
(xi)
Any order made under the charitable Endowments Act,1890;
(xii)
Any endorsement on a mortgage deed acknowledging the payment of
whole or any p[art of mortgage money, when it does not purport to extinguish
mortgage;
(xiii) Any certificate
of sale granted to the purchaser of property sold in public auction by Civil or
Revenue Officer.
The Section 17 (1) (A) came into
force with effect from 24th September 2001.
(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 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.
The Supreme Court in Ameer Minhaj (Supra) has held
that on a plain reading of this provision, it is amply clear that
the document containing contract to transfer the right, title or interest in an immoveable property for consideration is required
to be registered, if the party wants to rely on the same for the
purposes of Section 53A of the 1882 Act to protect its possession over the
stated property. If it is not a registered
document, the only consequence provided in this provision is
to declare that such document shall have no effect for the
purposes of the said Section 53A of the 1882
Act. The issue is no more res integra. In S. Kaladevi Vs V.R Somasundaram
& Ors -SLP (C) 1451/2009, the
Supreme Court has reiterated the legal
position that 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 as evidence
making an endorsement that it is received only as evidence of
an oral agreement of sale under the proviso to Section 49 of
the 1908 Act.
Section 18 of the Registration
Act,1908 lists the instruments where registration is optional. These
instruments are as under:
(a)
Instruments (other than
gift or Will) purporting to create rights vested or contingent relating to immovable
properties if the value if less than Rs 100;
(b)
Instruments acknowledging receipt or payment
of any consideration on account of creating. Limiting, extinguishing of such
right, title and interest;
(c)
Lease of immoveable properties
not exceeding one year;
(d)
Instruments transferring or
assigning any decree or order of a court of value less than 100 Rs;
(e)
Instruments purports to or
operate to create, declare, assign, limit or extinguish any rights etc in
moveable properties;
(f)
Wills;
(g)
All other documents not
required to be registered u/s 17 of the Registration Act 1908.
Section 49 of the 1908 Act reads thus:
“49. Effect of non-registration of documents required to
be registered. No document required by section 17 [or by
any provision of the Transfer of
Property Act, 1882 (4 of
1882)], to be registered shall
(a) affect any immovable property
comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction
affecting such property or conferring such power,
unless it has been registered:
Provided that an
unregistered document affecting
immovable property and required by this Act or the Transfer
of Property Act, 1882 (4 of 1882), 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.”
The Supreme Court has added
one more principle thereto that a document is required to be registered,
but if unregistered, can still be admitted as evidence of a contract in a
suit for specific performance. In view of this exposition, if the conclusion recorded by
a court that the sale agreement is inadmissible in evidence, will have to be
understood to mean that the document though exhibited, will
bear an endorsement that it is admissible only as evidence
of the agreement to sell under the proviso to Section
49 of the 1908 Act and shall not have any effect for the
purposes of Section 53A of the 1882 Act. In that,
it is received as evidence of a contract in a suit for
specific performance and nothing more. The genuineness, validity and binding
nature of the document or the fact that it is hit by the provisions of the 1882
Act or the 1899 Act, as the case may be, will have to be
adjudicated at the appropriate stage as noted by the Trial
Court after the parties adduce oral and documentary evidence.
If a registered General Power of Attorney,
has been executed by the title holder, being a registered
document, there shall be a legal, rebuttable presumption that the same has been
duly stamped. If it is hit by the provisions of the 1882 Act or the 1899
Act can be decided after the parties adduce oral and documentary evidence. The
principal document, namely, the agreement to sell was
executed prior to coming into force of Section 17 (1A) of the 1908
Act, it may be noted that provision has been made applicable
prospectively. Hence, the same was not required to be
compulsorily registered at the time of its execution. Even if it
was required to be registered, keeping in view the
purport of Section 49 read with Section 17(1A) of the 1908 Act, the same
could be received as evidence for a limited purpose, without
having any effect for the purposes of Section 53A of 1882 Act.
The Supreme Court in KB Saha & Sons Pvt Ltd Vs Department
Consultant Pvt Ltd (2008) 8 SCC 564 has culled out the following
principles:-
"1. A document
required to be registered, if unregistered is not admissible into evidence
under Section 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."
It is further observed that 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.
From
the above discussion and after having recourse to the law laid down by Supreme
Court including the recent judgment in Shakeel Ahmed (Supra), Supreme Court
has categorically held that no unregistered instruments relating to immoveable properties
shall be valid, unless it is exempted under the Registration act 1908.The
Supreme Court has also sought to allay any misconception as regards Suraj Lamp (Supra) and the fact that it
was prospective in nature. It is clearly held that no right, title and interest
in immoveable properties vide unregistered instruments and also under Power of
Attorney, agreement to sell could be held to be valid. The Supreme Court after
taking note of Section 17 and 49 of The Registration act 1908 has further observed
that even if these documents i.e. the Agreement to Sell and the Power of
Attorney were registered, still it could not be said that the respondent would
have acquired title over the property in question. At best, on the basis of the
registered agreement to sell, a purchaser could claim relief of specific
performance in appropriate proceedings.
------
Anil K Khaware
Founder & Senior Associate
Societylawandjustice.com
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