Babul Roy Vs Raj Kumar Sharma and Anr.

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IN THE HIGH COURT AT CALCUTTA CIRCUIT BENCH AT PORT BLAIR CIVIL APPELLATE JURISDICTION APPELLATE SIDE

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PRESENT: THE HON’BLE JUSTICE BIVAS PATTANAYAK

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SA 10 of 2024 CAN 1 of 2023, CAN 2 of 2023 Babul Roy versus

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Raj Kumar Sharma and Another

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For the Appellant : Mrs. Anjili Nag, Senior Advocate Ms. K. Bhawani, Advocate For the Respondent No.1 : Mr. Arul Prasanth, Advocate Heard on : 12.06.2025, 13.06.2025, 16.06.2025 Judgment on : 14.11.2025

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Bivas Pattanayak, J. :-

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1. This appeal is directed against the judgment and decree dated 19^th April, 2023 passed by learned Additional District Judge, North & Middle Andaman, Mayabunder in Other Appeal no.3 of 2022 thereby setting aside the judgment and decree dated 30^th September 2022 passed by learned Civil Judge (Senior Division), North & Middle Andaman, Mayabunder in Other Suit no.10 of 2015.

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2. The appellant-plaintiff filed a suit for specific performance of contract namely an agreement for sale dated 4^th December, 2012, in respect of a House site bearing survey No. 124/2(P) admeasuring an area of 0.1260 hector together with a house thereon, situated in Bakultala village under Rangat Tehsil, North & Middle Andaman, A & N Islands (hereinafter referred to as the ‘suit property’) and also a declaration to the effect that the

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sale deed dated 10^th February 2015 executed and registered in respect of the suit property is void.

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3. In the plaint, the appellant plaintiff pleaded that sometime in the month of November, 2012, defendant no.1 approached the plaintiff to sell the suit property at total consideration of Rs.20,00,000/-. The appellant plaintiff agreed to purchase the same. Since defendant no.1 had to repay the borrowed amount of Rs.1,00,000/- to defendant no.2, he requested the appellant-plaintiff to make early payment of earnest amount of Rs.10,00,000/-and accordingly the appellant plaintiff entered into an agreement for sale with defendant no.1 upon making payment of the earnest amount of Rs.10,00,000/-. On execution of the agreement for sale, the appellant-plaintiff was put in possession of one shop room in the suit property. As per the agreement for sale, it was agreed that defendant no.1 was to execute and register the deed of sale in favour of the plaintiff within the period of 90 days from the date of the agreement for sale and the balance of the said consideration amount would be paid at the time of registration of the deed of sale. However, defendant no.1 failed to execute the deed of sale and demanded a further sum of Rs. 6,00,000/- of the consideration amount, which was duly paid by the appellant-plaintiff and defendant no.1 acknowledged the same by issuing money receipt. The appellant-plaintiff time and again requested defendant no.1 to execute and register the deed of sale in respect of the suit property, however, defendant no.1 on the ground of pendency of a suit filed by defendant no.2 took some

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extra time to execute the deed of sale. Subsequently, it came to the knowledge of the appellant-plaintiff that defendant no.1 transferred the

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entire suit property in favour of defendant no.2 upon execution and registration of a deed of sale behind the back of the plaintiff on 10^th February 2015. In such backdrop, the appellant plaintiff filed a suit for specific performance of contract as well as for a declaration that the deed of sale executed in favour of defendant no.2 by defendant no.1 is null and void.

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4. The defendants filed joint written statement denying, inter alia, the allegations made in the plaint and precisely contended that defendant no.2 had been tenant under one Rajan Nair in respect of one room in the suit property for 15 years. Defendant no.1 purchased the suit property from the said Rajan Nair however the tenancy of defendant no.2 in the suit property remained unchanged. In January, 2012, defendant no.2 entered into an agreement with defendant no.1 for purchase of his tenanted portion of 100 square metres of land in the suit property and paid a sum of Rs. 1,10,000/-. Since defendant no.1 did not transfer the said land despite receipt of the aforesaid sum, defendant no.2 filed a suit for specific performance of contract against defendant no.1 being O.S no. 2 of 2013 at Mayabunder. On 15^th July, 2012 an agreement for sale was executed between defendant no.1 and defendant no.2 for sale of the entire suit property at a total consideration of Rs. 18,00,000/- and an amount of Rs. 2,00,000/- was paid by defendant no.2 to defendant no.1. Pursuant to such agreement for sale, on 10^th February 2015 defendant no.1 executed and registered a deed of sale in favour of defendant no.2 in respect of the suit property. Defendant no.1 had never transferred the suit property in favour of appellant-plaintiff and no agreement for sale was executed by

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defendant no.1 in favour of the plaintiff. Rather the signature of defendant no.1 was taken on the alleged agreement for sale by putting him under influence of alcohol. In light of the aforesaid facts, the defendants prayed for dismissal of the suit.

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5. On the basis of the pleadings of the parties, the learned trial court framed following issues.

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(i) Is the suit maintainable in law and as per prayer?

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(ii) Is the plaintiff in possession of the suit land?

