[Cites 21, Cited by 0]
Gujarat High Court
Manojbhai Champakbhai Chauhan vs Sushmaben Mahendrabhai Rohit on 6 March, 2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 3086 of 2024
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2024
In R/FIRST APPEAL NO. 3086 of 2024
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2026
In R/FIRST APPEAL NO. 3086 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MRS. JUSTICE M. K. THAKKER
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Approved for Reporting Yes No
YES
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MANOJBHAI CHAMPAKBHAI CHAUHAN
Versus
SUSHMABEN MAHENDRABHAI ROHIT & ORS.
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Appearance:
MR AMIT N PATEL(2749) for the Appellant(s) No. 1
MR CHAITANYA S JOSHI(5927) for the Defendant(s) No. 1,2
MR KASHYAP R JOSHI(2133) for the Defendant(s) No. 3,4
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CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER
Date : 06/03/2026
JUDGMENT
1. The present appeal is filed under Section 96 of the
Code of Civil Procedure challenging the judgment and
decree dated 08.05.2024 passed by the learned 5th
Additional Senior Civil Judge, Bharuch in Special Civil
Suit No.124 of 2014, whereby the learned Court has
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decreed the suit filed by the opponent Nos.1 and 2 -
original plaintiffs and cancelled the notarized
Agreement to Sell dated 10.08.2011. The learned
Court has further directed the present appellant to
handover possession of the suit property within a
period of two months from the date of the judgment,
and also directed the present appellant to pay mesne
profits from 11.08.2014 at the rate of Rs.10,000/- per
month till handing over possession of the suit
property.
Factual Matrix:
2. The present respondent Nos.1 and 2 are the original
plaintiffs, the present appellant is the original
defendant No.1, and the present respondent Nos.3
and 4 are the original defendant Nos.2 and 3 in the
plaint (hereinafter the parties are referred to as per
their original status).
2.1. The suit came to be filed by the original
plaintiffs, who were partners of Shraddha Heat
Treatment along with defendant No.3. The said
partnership firm was possessing properties for
industrial purposes situated at Bholav GIDC Estate,
Bharuch, namely: Plot No.K-1/57/7, Phase-I shed
along with machinery, and Plot No.K-1/57/8, Phase-
I shed along with machinery (hereinafter referred
to as "the suit property"). As contended in the
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plaint, the partnership firm was engaged in the
business of heat treatment of bearings and repair
work in the suit properties. It is further contended
that respondent Nos.1, 2 and 4, who were partners
of the partnership firm, executed a notarized
Agreement to Sell (Banakhat) dated 10.08.2011 in
favour of the present appellant as well as
respondent Nos.3 and 4, agreeing to sell the suit
property for a total consideration of
Rs.71,00,000/-. It is further contended that
respondent Nos.1 and 2 as well as respondent
No.4 had received token money of Rs.5,00,000/-
from the present appellant, and it was agreed that
the remaining amount would be paid in three
different instalments.
2.2. The plaintiffs have contended that the said
Banakhat was executed in connivance with
defendant No.3, who was also a partner of the
partnership firm and who allegedly acted both as a
seller and purchaser in the said agreement to sell.
It is further contended that the plaintiffs had
neither received any amount towards the sale
consideration nor had they signed the agreement
to sell. It is further stated that defendant No.1 had
filed Regular Civil Suit No.268 of 2012 seeking a
declaration and permanent injunction, inter alia,
declaring that defendant No.1 is the lawful
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possessor of the suit property on the basis of the
Banakhat and praying that the suit property may
not be transferred in favour of any third party. In
the said suit, an application below Exhibit-5 was
filed which was ordered to be heard along with the
main civil suit. The plaintiffs appeared in the said
proceedings and contended that the alleged
Banakhat was executed in connivance with
defendant No.3, who was a partner of the
partnership firm along with the plaintiffs. It was
further contended that the plaintiffs had neither
received Rs.5,00,000/- nor any other amount
towards the sale consideration. It was also
contended that no suit for specific performance of
the alleged agreement to sell was filed, nor was
any readiness and willingness shown to pay the
remaining sale consideration. It was further
contended that the said Banakhat was neither
registered nor in possession of the plaintiffs and
that the same was not executed by them. In the
above background, the present Special Civil Suit
No.124 of 2014 came to be filed seeking
cancellation of the notarized agreement to sell
dated 10.08.2011, along with a prayer for mesne
profits and a direction to hand over possession of
the suit property.
