/2023 INSC 0257/
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
 
CIVIL APPEAL NO. 2535/2023
(@SLP (C) No. 14884/2022)
R. HEMALATHA           ...APPELLANT(S)
    
VERSUS
KASHTHURI        …RESPONDENT(S)
J U D G M E N T
M. R. Shah, J.
1. Leave granted. 
2. Feeling   aggrieved   and   dissatisfied   with   the
impugned   judgment   and   order   passed   by   the
High   Court   of   Judicature   at   Madras   at
Madurai   passed   in   Revision   Application
Page  1  of  26

No.1877   of   2017   dated   01.02.2022   by   which
the   High   Court   has   allowed   the   said   revision
application preferred by the respondent herein
by quashing and setting aside the order passed
by   the   learned   Trial   Court   passed   in   I.A.
No.159   of   2017   in   O.S.   No.199   of   2014   by
further   directing   that   the   document   in
question   shall   be   received   in   evidence   in   the
suit   for   specific   performance,   the   original
defendant has preferred the present appeal. 
3. The facts leading to the present appeal in nut­
shell are as under:
2.1 That   the   respondent   herein   is   an   original
plaintiff   (hereinafter   referred   to   as   “original
plaintiff”) instituted civil suit being O.S. No.199
of   2014   for   specific   performance   of   the
Agreement   to   Sell   dated   10.09.2013.   After   the
Page  2  of  26

chief­examination   of   the   plaintiff   as   PW­1,   on
the application filed by the appellant – original
defendant,   a   preliminary   issue   was   framed   by
the   learned   Trial   Court   on   the   admissibility   of
the Agreement dated 10.09.2013 in evidence. It
was the case on behalf of the defendant that in
view  of   the  Tamil  Nadu  Amendment  Act  No.29
of   2012   to   the   Indian   Registration   Act,   under
which the instruments of agreement relating to
sale   of   immovable   property   of   the   value   of
Rs.100/­   and   upwards   is   compulsorily
required to be registered, the said unregistered
document   shall   be   inadmissible   in   evidence.
On   the  other   hand,  relying  upon   Section   49(a)
and   (c)   of   the   Act,   it   was   submitted   that   an
unregistered Agreement to Sell can be admitted
as   evidence   of   a   contract   in   a   suit   for   specific
performance.   The   learned   Trial   Court   held   the
Page  3  of  26

preliminary   issue   in   favour   of   the   defendant
and   against   the   plaintiff   by   observing   that   the
unregistered   Agreement   dated   10.09.2013
shall not be admissible in evidence.
2.2 Feeling   aggrieved   and   dissatisfied   with   the
order   of   the   learned   Trial   Court,   the   plaintiff
preferred   the   present   revision   application
before   the   High   Court.   By   the   impugned
judgment   and   order,   the   High   Court   has
allowed   the   revision   petition   relying   upon
Section   49   of   the   Registration   Act   by   setting
aside   the   order   passed   by   the   learned   Trial
Court   and   directed   that   the   agreement   in
question   be   received   in   evidence   considering
the   fact   that   the   suit   in   question   is   a   suit   for
specific   performance,   which   falls   within   the
Page  4  of  26

first   exception   carved   out   in   the   proviso   to
Section 49.
2.3 The   impugned   judgment   and   order   passed   by
the   High   Court   directing   to   receive   the
unregistered   Agreement   to   Sell   in   evidence   in
a   suit   for   specific   performance,   the   original
defendant has preferred the present appeal.
3. Learned   counsel   appearing   on   behalf   of   the
appellant   herein   –   original   defendant   has
vehemently   submitted   that   in   the   facts   and
circumstances of the case, the High Court has
materially   erred   in   directing   to   receive   the
unregistered agreement in evidence.
3.1 It   is   submitted   that   it   is   an   admitted   position
that   the   Agreement   to   Sell   dated   10.09.2013
which is the foundation or basis of the suit is
an   unregistered   Agreement   to   Sell   and
Page  5  of  26

therefore   cannot   be   exhibited   in   evidence   for
the   main   purpose   in   the   suit,   in   view   of   the
Tamil   Nadu   Amendment   to   Section   17   of   the
Registration   Act   making   an   Agreement   to   Sell
to   be   compulsorily   registered   with   effect   from
01.12.2012.
3.2 It is submitted that the “explanation” attached
to   sub­clause   (2)   of   Section   17   which   also
relates to Agreement to Sell has been omitted.
It   is   submitted   that   said   explanation   was
inserted   by   Amendment   Act,   1927,   to
overcome the judgment of the Privy Council in
the   case   of   Dayal   Singh   vs.   Indar   Singh,
(1926) 24 LW 396 . It is submitted that in that
case, an advance paid under an Agreement to
Sell   being   a   charge   on   the   property   as   per
Section 55(6)(v) of the Transfer of Property Act
Page  6  of  26