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(iii) Whether the defendant no.1 agreed to sale the suit land in favour of the plaintiff on 4 December 2012?

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(iv) Whether there was agreement of sale in respect of the suit property between the defendant no.1 and the defendant no.2 on 15^th July 2012?

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(v) Whether the signature of defendant no.1 in the sale agreement dated 4^th December 2012 was obtained by the plaintiff when the defendant no.1 was under the influence of alcohol?

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(vi) Whether the plaintiff paid Rs.16,00,000/- to the defendant no.1 in two installments on 4^th December 2012 and 3^rd February 2014?

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(vii) Is the plaintiff entitled to get a decree as prayed for?

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(viii) To what other relief or reliefs is the plaintiff entitled under law and equity?

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6. Upon considering the evidence and the materials on record, the learned trial court decided Issue nos.1, 2, 3, 6, 7 and 8 in affirmative and

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in favour of the plaintiff and Issue nos. 4 and 5 were negated and eventually decided in favour of the plaintiff and passed the following order.

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“That the suit be and the same do hereby decreed on contest against the defendants. It is declared that the sale deed dated 10.2.2015 executed by the defendant no.1 in favour of the defendant no.2 is null and void. The defendant no.1 is hereby directed to specifically perform the sale agreement dated 4.12.2012 by executing and registering an appropriate sale deed in favour of the plaintiff in respect of the suit property within a

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period of three months from the date of passing of this order, failing which the plaintiff shall be at liberty to execute the same as per law. There shall also be a decree of permanent injunction against the defendants in respect of the suit property. The defendants are hereby permanently restrained from disturbing the peaceful possession of the plaintiff in the suit property. “

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7. Being aggrieved by and dissatisfied with the aforesaid judgment and

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decree of the learned trial court, the defendant no.2 preferred an appeal being Other Appeal no.3 of 2022 before the Additional District Judge, at Mayabunder, North and Middle Andaman District.

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8. The learned First Appellate court framed following points of consideration in the appeal.

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(i) Is the admissibility of Ext 1, being the Agreement for Sale dated 04.12.2012 legally sustainable with the resultant effect as to whether the same could be relied upon for decreeing specific performance?

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(ii) Whether the concept of efflux of time being the essence of contract is applicable in the instant case?

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(iii) Whether the payment of money even after the expiry of the period as envisaged in the agreement for sale inures to the benefit of the plaintiff/respondent for the purpose of getting a decree for specific performance?

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(iv) Whether the relief granted by the Ld Trial Judge in favour of the plaintiff/respondent even after the transfer of title in respect of the said suit property is legally sustainable in the of law?

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9. The First Appellate Court by order and judgment dated 19^th April 2023 allowed the appeal and set aside the decree passed by the learned trial court.

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10. Being aggrieved by and dissatisfied with the aforesaid order and judgment of the First Appellate Court, the plaintiff- appellant preferred the instant second appeal.

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11. In the present second appeal following substantial questions of law is framed.

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(i) Whether the learned First Appellate Court erred in law in declaring that the agreement dated 4^th December 2012 expired by efflux of time, notwithstanding admitted acceptance of balance consideration of money?

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(ii) Whether having regard to the proviso to section 49 of the Registration Act, 1908 compulsorily registrable document, which is not registered, can be acted upon and enforced in a suit for specific performance?

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(iii) Whether an unregistered sale agreement can be specifically enforced under the provisions of Specific Relief Act, 1963?

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12. The substantial questions of law as framed are answered as follows in the light of the materials on record and the argument advanced on behalf of the respective parties.

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Substantial Question of Law no. (i) Whether the learned First Appellate Court erred in law in declaring that the agreement dated 4^th December 2012 expired by efflux of time, notwithstanding admitted acceptance of balance consideration of money?

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13. The First Appellate Court upon considering that the appellantplaintiff has made a further payment of Rs. 6,00,000/- on 3^rd February 2014, taking the total amount to defendant no.1 to Rs. 16,00,000/-, observed that such further payment made does not and cannot inure to the benefit of the appellant- plaintiff. The payment was made at a time when the subsistence of the agreement dated 4^th December, 2012 has already expired on 3 March 2013. It further observed that there is nothing

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on record to show that such period was duly extended. Moreover, the agreement for sale being inadmissible one, further payment if any made cannot inure any right in favour of the plaintiff. When the period of contract expires by efflux of time, the cause of action arises therefrom. Though the plaintiff was aware from the date of expiry of such agreement for sale that the defendant no.1 has not performed his part of the agreement, save and except making such additional payment no steps have been taken by the plaintiff to get the deed of sale registered.