2.3. Upon service of summons, the defendants
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appeared and filed their written statement
contending that the suit is barred by limitation. It
was contended that defendant No.3, who was a
partner of the partnership firm along with the
plaintiffs, along with the other partners had
decided to sell the suit property and accordingly
executed the agreement to sell. It was further
contended that earnest money of Rs.5,00,000/-
was paid by defendant No.1, pursuant to which
possession of the suit property along with
machinery was handed over to him. It was also
contended that the remaining sale consideration
was paid to defendant No.3 and therefore no
cause of action had arisen for filing the present
suit. In the above background, the defendants
prayed that the suit be dismissed.
3. For the purpose of adjudication of the suit, the
learned Trial Court framed the following issues and
answered them accordingly:
(1) Whether the plaintiff proves that the registered
Sale Deed dated 11.08.2011 bearing Registration No.
10732/2011, allegedly executed without consideration, is
false, illegal and void?
Answer is Affirmative.
(2) Whether the plaintiff proves that the Sale Deed
dated 11.08.2011 bearing Registration No. 10732/2011 is
not binding upon the plaintiffs?
Answer is Affirmative.
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(3) Whether the plaintiff proves that they are entitled
to recover possession of the suit property from the
defendants and are further entitled to mesne profits?
Answer is Partly Affirmative.
(4) Whether the plaintiff proves that Defendant No.1
had carried on business by using the plaintiff's
machinery, as a result of which the machinery became
unfit for use, and consequently, whether the plaintiff is
entitled to recover compensation of ₹20,00,000/-
towards loss of machinery?
Answer is Negative.
(5) Whether the plaintiff is entitled to the reliefs
prayed for in the plaint?
Answer is Partly Affirmative
(6) What order and decree?
Answer is as per final order.
4. To prove the issues, plaintiff No.1-Sushmaben was
examined at Exhibit 29 and another witness, namely
Mahendrabhai Dahyabhai Rohit, was examined at
Exhibit 42. In addition thereto, documentary
evidence in the nature of the registration certificate
of the partnership firm, copy of the Banakhat at
Exhibit 32, newspaper publication at Exhibit 33,
chapter proceedings filed against the husband of
plaintiff No.1 by defendant No.1 at Exhibit 37,
chapter proceedings filed by defendant No.1 against
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defendant No.3 at Exhibit 38, and the papers of Civil
Suit No.268 of 2012 including the injunction
application filed below Exhibit 5 were produced at
Exhibit 47. The agreements to sell executed by the
plaintiffs for purchasing the suit property from the
original owner were produced at Exhibits 35 and 36.
The defendants did not produce any oral or
documentary evidence and therefore their stage to
lead evidence came to be closed. The learned Trial
Court, after considering the evidence on record,
decreed the suit on the ground that the agreement to
sell produced at Exhibit 32 was a notarized document
and did not satisfy the requirements of Sections
17(1)(b) and 49 of the Registration Act, and therefore
the same was not admissible under Section 53A of
the Transfer of Property Act. The said judgment is the
subject matter of challenge before this Court.
5. Heard the learned advocate Mr. Amit N Patel for the
appellant and learned advocate Mr. Chaitanya Joshi
for defendant Nos.1 and 2 and learned advocate Mr.
Kashyap Joshi for the defendant No.3 and 4.
6. Learned advocate Mr. Amit Patel for the appellant
submitted that the learned Trial Court failed to
appreciate that respondent Nos.1 and 2 (original
plaintiffs), in connivance with defendant No.3, had
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agreed to sell the suit property for a total sale
consideration of Rs.71,00,000/- and had received a
token amount of Rs.5,00,000/- at the time of
execution of the agreement to sell (Banakhat) dated
10.08.2011. It is submitted that pursuant to the said
agreement, possession of the suit property was
handed over to the appellant. It is further submitted
by the learned advocate Mr. Patel that only after the
appellant filed Regular Civil Suit No.268 of 2012
seeking declaration and injunction, the present suit
came to be filed by the plaintiffs seeking possession
of the property, cancellation of the agreement to sell
and mesne profits. It is contended that if the plaintiffs
had not received the amount as stated in the
agreement to sell, they could have filed a suit for
specific performance of the contract or for recovery
of the remaining amount.
6.1. It is further submitted by the learned advocate
Mr. Patel that during the cross-examination, the
plaintiff categorically admitted that he had
received an amount of Rs.5,00,000/- as token
money towards the Banakhat from the appellant
and had also signed the agreement to sell.