was   held   to   create   an   interest   and   hence,
unregistered   Agreement   to   Sell   cannot   be
admitted   in   evidence.   The   explanation
remedied   the   situation   and   save   the
Agreement   to   Sell   from   the   requirement   of
compulsory registration.
3.3 It is submitted that Section 54 of the Transfer
of   Property   Act   states   that   an   Agreement   to
Sell by itself does not create any interest in or
charge on the property. As per Section 17(2)(v)
of   the   Registration   Act   with   reference   to
Section   1(b)   and   (c),   that   an
agreement/document   simplicitor   merely
creating   a   right   to   obtain   another   document,
was   saved   from   compulsory   registration.   It   is
submitted   that   thus   prior   to   the   amendment
of   2012   and   after   the   amendment,   an
Page  7  of  26

Agreement   to   Sell   simplicitor   or   reciting
payment of earnest money was not required to
be registered. For these savings, an Agreement
to   Sell   would   also   have   required   registration,
as   it   is   a   document   affecting   immovable
property.   It   is   submitted   that   now   after   the
2012   amendment,   an   Agreement   to   Sell   for
Rs.100/­   or   upwards   is   to   be   compulsorily
registered. An agreement recital for payment of
advance   is   also   to   be   compulsorily   registered
as   the   “explanation”   in   Section   17(2)
introduced   by   1927   amendment   after   Dayal
Singh’s case , has been omitted by the present
amendment.   The   advance   amount   and   sale
consideration   are   part   and   parcel   of   the
transactions between the parties.
Page  8  of  26

3.4 It   is   submitted   that   as   per   Section   49(a)   and
(c)   of   the   Registration   Act,   a   document
requires to be registered, if not registered shall
not   affect   the   immovable   property   comprised
therein   and   shall   not   be   received   as   evidence
of   any   transaction   affecting   such   property.   It
is   submitted   that   prior   to   2012   amendment,
when an Agreement to Sell was not required to
be   registered,   Section   49(a)   and   (c)   had   no
operation   in   relation   to   an   Agreement   to   Sell.
So   an   unregistered   Agreement   to   Sell   had   no
restriction in being received as evidence of any
transaction affecting such immovable property
or   affecting   immovable   property   as   such.
Thus,   the   terms   of   the   document   and   the
transaction   embodied   in   it   could   be   relied   on
in   its   entirety   in   any   proceeding   in   the   pre­
amendment   era.   It   is   submitted   that   however
Page  9  of  26

now   after   the   amendment,   Section   49(a)   and
(c)   of   the   Registration   Act   which   are   both
substantive law and rule of evidence, apply to
an unregistered Agreement to Sell and it shall
not affect immovable property and shall not be
received   as   evidence   of   transaction   affecting
immovable property.
3.5 It is further  submitted by the learned counsel
for   the   defendant   that   if   the   interpretation   of
the Hon’ble High Court given in the impugned
order is followed, then the same would render
the   Amendment   Act,   2012   otiose   and
meaningless,   simply   because   the   situation
before the said amendment was exactly as has
been   laid   down   in   the   impugned   order.   The
legislative intent behind making an Agreement
to   Sell,   a   compulsorily   registrable   document
Page  10  of  26

has   been   completely   ignored   by   the   Hon’ble
High Court.
3.6 It   is   submitted   that   after   introduction   of   a
specific provision relating to Agreement to Sell
in   Section   17(1)(g)   of   the   Act,   and   in   the
absence of any amendment in Section 17(2) to
include   clause   (g)   also   within   its   fold,   Section
17(2)(v)   will   only   operate   in   relation   to
documents   covered   under   the   general
provision  of   Clauses  (b) and  (c) of  sub­section
(1).   it   is   submitted   that   in   that   sense   Section
17(2)(v)   will   apply   to   all   other   agreements   to
mortgage, to lease, to release, to exchange etc.
but will not apply to an Agreement to Sell.
3.7 Making   above   submissions,   it   is   prayed   to
allow   the   present   appeal   and   quash   and   set
aside   the   impugned   order   passed   by   the
Page  11  of  26