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13.1. Ms Anjili Nag, learned Senior Advocate for the appellant-plaintiff submitted that as per the agreement for sale dated 4^th December 2012 the purchase was agreed to be completed within 90 days from the date of execution of the said agreement provided a good marketable title is made out by vendor namely defendant no.1. On the date of the said agreement for sale, the appellant-plaintiff paid a sum of Rs.10,00,000/- and subsequent thereto have also paid a sum of Rs.6,00,000/- as demanded by defendant no.1. Therefore, the appellant-plaintiff was all along willing to perform his part of the contract. Since the respondent-defendant no.1 did not execute and register the deed of conveyance in favour of the appellantplaintiff within the stipulated period hence the cause of action arose upon expiry of such stipulated period and would be deemed as a refusal. The agreement for sale cannot be said to have expired with the efflux of time for the simple reason that time cannot be an essence of contract in the case of agreement for sale of immovable property. The appellant-plaintiff has filed the suit within the period of limitation as provided under Article 54 of the Limitation Act for a suit for specific performance of contract i.e.

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within three years from the date fixed for performance and in support of her contention she relied on the following decisions of Hon’ble Supreme Court (i) Rathnavathi and another versus Kavita Ganashamadas¹ ; (ii) Lakshamamma & Ors versus Jayamma & Anr² .

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13.2. On the contrary, in reply to the aforesaid contention of the appellant-plaintiff, Mr Arul Prasanth, learned advocate appearing for the respondents-defendants submitted that as per the agreement for sale dated 4^th December 2012 the purchase was to be completed within 90 days from the date of such agreement. The defendant no.1 did not serve any notice of refusal to execute the deed of conveyance in terms of the agreement for sale. The cause of action would arise only on refusal to execute the deed of conveyance. Further there is also no such pleading in the plaint that defendant no.1 refused to execute the deed of conveyance. That apart, there is also no pleadings to the effect of any oral refusal by defendant no.1. As per Article 54 of the Limitation Act, the cause of action would arise from the date of refusal. Therefore, in the absence of clear case of date of refusal on the part of defendant no.1 to execute deed of conveyance in favour of the appellant-plaintiff, no cause of action arose to make the suit maintainable.

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13.3. The question whether time is the essence of contract in case of immovable property, position of law is well settled by the decision of the Constitution Bench of Hon’ble Supreme Court in Smt. Chand Rani (dead)

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1 (2015) 5 SCC 223

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2 Civil Appeal No. 1402 of 2024

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by LRs. versus Smt. Kamal Rani (dead) by LRs³ , the relevant portions of

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which are extracted below:

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“19. It is a well-accepted principle that in the case of sale of immovable property, time is never regarded as the essence of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in any way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the case of specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement. It has to be ascertained whether under the terms of the contract the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language.

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20. “…… Section 55 of the Contract Act which deals with the consequences of failure to perform an executory contract at or before the stipulated time provides by the first paragraph: ‘When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee if the intention of the parties was that time should be of the essence of the contract.’

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It is not merely because of specification of time at or before which the thing to be done under the contract is promised to be done and default in compliance therewith, that the other party may avoid the contract. Such an option arises only if it is intended by the parties that time is of the essence of the contract. Intention to make time of the essence, if expressed in writing, must be in language which is unmistakable: it may also be inferred from the nature of the property agreed to be sold, conduct of the parties and the surrounding circumstances at or before the contract. Specific performance of a contract will ordinarily be granted, notwithstanding default in carrying out the contract within the specified period, if having regard to the express stipulations of the parties, nature of the property and the surrounding circumstances, it is not inequitable to grant the relief. If the contract relates to sale of immovable property, it would normally be presumed that time was not of the essence of the contract. Mere incorporation in the written agreement of a clause imposing penalty in case of default does not by itself evidence an intention to make time of the essence. In Jamshed Khodaram Irani v. Burjorji Dhunjibhai the Judicial Committee of the Privy Council observed that the principle underlying Section 55 of the Contract Act did not differ from those which obtained under the law of England as regards contracts for sale of land.”

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Therefore, it clearly manifests from the aforesaid proposition of the Hon’ble

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Supreme Court that in a case of sale of immovable property, time is not the essence of the contract. It is not merely because of specification of time at or before which the thing to be done under the contract is promised to

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3 (1993) 1 SCC 519

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be done and default in compliance therewith, that the other party may avoid the contract. Whether time is the essence of contract may also be inferred from the nature of the property agreed to be sold, conduct of the parties and the surrounding circumstances at or before the contract. Specific performance of a contract will ordinarily be granted, notwithstanding default in carrying out the contract within the specified period, if having regard to the express stipulations of the parties, nature of the property and the surrounding circumstances, it is not inequitable to grant the relief. If the contract relates to sale of immovable property, it would normally be presumed that time was not of the essence of the contract.

