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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 18377   OF  2017

AMEER MINHAJ      …..Appellant(s)   :Versus:

DIERDRE ELIZABETH (WRIGHT) ISSAR  AND ORS.       ....Respondent(s)

J U D G M E N T

A.M. Khanwilkar, J.

1. This appeal emanates from the decision of the High Court

dated 2nd  December, 2016 allowing the application preferred

by respondent Nos.1 & 2 (defendant Nos.3 & 4) whereby the

admissibility of the documents produced by the appellant

(plaintiff) in the suit filed by him for relief of specific

performance of contract  with alternative relief of refund of

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advance amount and permanent injunction against the

defendants was questioned.   2. The appellant filed a suit in the Court of District Judge of

the Nilgiris  at Udhagamandalam, being O.S.  No.23 of  2010,

against  Mr.  Charles Thomas  Orme  Alford  Wright  who  died

during the pendency of the suit whereafter respondent Nos.1

& 2 herein (defendant Nos.3 & 4) were brought on record as

his heirs and legal representatives. It was asserted in the suit

that the original  defendant  No.1 was the absolute  owner of

4.80 acres of  land in Survey No.H­48A in R.S.  No.332/1 of

Coonoor Rural Village. He had entered into an agreement of

sale with respondent No.3 (defendant No.2) on 12th November,

1995 agreeing to sell  the said property either to the second

defendant or its nominees. It is further asserted by the

appellant (plaintiff) that in furtherance of the said agreement

to sell the second  defendant  was  put in  possession  of the

property agreed to be sold, in part performance of the

agreement of sale and that fact has been recited in the

agreement  of  sale itself.  The agreement  also  authorized  the

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second defendant, at its discretion, to develop the property by

constructing dwelling units thereon for which the predecessor

in title of respondent Nos.1 & 2 (namely the original 1st

defendant) was to cooperate and give consent, whenever and

wherever necessary,  for the unhindered development of the

property. It was then asserted by the appellant (plaintiff) that

to effectuate the stated agreement to sell, a registered Power of

Attorney was executed in favour of the second defendant

(respondent No.3) by the owner (original first defendant). That

Power of Attorney was registered on 2nd May, 1996 in the office

of Sub Registrar, Coonoor. It was then stated that since

respondent No.3 (defendant No.2) was unable to develop the

said property due to unavoidable situation, he requested the

appellant (plaintiff) to execute the project of developing the suit

property into building sites for dwelling units and to sell it to

prospective purchasers. The appellant (plaintiff) accepted the

said offer after doing due diligence and resultantly, an

agreement of sale came to be executed on 9th July, 2003 by the

1st defendant ­ the original owner of the suit property namely

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the predecessor in title of respondent Nos.1 & 2 ­ in favour of

the appellant (plaintiff) through his Power of Attorney holder,

namely, respondent No.3 (2nd defendant) for a consideration of

Rs.1 crore. Earnest money of Rs.25 lakh was paid at the time

of the execution of agreement of sale and the balance was to

be paid  within a period of 12  months, subject to certain

stipulations. The appellant (plaintiff) was put in possession of

the suit property  upon execution of the agreement of sale

dated 9th  July, 2003. The 1st  defendant did not fulfill his

obligation within the stipulated period as a result of which a

suit for specific performance, permanent injunction and

alternative relief of refund of the advance amount came to be

filed on 2nd  August, 2010.   

3. Admittedly, neither the agreement to sell dated 12th

November, 1995 executed in favour of defendant No.2

(respondent  No.3)  nor the  agreement to  sell  dated 9th  July,

2003 executed in favour of the appellant (plaintiff) has been

registered. The Power of Attorney in favour of respondent No.3

(defendant No.2) dated 2nd May, 1996 has been registered but

executed on a stamp paper of Rs.100/­ only.

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The  defendants filed their  written  statement to  counter the

claim set up in the plaint by the appellant. It is not necessary

to dilate on the factual matrix as the issue to be answered in

the present appeal/proceedings is very limited.   

4. Suffice it to observe that the contesting defendants have

asserted that the Power of Attorney executed in favour of

respondent No.3 (defendant No.2) by the original owner of the

suit property (defendant No.1) and predecessor in title of

respondent  Nos.1  & 2)  has  been cancelled  on 2nd  January,

2002. As a result, respondent No.3 (defendant No.2) could not

have executed the agreement to sell in favour of the appellant

(plaintiff) on 9th July, 2003.   