Hon’ble   High   Court   and   to   restore   the   order
passed by the learned Trial Court.
4. While   opposing   the   present   appeal,   learned
counsel   appearing   on   behalf   of   original
plaintiff has heavily relied upon the proviso to
Section   49   of   the   Registration   Act   which
specifically   provides   that   an   unregistered
document   affecting   the   immovable   property
and   required   by   the   Registration   Act   to   be
registered   may   be   received   as   evidence   of   a
contract   in   a   suit   for   specific   performance
under   Chapter­II   of   the   Specific   Relief   Act   or
as   evidence   of   any   collateral   transaction   not
required   to   be   affected   by   registered
instrument.
4.1 It   is   submitted   that   as   rightly   observed   and
held by the Hon’ble High Court though Section
Page  12  of  26

17(1)   of   the   Registration   Act   has   been
amended   by   the   Tamil   Nadu   Act,   2012   by
inserting   Section   17(1)(g),   making   the
Agreement   to   Sell/   Agreement   affecting   any
immovable   property   compulsorily   required   to
be   registered,   there   is   no   corresponding
amendment   to   Section   49   more   particularly
proviso to Section 49 of the Registration Act.
4.2 It   is   further   submitted   that   even   the   object
and   purpose   of   Tamil   Nadu   Amendment   Act,
2012 more particularly inserting Section 17(1)
(g)   is   required   to   be   considered   which   has
been elaborately dealt with and considered by
the   Hon’ble   High   Court   in   the   impugned
judgment   and   order.   It   is   submitted   that   a
perusal of statement of objects and reasons to
the   Act   No.29   of   2012   would   suggest   that
Page  13  of  26

primarily the amendment has been introduced
by   the   State   of   Tamil   Nadu   by   reason   of   the
fact that instruments of agreement  relating  to
sale   of   immovable   property,   instruments   of
power   of   attorney   relating   to   immovable
property   and   instruments   evidencing
agreement of deposit of title deeds, which were
not   registrable   were   resulting   in   loss   to   the
exchequer   as   the   public   were   executing   these
documents on white paper or  on stamp paper
of nominal value.
4.3 With   the   above   submissions   and   heavily
relying   upon   the   proviso   to   Section   49   of   the
Registration   Act,   it   is   prayed   to   dismiss   the
present appeal.
5. We   have   heard   the   learned   counsel   appearing
on   behalf   of   respective   parties   at   length.   The
Page  14  of  26

short   question   posed   for   the   consideration   of
this   Court   is   effect   of   Section   17(1)(g)   of   the
Registration   Act   applicable   to   the   State   of
Tamil   Nadu   by   which   Section   17(1)(g)   of   the
Registration   Act   has   been   inserted   and
instruments   of   agreement   relating   to   sale   of
immovable   property   of   the   value   of   Rs.100/­
and   upwards  is   made  compulsorily   registrable
and   whether   such   unregistered   agreement
relating   to   sale   of   immovable   property   can   be
received   in   evidence   in   a   suit   for   specific
performance?
6. While   answering   the   aforesaid   issues   and
appreciating the submissions made by learned
counsel   appearing   on   behalf   of   the   respective
parties,   Section   17   of   the   Registration   Act,
1908,   as   applicable   prior   to   the   Registration
Page  15  of  26

(Tamil   Nadu   Amendment)   Act,   2012   and
Section   17   post   Amendment   Act,   2012,   are
required to be referred to which are as under.
7. Section   17   of   the   Registration   Act,   1908,   post
Tamil   Nadu   Amendment   Act,   2012   reads   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:—
(a) instruments of gift of immovable property; 
(b)   other   non­testamentary   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; 
(c)   non­testamentary   instruments   which
acknowledge   the   receipt   or   payment   of   any
consideration   on   account   of   the   creation,
Page  16  of  26

declaration,   assignment,   limitation   or   extinction   of
any such right, title or interest; and
(d) leases of immovable property from year to year,
or   for   any   term   exceeding   one   year,   or   reserving   a
yearly rent;
[(e)   non­testamentary   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:] 
Provided that the [State Government] may, by order
published   in   the  [Official  Gazette],   exempt   from  the
operation   of   this   sub­section   any   lease   executed   in
any  district,  or  part of  a district,  the  terms  granted
by   which   do   not   exceed   five   years   and   the   annual
rents reserved by which do not exceed fifty rupees. 
[(1A) The documents containing contracts to transfer
for   consideration,   any   immovable   property   for   the
purpose   of   section   53A   of   the   Transfer   of   Property
Act,   1882   (4   of   1882)   shall   be   registered   if   they
have   been   executed   on   or   after   the   commencement
of   the   Registration   and   Other   Related   laws
(Amendment)   Act,   2001   (48   of   2001)   and   if   such
documents   are   not   registered   on   or   after   such
commencement,   then,   they   shall   have   no   effect   for
the purposes of the said section 53A.] 
(2)   Nothing   in   clauses   (b)   and   (c)   of   sub­section   (1)
applies to—
(i) any composition deed; or
Page  17  of  26