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13.4. In order to find an answer to the aforesaid question whether time is the essence of contract in the present case and the agreement for sale has expired with the efflux of time, let me revert back to the materials on record. It would be very much relevant to extract Clause 2 of the Agreement for Sale dated 4^th December, 2012 (Exhibit 1) which reads thus:

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“2. The purchaser has this day paid to the vendors the sum of Rs.10,00,000/- and by way of earnest payment simultaneously with the execution of this agreement, vendor shall deliver to the purchaser’s solicitor/advocate on his accountable receipt all title deeds and other papers and writings including the sanctioned plan and revenue receipt relating to the land and the purchase shall be completed within 90 days from the date of hereof provided a good marketable title is made out and the vendor make the landed property free from all encumbrances, claims and demands whatsoever and not subject to any sham question or requisition time shall for this purpose be deemed to be the essence of contract”

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Though in the aforesaid clause of the said agreement for sale it is stated that the purchase has to be completed within 90 days from the date of such agreement and such time has been made to be the essence of

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contract, however, such time depends on the contingencies and conditions that the vendor shall make a good marketable title and the landed property shall be free from all encumbrances, claims and demands whatsoever and not subject to any sham question requisition. Needless to mention that the materials on record do not suggest that defendant no.1, being the vendor, has informed the appellant-plaintiff of such aspect within such period. Moreover, money receipt dated 3^rd February, 2014 (Exhibit 3) shows that defendant no.1-vendor received a further sum of Rs.6,00,000/- from the appellant-plaintiff as a part payment of total consideration amount of Rs.20,00,000/-. Thus, from the nature of the property agreed to be sold which is an immovable property and the conduct of the parties, it could be inferred that the parties did not intend to make time the essence of contract.

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13.5. The First Appellate Court has observed that the appellant-plaintiff has contended that the cause of action arose on 4^th December 2012 which is erroneous since on such date the agreement for sale was signed and no assertion of any breach thereof has been made in the subsequent paragraphs. Needless to mention that the pleadings in the plaint relates to allegations of non-execution and registration of deed of sale in respect of the subject property in favour of the appellant plaintiff by defendant no.1. From the pleadings in the plaint and the evidence on record it is undisputed fact that there is breach in the agreement which led to filing of the suit. Therefore, even if in the subsequent paragraphs of the plaint the breach has not been pleaded, still it would not affect the suit for specific performance of contract filed by the appellant-plaintiff.

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13.6. The First Appellate Court has also observed that the agreement for

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sale has expired on 3^rd March, 2013 (midnight) and despite making payment of substantial amount by the appellant-plaintiff, it is inconceivable that the appellant plaintiff did not make any attempt to get the suit property registered in his name and thus rendering the claim of the appellant plaintiff of his part of the performance partially nugatory. Such finding of the First Appellate Court is not sustainable for the following reasons. Article 54 of the Limitation Act prescribes the period of limitation for filing a suit for specific performance of contract which reads hereunder:

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54	For specific performance of contract	Three years	The date performanc	fixed for the e or, if no
			such dat when the notice that is refused.	e is fixed, plaintiff has performance

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Upon bare reading of the aforesaid provision, it would be manifestly clear

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that if the date is fixed for performance of agreement, then non-compliance of the agreement on the date would give rise to a cause of action to file suit for specific performance within three years from the date so fixed. However, when such date is not fixed, limitation of three years to file a suit for specific performance would begin when the plaintiff has noticed that the defendant has refused the performance of the agreement. Admittedly, no case of refusal to execute the deed of sale has been made out by the appellant-plaintiff or that defendant no.1-vendor informed of such refusal. Be that as it may, the facts pleaded and the evidence on record on the face of it shows that a case of non-compliance of agreement for sale has been

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made out. The agreement for sale was executed on 4^th December, 2012. As

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per the said agreement the purchase was to be completed within 90 days from the date of the said agreement. The cause of action in the present case arose after such purchase was not completed within 90 days from the date of agreement. The instant suit was filed on 4^th March, 2015, which is well within the period of limitation as stipulated in the Limitation Act. As the appellant plaintiff has approached the court within the prescribed period of limitation, his claim cannot be made nugatory on the premise that despite making substantial payment, he did not make any attempt to get the suit property registered. In this regard this court finds substance in the submission of Ms Nag, learned senior advocate appearing on behalf of the appellant plaintiff relying on Rathnavathi (supra) and Lakshamamma (supra).

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In light of the aforesaid discussion, it is found on subsequent payment being made, the agreement for sale deed did not expire with the efflux of time.

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Substantial Question of Law (ii)Whether having regard to the proviso to section 49 of the Registration Act, 1908 compulsorily registrable document, which is not registered, can be acted upon and enforced in a suit for specific performance?

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14. The learned First Appellate Court has observed that the agreement for

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sale dated 4^th December, 2012 squarely comes within the meaning and scope of section 53A of the Transfer of Property Act, 1882 and the proviso to section 49 of the registration Act, 1908 does not inure to the benefit of the appellant-plaintiff. The agreement for sale is compulsorily registrable instrument and the impact of such non-registration of the document is

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that it cannot be admitted in evidence and therefore such agreement for sale is inadmissible.

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14.1. Ms. Nag, learned senior advocate appearing for the appellantplaintiff submitted that provisions of section 53A of the Transfer of Property Act, 1882 does not attract in the instant case as the present suit is for specific performance of contract and not a suit for possession and its protection. Proviso to Section 49 of the Registration Act provides that an unregistered document affecting immovable property and required by the Act or Transfer of Property Act, to be registered may be received in evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act or is evidence of any collateral transaction not required to be affected by registered instrument. By virtue of such proviso, the unregistered agreement for sale against which specific performance of contract has been sought for by the appellant plaintiff can be received as evidence of contract and thus is admissible. The non-registration of the document namely the agreement for sale would not affect admissibility of the same in a suit for specific performance of contract. Therefore, the finding of the First Appellate Court holding that the agreement for sale to be inadmissible is erroneous. To buttress her contention, she relied on the following decisions.