However, after receiving the entire consideration,
the plaintiffs resiled from the said fact and filed the
present suit seeking possession and other
consequential reliefs. Learned advocate Mr. Patel
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further submitted that there was no condition in
the Banakhat regarding payment of mesne profits
to the plaintiffs. On the contrary, the Banakhat
specifically provided that in the event the
remaining consideration was not paid within the
stipulated time, the plaintiffs would only be
entitled to recover the said amount. It was also
clarified in the said agreement that in no
circumstances would the appellant be required to
hand over possession of the suit property back to
the plaintiffs. The said fact was also admitted by
plaintiff No.1 during cross-examination. However,
the learned Trial Court, without considering the
said condition, which specifically provided that the
plaintiffs would only be entitled to claim the unpaid
amount with interest at the bank rate, decreed the
suit in favour of the plaintiffs.
6.2. It is further submitted by the learned advocate
Mr. Patel that the learned Trial Court
misinterpreted the provisions of the Registration
Act and the Transfer of Property Act by holding
that since the Banakhat was unregistered, the
same was not admissible in the eyes of law. It is
contended that pursuant to the said Banakhat, the
plaintiffs had handed over possession of the suit
property and had received the consideration from
the appellant, and therefore the said document
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could not have been discarded in such a manner.
Learned advocate Mr. Patel further submitted that
though Civil Misc. Application No.373 of 2014 was
filed seeking consolidation of the two suits, namely
Regular Civil Suit No.268 of 2012 and Special Civil
Suit No.124 of 2014, the learned Court proceeded
with Special Civil Suit No.124 of 2014 without
deciding Regular Civil Suit No.268 of 2012 and
ultimately decreed the suit. Therefore also, the
impugned judgment deserves interference.
6.3. It is further submitted by the learned advocate
Mr. Patel that the rojkam of Special Civil Suit
No.124 of 2014 reveals that on 04.04.2024 the
stage of the defendant to lead evidence was
closed and thereafter the matter was kept for final
arguments on 24.04.2024 and 02.05.2024. On
both the said dates, the advocates for the
respective parties remained absent. Consequently,
the learned advocate for the plaintiffs did not
advance final arguments and the learned advocate
for the defendant was also not granted an
opportunity to address final arguments.
Thereafter, on 08.05.2024 the judgment came to
be pronounced. It is therefore submitted that the
appellant was not granted sufficient opportunity of
hearing and the suit came to be decreed without
hearing the appellant. In that background, it is
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prayed that the impugned judgment and decree
deserve to be set aside and the appeal be allowed.
7. Per contra, learned advocate Mr. Joshi appearing for
the respondents submits that the appellant has failed
to demonstrate that the learned Trial Court has
committed any error while passing the impugned
judgment. It is submitted that the agreement to sell
is a document which is mandatorily required to be
registered under Section 17(1)(A) of the Registration
Act, however, the same has remained unregistered
and therefore the said document cannot be relied
upon in the eye of law. It is further submitted by the
learned advocate Mr. Joshi that any benefit obtained
by the appellant on the basis of the said unregistered
document is required to be reversed. It is submitted
that the execution petition came to be filed by
respondent Nos.1 and 2 and, pursuant thereto, the
learned Executing Court has issued the possession
warrant of the suit property in favour of respondent
Nos.1 and 2. In that background, it is prayed that the
appeal be dismissed and the judgment rendered by
the learned Trial Court be confirmed.
8. Having considered the submissions made by the
learned advocates for the respective parties and on
perusal of the record and proceedings, the moot
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question that arises for consideration is as under::
Whether the learned Trial Court is justified in passing
the decree and granting the prayers made in the
plaint on the ground that the agreement to sell is
unregistered?
Answer is partly affirmative.
9. To determine the above point, this Court has referred
to the copy of the plaint produced below Exhibit-1,
wherein the suit came to be filed by the partners of
Shradhdha Heat Treatment, namely, Sushmaben
Mahendrabhai Rohit and Ramilaben Ratilal Shelat
against Manojbhai Chauhan, Shabbirbhai Chokwala
and Vijaykumar Chauhan. It is contended in the said
plaint that the plaintiffs and defendant No.3, namely
Vijaykumar Chauhan, are the partners of Shradhdha
Heat Treatment. It is further contended that the so-
called Banakhat is alleged to have been executed on
10.08.2011 between the plaintiffs and defendant
No.3 on one side and defendant Nos.1, 2 and 3 on
the other side, agreeing to sell the plot situated at
Moje Bholav, District Bharuch, in GIDC Estate, Phase-
I, along with shed and machinery, for a sale
consideration of Rs.71,00,000/-. Out of the said sale
consideration, an amount of Rs.5,00,000/- is stated to
have been received by the plaintiffs. It is further
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stated that defendant No.1 had filed a suit against
the plaintiffs and defendant No.3 being Regular Civil
Suit No.268 of 2012 seeking a declaration that the
defendants were in possession of the property
pursuant to the Banakhat and also seeking an
injunction restraining the plaintiffs from interfering
with the possession of defendant No.1.