(ii) any instrument relating to shares in a joint stock
Company,   notwithstanding   that   the   assets   of   such
Company   consist   in   whole   or   in   part   of   immovable
property; or
(iii)   any   debenture   issued   by   any   such   Company
and   not   creating,   declaring,   assigning,   limiting   or
extinguishing   any   right,   title   or   interest,   to   or   in
immovable   property   except   in   so   far   as   it   entitles
the   holder   to   the   security   afforded   by   a   registered
instrument   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
(iv)   any   endorsement   upon   or   transfer   of   any
debenture issued by any such Company; or
(v)   [any   document   other   than   the   documents
specified   in   sub­section   (1A)]   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
(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   subject­matter   of   the   suit   or
proceeding]; or
(vii)   any   grant   of   immovable   property   by
[Government]; or
Page  18  of  26

(viii)   any   instrument   of   partition   made   by   a
Revenue­Officer; or
(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
(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
[(xa)   any   order   made   under   the   Charitable
Endowments   Act,   1890   (6   of   1890),   vesting   any
property   in   a   Treasurer   of   Charitable   Endowments
or divesting any such Treasurer of any property; or]
(xi)   any   endorsement   on   a   mortgage­deed
acknowledging   the   payment   of   the   whole   or   any
part   of   the   mortgage­money,   and   any   other   receipt
for payment of money due under a mortgage when
the   receipt   does   not   purport   to   extinguish   the
mortgage; or
(xii) any certificate of sale granted to the purchaser
of any property sold by public auction by a Civil or
Revenue­Officer.
[Explanation.—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.]”
Page  19  of  26

8. By Tamil Nadu Amendment Act, 2012, Section
17(1)(g) has been inserted and “explanation” to
Section   17(2)   has   been   omitted.   Section   17(1)
(g) as inserted by Tamil Nadu Amendment Act,
2012, reads as under :
“ 17(1)(g)   instruments   of   agreement   relating   to   sale
of immovable  property of  the  value  of one hundred
rupees and upwards.”
9. Thus,   on   and   after   the   Tamil   Nadu
Amendment Act, 2012, as per Section 17(1) (g),
instrument   of   agreement   relating   to   sale   of
immovable   property   of   the   value   of   Rs.100/­
and   upwards   is   required   to   be   registered
compulsorily.   However,   despite   the   same   and
despite   the   “explanation”   to   sub­section   (2)   of
Section   17   has   been   omitted,   there   is   no
corresponding amendment made to Section 49
Page  20  of  26

of   the   Registration   Act.   Section   49   of   the
Registration Act is as under :
“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 
(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.]”
10. Thus,   as   per   proviso   to   Section   49,   an
unregistered   document   affecting   the
Page  21  of  26

immovable   property   and   required   by
Registration   Act   to   be   registered   may   be
received as evidence of a contract in a suit for
specific   performance   under   Chapter­II   of   the
Specific Relief Act, 1877, or as evidence of any
collateral   transaction   not   required   to   be
effected by registered document.
11. At this stage, the primary statement of objects
and   reasons   to   the   Tamil   Nadu   Amendment
Act, 2012, is also required to be referred to and
considered.   The   primary   statement   of   objects
and  reasons  seem  to  suggest  that  amendment
has   been   introduced   by   the   State   of   Tamil
Nadu   bearing   in   mind   the   loss   to   the
exchequer   as   public   were   executing   the
documents   relating   to   sale   of   immovable
Page  22  of  26

property etc. on white paper or on stamp paper
of nominal value.
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
Page  23  of  26

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.
13. 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   Chapter­II
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
Page  24  of  26

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.
14. In view of the above and for the reasons stated
above,   the   present   appeal   fails   and   the   same
deserves   to   be   dismissed.   It   is   accordingly
Page  25  of  26

dismissed.   There   shall   be   no   orders   as   to
costs. 
…………………………………J.
            (M. R. SHAH)
…………………………………J.
(KRISHNA MURARI)
New Delhi, 
April 10, 2023
Page  26  of  26