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(i) Ameer Minhaj versus Dierdre Elizabeth (Wright) Issar And Ors⁴ ;

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(ii) R.Hemlatha versus Kashthuri⁵ ;

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4 (2018) 7 SCC 639

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5 2023 LIveLaw (SC) 304

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(iii) Sri Swarnendu Das Gupta versus Smt Sdhana Banerjee⁶

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(iv) Jagdish versus Smt Deep Shika Garg⁷ ;

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(v) A. Rama Rao and others versus Raghunath Patnaik and others⁸

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(vi) G. Veeramani versus N. Sundaramoorthy and Ors.⁹

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14.2. On the contrary, Mr Prasanth, learned advocate appearing for the respondents relying on the decision of the Hon’ble Supreme Court in Suraj

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Lamp & Industries Pvt Ltd. versus State of Haryana & Anr¹⁰ submitted that any contract of sale (agreement of sell) which is not a registered deed of conveyance (deed of sale) would fall short of requirement of sections 54 and 55 of Transfer of Property Act and will not confer any title nor transfer in interest in an immovable property, except to the limited right granted under Section 53A of the Transfer of Property Act. As per the Transfer of Property Act, an agreement for sale, whether with possession or without possession, is not a conveyance. Section 54 of the Transfer of Property Act enacts that sale of immovable property can be made only by a registered instrument and an agreement for sale does not create any interest or charge on its subject matter. Furthermore, the registration Act,

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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 the court of law on its basis. At best a party can claim the relief of specific performance in an appropriate proceeding

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6 SAT 006 of 2014

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7 AIR 2013 (Rajasthan) 89

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8 AIR 2002 Orissa 77

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9 2019 (5) LW 471

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10 (2012) 1 SCC 656

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on the basis of registered agreement to sell. Law is well-settled that no right, title or interest in immovable property can be conferred without a registered document. To buttress his contention, he relies on the decision of Hon’ble Supreme Court passed in Shakeel Ahmed versus Syed Akhlaq Hussain¹¹ .

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Moreover, as per Section 17 of the Registration Act, an agreement for sale is mandatorily registrable. Further, as per Section 49 of the Registration Act, an unregistered document/agreement for sale shall not be admissible evidence. In support of his contention, he relies on the decisions of Hon’ble Supreme Court passed in Balram Singh versus Kelo Devi¹² and M/s Shiv Shambhu Pictures Pvt Limited versus Lokeshwar Prasad & Others¹³ .

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14.3. In order to find an answer to the aforesaid question, it would be apposite to reproduce the relevant provisions embodied under section 17 and section 49 of the Registration Act as hereunder for the sake of convenience of discussion:

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“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 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–

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(a) instruments of gift of immovable property;

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(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property;

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(c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and

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11 Civil Appeal no. 1598 of 2023

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12 Civil Appeal No. 6733 of 2022

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13 2016 (3) All. LJ 396

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(d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;

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(e) [non-testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property:] [Inserted by Act 21 of 1929, Section 10.]

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Provided that the [State Government] [Substituted by A.O.1950, for "Provincial Government" .] may, by order published in the [Official Gazette] [Substituted by A.O.1937, for "Local Official Gazette" .], exempt from the operation of this sub-section any leases 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.

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[(1-A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of section 53-A of the Transfer of Property Act, 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 53-A.] [Inserted by Act 48 of 2001, Section 3 (w.e.f. 24.9.2001).]

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(2)Nothing in clauses (b) and (c) of sub-section (1) applies to

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(i) any composition deed; or

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(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

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(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 insofar as it entitles the holder to the security afforded by a registered instrument whereby the company has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or

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(iv) any endorsement upon or transfer of any debenture issued by any such company; or

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(v) [any document other than the documents specified in sub-section (1-A)] [Substituted by Act 48 of 2001, Section 3, for "any document" (w.e.f. 24.9.2001).] not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immovable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest; or

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(vi) any decree or order of a Court [except a decree or order expressed to be made on a compromise and comprising immovable property other than that which is the subject-matter of the suit or proceeding] [Substituted by A.O.1937, for "and any award" .]; or

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(vii) any grant of immovable property by the [Government] [Substituted by A.O.1950, for "Crown" .]; or

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(viii) any instrument of partition made by a Revenue Officer; or

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(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; or

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(x) any order granting a loan under the Agriculturists Loans Act, 1884, or instrument for securing the repayment of a loan made under that Act; or

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[(x-a) any order made under the Charitable Endowments Act, 1890, vesting any property in a Treasurer of Charitable Endowments or divesting any such Treasurer of any property; or] [Inserted by Act 39 of 1948, Section 2 (w.e.f. 3.9.1948).]