9.1. The plaintiffs appeared before the learned Court
in the said suit and contested the application filed
below Exhibit-5, which was subsequently ordered
to be heard with the main suit on 12.10.2023.
During the pendency of the said suit, the present
suit came to be filed contending that no Banakhat
had been executed, that the so-called Banakhat is
unregistered, and that the plaintiffs had not
received any amount as mentioned in the
Banakhat. With the aforesaid contentions, the
plaintiffs prayed for cancellation of the agreement
to sell (Banakhat) with possession dated
10/11.08.2011, for a declaration that the plaintiffs
had not received any amount towards the sale
consideration, and also for recovery of rent from
10.08.2011 as well as mesne profits at the rate of
Rs.1,00,000/-.
9.2. The learned Court, on 04.04.2024, recorded that
the suit was at the stage of recording the evidence
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of the defendants from 20.12.2023, however, the
defendants did not remain present and therefore
the stage for the defendants to lead evidence
came to be closed. Consequently, the defendants
contested the suit only by cross-examining the
plaintiffs and failed to produce any oral or
documentary evidence.
9.3. The Banakhat produced below Exhibit-32
suggests that defendant No.3 acted both as a
vendor as well as a vendee (along with the
plaintiffs on one side and defendant Nos.1 and 2
on the other side). As per the conditions of the said
Banakhat, an amount of Rs.5,00,000/- was
received by the vendors on 10.08.2011 and the
remaining amount of Rs.66,00,000/- was
scheduled to be paid on or before 31.03.2012 in
31 instalments. It is further provided in the said
Banakhat that in the event the vendees failed to
pay the remaining consideration, the vendors
would be entitled to recover the said amount with
interest at the Bank rate. It is also stated in the
Banakhat that possession of the property along
with machinery had been handed over to the
vendees.
9.4. The plaintiffs also assured that the responsibility
of obtaining the signature of the original owner,
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namely Lalitkumar Sharma, would be upon them.
As per the schedule of the Banakhat, along with
the shed and machinery, possession of the
industrial plot situated at GIDC was handed over to
the defendants. On referring to the plaint of
Regular Civil Suit No.268 of 2012 filed by
Manojbhai, who is defendant No.1, it appears that
the said suit was filed for a declaration that as per
the notarized Banakhat the defendant No.1 is
entitled to peaceful possession and had sought an
injunction accordingly. Admittedly, neither the
plaintiffs nor the defendants filed any suit for
specific performance of the said Banakhat. After
the filing of the suit by defendant No.1, the
plaintiffs issued a notice in the newspaper
declaring that the plaintiffs and defendant No.3
are the partners of Shradhdha Heat Treatment and
that without the consent of the plaintiffs no
property may be transferred by any partner nor
any person may be treated as having been
inducted into the partnership firm. The plaintiff
No.1 entered the witness box and her oral
evidence came to be recorded below Exhibit-29. In
her deposition also it was contended that no
Banakhat had been executed, no amount had
been received, and that the alleged Banakhat was
not registered.
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10. The cross-examination of the plaintiff is
noteworthy, as during the course of such cross-
examination, the plaintiff has admitted the following
aspects:
10.1.The plaintiff has stated that she does not know
one Lalitkumar Sharma. The plaintiff admits that
an agreement to sell dated 10.08.2011 was
executed between the plaintiff and defendant
No.3, which was notarized before the Public
Notary, Smt. Jyotiben Parmar, and the same is
produced below Exhibit 32. The plaintiff has
admitted her signature on the said Banakhat along
with the signatures of the defendants and has also
admitted that the said agreement was executed in
the presence of witnesses. The plaintiff further
admits the photograph affixed on the document,
the stamp thereon, as well as the receipt of
Rs.5,00,000/- from the defendant, stating that
pursuant to the agreement an amount of
Rs.5,00,000/- was received by the plaintiff and the
other partners. It is also admitted that as per the
said agreement to sell, possession of the suit
property was handed over to defendant No.1.