5. Be that as it may, respondent Nos.1 & 2 (defendant Nos.3

& 4) moved a formal application for deciding the admissibility

of  unregistered agreements to sell  and also to  impound the

Power of Attorney for having been executed upon payment of

insufficient stamp duty and to impose suitable penalty  before

proceeding with the trial. That application was rejected by the

Trial Court on  20th  June, 2011 against  which the original

defendant No.1 and defendant No.3 (respondent No.1) filed a

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revision petition before the High Court of Judicature at

Madras, being CRP (MD) No.3422/2011. They were

unsuccessful as the High Court dismissed the revision petition

on 30th September, 2011  holding that the question of payment

of stamp duty or the admissibility of the document could be

decided only when the stated documents were sought to be

marked  through witnesses  and not at that stage. Therefore,

after the plaintiff filed an affidavit of evidence and sought to

rely on the said three documents, defendant Nos.3 & 4

(respondent Nos.1 & 2) who were brought on record as legal

heirs of original defendant No.1, filed a joint application, being

I.A. No.26/2013, for deciding the question whether the three

documents could be received as evidence. That application

was decided by the Trial  Court on 1st  June,  2016 partly  in

favour  of  defendant  Nos.3  &  4.  The  Trial  Court essentially

answered the question with reference to the mandate of

Section 17(1A) of the Registration Act, 1908 (for short, “1908

Act”) which was inserted by Act 48 of 2001 with effect from

24th September, 2001.  The Trial Court took the view that the

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agreement to sell dated  12th  November, 1995, having been

executed prior to the cut­off date, was admissible and could be

marked as an Exhibit. As regards the Power of Attorney

executed in favour of respondent No.3 (defendant No.2) on 2nd

May, 1996, the Trial Court opined that since it was a

registered document, there was legal presumption about the

correctness of the valuation of the document for the purpose of

stamp duty.  Further, the document was only a General Power

of Attorney deed and did not refer to any consideration

amount. Further, it only authorized respondent No.3

(defendant No.2) to act in terms of the Power of Attorney and

therefore, it could not be construed as a document of

conveyance. Accordingly, the Trial Court rejected the objection

of respondent Nos.1 & 2 (defendant Nos.3 & 4) for receiving

the said document as evidence. However, with regard to the

third  document,  being  an agreement to  sell  dated  9th  July,

2003, the Trial Court opined that since the same was executed

after coming into force of Section 17(1A) of the 1908 Act,   it

was required to be registered. But then, considering the

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purport of the said provision, the document could still be

exhibited and even if exhibited, the prayer in respect of relief of

protection of possession in terms of Section 53A of the

Transfer of Property Act, 1882 (for short, “1882 Act”) could not

be granted. In the ultimate analysis,  the Trial  Court opined

that all the three documents could be marked and received as

evidence. The Trial Court, however, made it clear that it was

not examining any other contention regarding the

genuineness, validity and binding nature of the documents or

whether they were hit by the provisions of the Indian Stamp

Act, 1899 (for short, “1899 Act”) and 1882 Act. The documents

were marked and merely exhibited subject to proof and

relevancy.  

6. Being aggrieved by the said decision, respondent Nos.1 &

2 (defendant Nos.3  & 4) preferred a civil revision petition

before the  High  Court of Judicature at  Madras  being  CRP

(P.D.) No.1700/2016. The High Court reversed the decision of

the Trial Court. The High Court interpreted the General Power

of Attorney dated 2nd May, 1996 and construed it as having

been given for consideration in furtherance of the agreement to

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sell  dated 12th  November,  1995.  The High Court noted that

since the said General Power of Attorney refers to the

agreement to sell dated 12th  November, 1995, the terms and

conditions specified in the latter document would get

incorporated into the Power of  Attorney,  meaning thereby it

was  given  for  consideration,  and  therefore, it  would  attract

stamp duty applicable to a deed of conveyance.   It could not

have been executed on the stamp paper of Rs.100/­.   Hence,

the document was inadmissible and could not be received as

evidence. As regards the agreement to sell dated 9th  July,

2003, the High Court opined that the same was required to be

registered compulsorily and the Trial Court was not correct in

making an observation that there was no need for registration

thereof.  The High Court, accordingly, allowed the civil revision

petition and was pleased to set aside the order passed by the

Trial Court and instead allowed the application filed by

respondent Nos.1 & 2 (defendant Nos.3 & 4), by holding that

the General Power of Attorney dated 2nd May, 1996 was given

for consideration as it was in furtherance of the agreement of

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sale dated 12th November, 1995.  Further, the sale agreement

dated  9th  July, 2003  was inadmissible as evidence for the

purpose of part performance of contract in view of the

statutory bar in terms of Section 17(1A) read with Section 49

of the 1908 Act.   