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(xi) any endorsement on a mortgage-deed acknowledging the payment of the whole or any part of the mortgage-money, and any other receipt for payment of money due under a mortgage when the receipt does not purport to extinguish the mortgage; or

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(xii) any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or Revenue Officer.

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[Explanation [Inserted by Act 2 of 1927, Section 2.].a document purporting or operating to effect a contract for the sale of immovable property shall not be deemed to require or ever to have required registration by reason only of the fact that such document contains a recital of the payment of any earnest money or of the whole or any part of the purchase money.]

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(3)Authorities to adopt a son, executed after the first day of January, 1872, and not conferred by a will, shall also be registered.”

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“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),] [Added by Act 21 of 1929, Section 10.] to be registered shall—

¶142

(a) affect any immovable property comprised therein, or

¶143

(b) confer any power to adopt, or

¶144

(c) be received as evidence of any transaction affecting such property or conferring such power,

¶145

unless it has been registered:

¶146

[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] [Added by Act 21 of 1929, Section 10.], [* * *] [The words "or as evidence of part performance of a contract for the purposes of section 53-A of the Transfer of Property Act, 1882 (4 of 1882)" omitted by Act 48 of 2001, Section 6 (w.e.f. 24.9.2001).] or as evidence of any collateral transaction not required to be effected by registered instrument.]”

¶147

14.4. Bearing in mind the aforesaid provision of law, let me now consider

¶148

the proposition laid down by the Hon’ble Supreme with regard to the question at hand in its decisions as hereunder.

¶149

14.5. In S.Kaladevi versus V.R Somasundaram & Ors¹⁴ the Hon’ble

¶150

Apex Court held as follows:

¶151

“10. Section 17 of the 1908 Act is a disabling section. The documents defined in clauses (a) to (e) therein require registration compulsorily. Accordingly, sale of immovable property of the value of Rs 100 and more

¶152

14 (2010) 5 SCC 401

¶153

19

¶154

requires compulsory registration. Part X of the 1908 Act deals with the effects of registration and non-registration.

¶155

11. Section 49 gives teeth to Section 17 by providing effect of nonregistration of documents required to be registered. Section 49 reads thus:

¶156

“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—

¶157

(a) affect any immovable property comprised therein, or

¶158

(b) confer any power to adopt, or

¶159

(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 (1 of 1877), or as evidence of any collateral transaction not required to be effected by registered instrument.”

¶160

12. 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. The proviso, however, would show that an unregistered document affecting immovable property and required by the 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 the proviso, therefore, an unregistered sale deed of an immovable property of the value of Rs 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 the 1908 Act.

¶161

13. Recently, in K.B. Saha and Sons (P) Ltd. v. Development Consultant Ltd. [(2008) 8 SCC 564] this Court noticed (SCC pp. 576-77, para 33) the following statement of Mulla in his Indian Registration Act (7th Edn., at p. 189):

¶162

“The High Courts of Calcutta, Bombay, Allahabad, Madras, Patna, Lahore, Assam, Nagpur, Pepsu, Rajasthan, Orissa, Rangoon and Jammu & Kashmir; the former Chief Court of Oudh; the Judicial Commissioner's Court of Peshawar, Ajmer and Himachal Pradesh and the Supreme Court have held that a document which requires registration under Section 17 and which is not admissible for want of registration to prove a gift or mortgage or sale or lease is nevertheless admissible to prove the character of the possession of the person who holds under it.”

¶163

This Court then culled out the following principles: (K.B. Saha case [(2008) 8 SCC 564] , SCC p. 577, para 34)

¶164

“1. A document required to be registered, if unregistered is not admissible into evidence under Section 49 of the Registration Act.

¶165

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.

¶166

3. A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration.

¶167

20

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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.

¶169

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.”

¶170

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. 17. The argument of the learned counsel for the respondents with regard to Section 3(b) of the 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 the 1963 Act shall be deemed to affect the operation of the 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 the 1908 Act is affected; rather the court acts in consonance with the proviso appended to Section 49 of the 1908 Act.”

¶171

14.6. In R. Hemlatha (supra) the Hon’ble Supreme Court held as follows:

¶172

“ 12.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.

¶173

27. Under the circumstances, 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. Therefore, in the facts and circumstances of the case, 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.”

¶174

14.7. In Ameer Minhaj (supra), the Hon’ble Supreme Court observed as

¶175

follows:

¶176

“9. In other words, the core issue to be answered in the present appeal is whether the suit agreement dated 9-7-2003, on the basis of which relief

¶177

21

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of specific performance has been claimed, could be received as evidence as it is not a registered document. Section 17(1-A) of the 1908 Act came into force with effect from 24-9-2001. Whereas, the suit agreement was executed subsequently on 9-7-2003. Section 17(1-A) of the 1908 Act reads thus:

¶179

“ 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 16 of 1864, or the Indian Registration Act, 1866 (20 of 1866), or the Indian Registration Act, 1871 (8 of 1871) or the Indian Registration Act, 1877 (3 of 1877), or this Act came or comes into force, namely—

¶180

***

¶181

(1-A) The documents containing contracts to transfer for consideration, any immovable 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 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 53-A.”