10.2.The plaintiff has further admitted that as per the
terms of the said agreement, the possession was
not required to be returned in any event, however,
if the purchaser failed to pay the remaining sale
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consideration, the plaintiff would be entitled to
recover the same with interest at the Bank rate.
The plaintiff admits that she had demanded the
remaining amount of sale consideration but has
not produced any demand notice before the Court.
As per the recitals of the said agreement, the
plaintiff admits that the original owner of the plot
is one Lalitkumar M. Sharma and that the
responsibility of getting the property transferred in
the name of the defendant was undertaken by the
plaintiff. It is also admitted that after filing of the
suit, certain deeds were executed between the
plaintiff and Lalitkumar Sharma.
10.3.The plaintiff admits that she had filed the suit
for recovery of the remaining amount and, in case
the amount was not paid, to seek possession of
the suit property. It is further admitted that
Regular Civil Suit No.268 of 2012 was filed in the
year 2012 and the present suit came to be filed on
11.08.2014. The plaintiff also admits that the suit
property referred to in Exhibit 32 was sold to
defendant Nos.1 to 3 and thereafter a partnership
was entered into between defendant Nos.1 and 3,
and the partnership deed is produced below
Exhibit 31. As per the said partnership deed,
defendant Nos.1 and 3 had undertaken the
contract for repairing valves in the name of ABC
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Company. The plaintiff admits that defendant No.3
continues to remain a partner of Shradhdha Heat
Treatment even as on the date of deposition and
that the agreement at Exhibit 32 was still in
operation on the date of her deposition before the
learned Court. It is further admitted that the
present suit was filed in the year 2014 on the
ground that defendant No.1 had not paid the
remaining sale consideration and to recover the
said amount the present prayer was made. The
plaintiff also admits that even today the machinery
for repairing bearings and valves is lying on the
suit property. It is admitted that after the year
2011 she did not visit the said plot. She further
admits that the management and administration of
the said plot was carried out by her husband and
that the present suit came to be filed as per the
instructions of her husband. The plaintiff also
admits that she does not have any evidence to
suggest that the machineries on the suit property
were damaged. Thereafter, the husband of the
plaintiff, namely Mahendrabhai Dahyabhai Rohit,
was examined below Exhibit 42. In his
examination-in-chief, he has stated that the
present suit came to be filed due to the filing of
Regular Civil Suit No.268 of 2012. During his cross-
examination, the said witness admits that he is not
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a signatory to Exhibit 32. No significant
contradictions emerge from the evidence of this
witness.
11. In the background of the aforesaid facts, it emerges
that though the plaintiffs initially denied the
execution of any agreement to sell and the receipt of
any amount, they subsequently admitted during the
course of cross-examination the existence of such
agreement as well as the receipt of the amount. The
plaintiff has categorically stated that, even as on the
date of deposition, the agreement produced at
Exhibit 32 is in operation and the possession of the
suit properties was handed over in pursuance of the
said agreement. The said witness has further
admitted that as per the conditions stipulated in the
said agreement, the possession was not to be
handed over in any event, however, if the purchaser
failed to pay the remaining sale consideration, the
vendors were at liberty to file a suit for recovery of
the amount along with interest at the prevailing bank
rate. The learned Trial Court has only considered the
aspect that since the agreement to sell was an
unregistered document, the same was barred under
Section 17 of the Registration Act. At this stage, this
Court deems it appropriate to refer to Section 17 of
the Registration Act, which is reproduced
hereinbelow:
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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 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 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;
(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
(d) leases of immovable property from year to year, or
for any term exceeding one year, or reserving a yearly
rent;
[(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:]
Provided that the [State Government] may, by order
published in the [Official Gazette], exempt from the
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operation of this sub-section 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 sub-section (1)
applies to-
(i) any composition deed; or
(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
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(v) [any document other than the documents specified
in sub-section (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 subject-matter of the suit or proceeding]; or
(vii) any grant of immovable property by [Government];
or
(viii) any instrument of partition made by a Revenue-
Officer; 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 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
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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
Revenue-Officer.
[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.]
(3) Authorities to adopt a son, executed after the 1st
day of January, 1872, and not conferred by a will, shall
also be registered."