7. We  have heard  Mr. B. Karunakaran, learned counsel

appearing for the appellant and Mr. Jayant Bhushan, learned

senior counsel appearing for the contesting respondents.   

8. The limited issue, as considered by the Trial Court and

High Court at the instance of respondent Nos.1 & 2 (defendant

Nos.3 & 4), was about receiving the three documents produced

by the appellant (plaintiff)  as evidence.  The Trial  Court had

examined the issue  with reference to the  provisions of the

Registration  Act  only  and had  left  open all  other  questions

regarding the validity, genuineness and binding nature of the

said documents, including whether the same were hit by the

provisions of the 1899 Act and the 1882 Act.  The Trial Court

opined that  those aspects could be decided on the basis of

evidence, both oral and documentary, to be adduced by the

parties.

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9. In other  words, the core issue to  be  answered in the

present appeal is whether the suit agreement dated 9th  July

2003, 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(1A) of the 1908 Act came into

force with effect from 24th September, 2001. Whereas, the suit

agreement was executed subsequently on 9th  July, 2003.

Section 17 (1A) of the 1908 Act reads thus:

“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:­ XXX XXX XXX (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. XXX XXX XXX”

10. On a plain reading of this provision, it is amply clear that

the document containing contract to transfer the right, title or

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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 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, in

our opinion, is no more res integra.   In S. Kaladevi Vs. V.R.

Somasundaram and Ors.,1 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.  Section 49 of the 1908 Act reads thus:

“49. Effect of non­registration 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  

1  (2010) 5 SCC 401

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

11. In the reported decision, this Court has adverted to the

principles delineated in K.B. Saha and Sons Private Limited

Vs. Development Consultant Limited,2  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 exposition, the conclusion recorded by the High

Court in the impugned judgment that the sale agreement

dated 9th  July, 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

2  (2008) 8 SCC 564

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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.   

12. Reverting to the registered General Power of Attorney, the

same has been executed by the original defendant  No.1 ­

predecessor in title of respondent Nos.1 & 2 (defendant Nos.3

& 4), in favour of respondent No.3 (defendant No.2). Being a

registered document, in our opinion, the Trial Court was

justified in observing that there is a legal, rebuttable

presumption that the same has been duly stamped. As

observed by the Trial Court, the question as to whether the

document 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 High Court, in our opinion,

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therefore, should have stopped at that instead of analysing the

said instrument by invoking the principle of incorporation by

reference to the agreement to sell dated 12th November, 1995.

For, the appellant (plaintiff) is not a party to the said

document. Indeed, the executor  of the  document  – original

defendant No.1 and the defendant No.2 in whose favour the

same has been executed, are parties to the present suit.  The

principal document, namely, the agreement to sell dated 12th

November, 1995, as rightly noticed by the Courts below, was

executed prior to coming into  force of Section 17(1A) of  the

1908 Act. 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.  

13. As a result, the Trial Court was right in overturning the

objection regarding marking and exhibiting these documents

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as urged by respondent Nos.1 & 2 (defendant Nos.3 & 4), while

making it clear that the question regarding the genuineness,

validity and binding nature of the documents, including as to

whether it is hit by the provisions of 1882 Act or the 1899 Act,

as the case may be, would be decided at the appropriate stage.

14. The High Court has adverted to the decision in Avinash

Kumar Chauhan Vs. Vijay Krishna Mishra3, which,

however, deals with the power of the Court to impound

insufficiently stamped instruments in exercise of its power

under Section 35 of the 1899 Act. That issue will have to be

considered by the Trial Court at the appropriate stage which

has already been kept open.

15. Accordingly, this  appeal  ought to  succeed by restoring

the order of the Trial Court dated 1st June, 2016 in the above

terms.  The Trial Court shall decide all other issues concerning

the validity, genuineness, applicability and binding nature of

the documents including whether it is hit by the provisions of

the 1882 Act or the 1899 Act on its own merits and

3   (2009) 2 SCC 532

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uninfluenced by the observations made by it or by the High

Court.   16. The appeal is allowed in the above terms. There shall be

no order as to costs.  

17. As the  suit is  pending since 2010,  we direct the  Trial

Court to  dispose  of the same  as expeditiously as  possible,

preferably  within a period of six  months from the date of

receipt of a copy of this judgment.           

.………………………….CJI. (Dipak Misra)

…………………………..….J.           (A.M. Khanwilkar)

…………………………..….J.        (Dr. D.Y. Chandrachud)

New Delhi; July  04, 2018.