¶182

10. 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 immovable property for consideration is required to be registered, if the party wants to rely on the same for the purposes of Section 53-A 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 53-A of the 1882 Act. The issue, in our opinion, is no more res integra. In S. Kaladevi v. V.R. Somasundaram [S. Kaladevi v. V.R. Somasundaram, (2010) 5 SCC 401 : (2010) 2 SCC (Civ) 424] this Court has restated 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.

¶183

11. Section 49 of the 1908 Act reads thus:

¶184

“ 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—

¶185

(a) affect any immovable property comprised therein, or

¶186

(b) confer any power to adopt, or

¶187

(c) be received as evidence of any transaction affecting such property or conferring such power,

¶188

unless it has been registered:

¶189

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 (1 of 1877), or as evidence of any collateral transaction not required to be effected by registered instrument.”

¶190

12. In the reported decision, this Court has adverted to the principles delineated in K.B. Saha & Sons (P) Ltd. v. Development Consultant Ltd. [K.B. Saha & Sons (P) Ltd. v. Development Consultant Ltd., (2008) 8 SCC 564] and 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

¶191

22

¶192

exposition, the conclusion recorded by the High Court in the impugned judgment [Dierdre Elizabeth (Wright) Issar v. Ameer Minhaj, 2016 SCC OnLine Mad 31541] that the sale agreement dated 9-7-2003 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.”

¶193

14.8. On consideration of the aforesaid judgments, it is no more res integra that an unregistered agreement for sale is admissible in evidence in a civil suit for specific performance of contract on account of proviso to section 49 of the Registration Act, 1908.

¶194

14.9. The learned First Appellate Court has observed that the agreement for sale dated 4^th December 2012 squarely comes within the meaning and scope of section 53A of the Transfer of Property Act and held that the said agreement for sale is compulsorily registrable instrument. Be that as it may, it is pertinent to note, before anything else, that the learned First Appellate Court has failed to appreciate that the suit filed by the appellantplaintiff is for specific performance of contract and not a suit to protect the possession of the plaintiff in the suit premises. Section 17 (1A) provides that the documents containing contract 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, it shall have no effect for

¶195

the purposes of the said section 53A. Upon bare reading of the aforesaid

¶196

23

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provision, it manifest that the document containing contract to transfer the right, title or interest in an immovable 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 Act of 1882 to protect its possession over the property in question. If such document is not registered, the only consequence which comes out from the said provision is to declare that such documents shall have no effect for the purposes of section 53A of the Act of 1882. The instant suit filed by the appellant-plaintiff not being a suit for protection of his position in the suit property, the learned First Appellate Court erred in applying the provisions of section 53A of the Act of 1882 and making it a basis to deny the relief to the appellant-plaintiff.

¶198

14.10. In Suraj Lamp & Industries Pvt Ltd. (supra) and Shakeel Ahmed (supra) the proposition that no right, title or interest in immovable property can be conferred without a registered document is settled proposition of law. However, the question at hand is with regard to admissibility of a document which by itself is not creating a right but merely creating a right to obtain another document which will, when executed, create such right.

¶199

14.11. In Balram Singh (supra) the earlier decisions of the Hon’ble Supreme Court on the issue whether an unregistered agreement for sale is admissible in evidence has not been considered.

¶200

14.12. In M/s Shiv Shambhu Pictures Pvt Limited (supra) the Hon’ble Allahabad High court considering the fact that in the State of Uttar Pradesh even a contract for sale is required to be registered, unless it is registered, it cannot be held to be a contract in law, enforceable and such unregistered document as such would not be admissible for the purpose of

¶201

24

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relying its own stipulations. Further in view of the above it held that the general principles of section 49 proviso would apply that an unregistered document would not be admissible in evidence except for ‘collateral purposes. Thus, it appears that such a finding has been arrived at by the court since in the State of Uttar Pradesh, even a contract for sale has to be compulsorily registered. Therefore, such finding cannot be applied generally to all States and Union Territories.

¶203

Substantial Question of Law No.(iii) Whether an unregistered sale agreement can be specifically enforced under the provisions of Specific Relief Act, 1963?

¶204

15. The agreement for sale dated 4 December 2012 has been exhibited without any objection. The genuineness and the execution of the said agreement for sale is never questioned. Such a document is challenged only on the ground of it being unregistered. Section 17 of the Registration Act enumerates the category of documents which requires registration. Section 17(1) (b) of the act provides for registration of non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future any right, title or interest, whether vested or contingent of the value of one hundred rupees and upwards, to or in immovable property. Section 17 (2) (v) of Act stipulates that nothing in clauses (b) and (c) of sub-section (1) of section 17 applies to any document not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immovable property but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such a right, title or interest. An agreement