11.1.Undoubtedly, as per the aforesaid provision,
documents creating, declaring, assigning or
limiting any right, title or interest in immovable
property of the value of Rs.100/- and above are
required to be compulsorily registered. If such a
document is not registered, the same cannot be
received as evidence of any transaction affecting
such property or conferring such power. However,
the provision carves out certain exceptions. An
unregistered document may still be received in
evidence for limited purposes, namely: (i) as
evidence of a contract in a suit for specific
performance; (ii) as evidence of part performance
of a contract for the purposes of Section 53A of the
Transfer of Property Act, 1882; and (iii) as
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evidence of any collateral transaction not required
to be effected by a registered document. Thus, in
respect of these three categories, notwithstanding
the fact that a document required to be registered
has not been registered, the same may still be
received in evidence for the limited purposes
stated hereinabove. In the present case, the first
two categories would not apply, as the dispute is
neither with regard to a suit for specific
performance nor does it involve a claim of part
performance under Section 53A of the Transfer of
Property Act. The question that, therefore, arises
for consideration is whether the document in
question would fall under the third category so as
to be admissible in evidence for a collateral
purpose.
12. Whether the agreement to sell can be considered
for a collateral purpose. In order to determine the
aforesaid aspect, this Court has referred to Section
49 of the Registration Act, which is reproduced
hereinbelow:
"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-
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(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) 2, 3*** оr as
evidence of any collateral transaction not required to be
effected by registered instrument.]"
13. As per the aforesaid provision, the effect of non-
registration of an instrument which is compulsorily
required to be registered is that such instrument
does not affect any immovable property comprised
therein, nor can it be received in evidence of any
transaction affecting such property. Though the
instrument is not admissible for the purpose of
proving a concluded transaction transferring an
interest in immovable property, it can nevertheless
be received in evidence for a collateral purpose. A
collateral purpose is one other than that of creating,
declaring, assigning, limiting, or extinguishing a right
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in immovable property. A collateral transaction within
the meaning of the proviso to Section 49 means a
transaction other than the transaction affecting the
immovable property, but which is in some manner
connected with it. The collateral transaction must be
one which is not itself required to be effected by a
registered document. In other words, a collateral
transaction must be independent of, or divisible from,
the transaction which requires registration under the
law.
14. To determine the aforesaid aspect, this Court has
referred to the decision of the R. Hemalatha vs.
Kashthuri, reported in (2023) 10 SCC 725,
wherein the Supreme Court of India has held as
under:
25. At this stage, it is required to be noted that the
proviso to Section 49 came to be inserted vide Act 21
of 1929 and thereafter, Section 17(1-A) came to be
inserted by Act 48 of 2001 with effect from 24-9-2001
by which the documents containing contracts to transfer
for consideration any immovable property for the
purpose of Section 53-A of the Transfer of Property 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
they shall have no effect for the purposes of said
Section 53-A. So, the exception to the proviso to
Section 49 is provided under Section 17(1-A) of the
Registration Act. Otherwise, the proviso to Section 49
with respect to the documents other than referred to in
Section 17(1-A) shall be applicable.
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26.Under the circumstances, as per the proviso to
Section 49 of the Registration Act, an unregistered
document affecting immovable property and required by
the 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(1-
A) 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(1-A) of the Registration Act.
Therefore, in the facts and circumstances of the case,
the High Court has rightly observed and held relying
upon the 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
15. This Court has also considered the decision
rendered by the Apex Court in the case of Ameer
Minhaj v. Dierdre Elizabeth (Wright) Issar,
reported in (2018) 7 SCC 639 wherein the Apex
Court has held as under:
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
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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.
16. In the aforesaid background, in the opinion of this
Court, the present case squarely falls within the third
category mentioned hereinabove. Undisputedly,
possession cannot be claimed solely on the basis of
an unregistered document. However, in the present
case, the plaintiff herself has admitted during the
course of cross-examination that she had received an
amount towards the sale consideration, executed the
document below Exhibit 32, signed the same, and
handed over possession of the suit property in
pursuance thereof.
17. In such circumstances, the plaintiff cannot
subsequently claim rent or mesne profits merely on
the ground that the said document is unregistered.
The principle of estoppel would apply against such
conduct. The plaintiff herself, being the vendor, who
voluntarily executed the document and handed over
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possession of the suit property after receiving part of
the sale consideration, cannot thereafter be
permitted to take advantage of her own wrong by
contending that the document is unregistered. In that
view of the matter, the impugned judgment requires
partial interference.
18. Resultantly, the First Appeal is partly allowed. The
decree drawn by the learned Trial Court granting the
prayers contained in paragraphs 3, 5 and 6 of the
plaint, insofar as they relate to rent and mesne
profits, deserves to be set aside and the same is set
aside. The remaining part of the order shall remain
unaltered.
(M. K. THAKKER,J)
M.M.MIRZA