¶205

25

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for sale of immovable property is a non-testamentary instrument which does not create, declare, assign, limit or extinguish any right, title or interest, whether vested or contingent in immovable property. Section 17 (2) (v) of the Act makes the position clear that a document not itself creating a right in immovable property of the value of rupees hundred and upwards but merely creating a right to obtain another document which will, when executed, need not be registered. The Full Bench of Hon’ble Madras High Court in Narasimha Swamy versus Venkatalingam¹⁵ held that document which does not by itself convey property but merely gives a right to call for another document does not require registration. Explanation to section 17 (2) of the Act makes it clear that even an unregistered document affecting immovable property may be received as evidence of contract in a suit for specific performance. This explanation was added by section 2 of the Indian registration (Amendment) Act, 1927. The explanation states that a document purporting or operating to effect a contract for the sale of immovable property shall not be deemed to require or even to have required registration by reason only of the fact that such a document contains the recital of the payment of any earnest money or the whole or any part of the purchase money. Therefore, a cumulative reading of section 17 (2) (v) and proviso to section 49 of the registration that leads to irresistible conclusion that an agreement for sale of immovable property even though not registered, can form the basis for specific performance. Thus, the agreement for sale dated 4 December 2012 is a valid document which was duly executed by defendant no.1.

¶207

15 AIR 1927 Madras 636 (FB)

¶208

26

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16. In order to examine whether such agreement can be enforced, it would be apposite to consider the provisions of Section 14 and 16 of the Specific Relief Act, 1963 which provides the contract which cannot be specifically enforced. Both the aforesaid provisions are reproduced hereunder for the sake of convenience of discussion.

¶210

“Section 14. Contracts not specifically enforceable. —The following contracts cannot be specifically enforced, namely:— (a) where a party to the contract has obtained substituted performance of contract in accordance with the provisions of section 20; (b) a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise; (c) a contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms; and (d) a contract which is in its nature determinable.”

¶211

“Section 16. Personal bars to relief. —Specific performance of a contract cannot be enforced in favour of a person— 2[(a) who has obtained substituted performance of contract under section 20; or] (b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or (c) 3[who fails to prove] that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant. Explanation.—For the purposes of clause (c),— (i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court; (ii) the plaintiff 4[must prove] performance of, or readiness and willingness to perform, the contract according to its true construction.”

¶212

The facts and evidence on record shows that the contract i.e. the agreement for sale does not fall within the category where the bar in grant of relief could operate as envisaged under section 14 and 16 of the Specific Relief Act.

¶213

16.1. Further this court in Shri Swarnendu Das Gupta (supra) in similar circumstances have passed decree for specific performance of contract. Challenging such decree an appeal was preferred before the Hon’ble Supreme Court being Civil Appeal no. 3133 of 2015 which was dismissed as withdrawn.

¶214

27

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16.2. In light of the above, it is found that the agreement for sale dated 4^th December 2012 is enforceable under the Specific Relief Act.

¶216

17. It has been strenuously argued by Mr. Prasanth, learned advocate on behalf of the respondents that grant of decree for specific performance of contract is discretion of the court and when the plaintiff has prayed for alternative relief of repayment of the earnest money of 16,00,000/- to him, such relief may be granted bearing in mind that the sale deed in respect of the suit property has already been executed and registered in favour of respondent -defendant no.2. The grant of decree of specific performance of contract in favour of the appellant-plaintiff would prejudice the right of respondent-defendant no.2. Per contra , Ms. Nag, learned Senior advocate for appellant-plaintiff submitted that prayer for alternative relief is no bar for grant of actual relief of specific performance of contract. Having heard the learned advocates for the respective party this court is of the view that when a party is entitled to a particular relief, the same cannot be refused on the ground of prayer been made for grant of an alternative relief. Further grant of alternative relief of repayment of the earnest money in the instant suit would mean acceptance and sanction of an illegal action of defendants, which is impermissible in law.

¶217

18. Mr. Prasanth, learned advocate for the respondents by relying on the

¶218

decision of Privy Council in Omanhene Kwamin Bassayin versus

¶219

Omanhene Bendentu-II¹⁶ has vociferously argued that since the agreement for sale was not readover and explained in the language with which the parties are conversant, the same is not enforceable. In this

¶220

16 1937 0 AIR (PC) 274

¶221

28

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regard it is relevant to note that before the learned trial court or before the learned First Appellate Court no such case has been made out on behalf of the respondents-defendants and therefore, such argument is unacceptable without there being any case made out at the behest of the respondentsdefendants.

¶223

19. In light of the above discussion the appeal succeeds and is hereby allowed.

¶224

19.1. The impugned judgment and decree dated 19^th April 2023 of the Learned Additional District Judge, North & Middle, Mayabunder passed in Other Appeal no. 03 of 2022 is hereby set aside.

¶225

19.2. The Judgment and Decree dated 30^th September, 2022 passed by learned Civil Judge (Senior Division), North & Middle, Mayabunder in Other Suit no. 10 of 2015 is hereby affirmed.

¶226

20. No order as to costs.

¶227

21. All connected applications stand disposed.

¶228

22. Interim order, if any, stands vacated.

¶229

23. The appeal is thus disposed of.

¶230

24. Let a copy of this judgment be forwarded to the learned trial court and learned First Appellate Court for information.

¶231

(Bivas Pattanayak, J.)

Babul Roy v. Raj Kumar Sharma and Anr.

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