Kerala High Court
Shaju vs Victory Concrete Briks Pvt. Ltd on 25 June, 2025
Author: Sathish Ninan
Bench: Sathish Ninan
RFA Nos.593/2017 & 75/2019
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
&
THE HONOURABLE MR.JUSTICE P. KRISHNA KUMAR
WEDNESDAY, THE 25TH DAY OF JUNE 2025 / 4TH ASHADHA, 1947
RFA NO. 593 OF 2017 (J)
AGAINST THE JUDGMENT DATED 16.06.2017 IN OS NO.94 OF 2014
OF ADDITIONAL SUB COURT, IRINJALAKUDA
APPELLANT/1st DEFENDANT:
SHAJU
AGED 50 YEARS
S/O.NAREPARAMBAN VAREED,
MANNAMPETTA DESOM,
AMBALLOR VILLAGE, MUNKANDAPURAM TALUK.
BY ADVS.
SHRI.T.R.S.KUMAR
SMT.DEENA JOSEPH
SRI.K.V.SABU
SRI.SOBIN SOMAN
RESPONDENTS/PLAINTIFF / 2ND RESPONDENT:
1 VICTORY GRANITE BRICKS PVT. LTD,
PALACKAL DESOM, PALLISSERY VILLAGE,
THRISSUR TALUK,REPRESENTED BY
MANAGING DIRECTOR, SUNNY, AGED 53
YEARS,S/O.EDATTUKARAN MATHEW,
VARANDARAPILLY DESOM/VILLAGE,
CHALAKKUDY TALUK , PIN-680307.
2 K.P.SREEDHARAN
AGED 55 YEARS, S/O NARAYANAN EMPRATHIRI,
'NAVANEETHAM' VEETTIL,
RFA Nos.593/2017 & 75/2019
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NEAR AYURVEDA HOSPITAL,
VELLANGALLOOR DESOM,
VADAKKUMKARA VILLAGE,
MUKUNDAPURAM TALUK-680312
(POWER OF ATTORNEY HOLDER OF FIRST DEFENDANT)
BY ADV SRI.S.SUJITH FOR R1
ADV.SRI.T.M.CHANDRAN FOR R1
THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON
13.06.2025, ALONG WITH RFA.75/2019, THE COURT ON 25.06.2025
DELIVERED THE FOLLOWING:
RFA Nos.593/2017 & 75/2019
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
&
THE HONOURABLE MR.JUSTICE P. KRISHNA KUMAR
WEDNESDAY, THE 25TH DAY OF JUNE 2025 / 4TH ASHADHA, 1947
RFA NO. 75 OF 2019
AGAINST THE COUNTER CLAIM JUDGMENT AND DECREE IN
O.S.NO.94/2014 DATED 16.06.2017 OF ADDITIONAL SUB COURT,
IRINJALAKUDA
APPELLANT/COUNTER CLAIM PLAINTIFF NO.1:
SHAJU
AGED 50 YEARS
S/O.NAREPARAMBAN VAREED,
MANNAMPETTA DESOM ,
AMBALLUR VILLAGE,
MUNKUDAPURAM TALUK.
BY ADVS.
SHRI.T.R.S.KUMAR
SRI.K.V.SABU
SMT.DEENA JOSEPH
SMT.DEEPA R MENON
RESPONDENT/COUNTER CLAIM DEFENDANT/COUNTER CLAIM PLAINTIFF NO.2:
1 VICTORY CONCRETE BRIKS PVT. LTD.,
PALACKAL DESOM, PALLISSERY VILLAGE,
THRISSUR TALUK, REP.BY ITS MANAGING DIRECTOR,
SUNNY, AGED 53 YEARS,
S/O.EDATTUKARAN MATHEW ,
VARANDARAPILLY DESOM /VILLAGE,
CHALAKKUDY TALUK- 680 303.
RFA Nos.593/2017 & 75/2019
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2 K.P.SREEDHARAN,
AGED (55 YEARS), S/O.NARAYANAN EMPRATHIRI,
'NAVANEETHAM' NEAR AYURVEDIC HOSPITAL
VELLANGALLOOR DESOM ,VADAKKUMKARA VILLAGE,
MUKANDAPURAM TALUK- 680 662.
BY ADV SRI.S.SUJITH FOR R1
ADV.SRI.T.M.CHANDRAN FOR R1
THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON
13.06.2025, ALONG WITH RFA.593/2017, THE COURT ON 25.06.2025
DELIVERED THE FOLLOWING:
RFA Nos.593/2017 & 75/2019
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CR
SATHISH NINAN & P. KRISHNA KUMAR, JJ.
= = = = = = = = = = = = = = = = = =
R.F.A.Nos.593 of 2017 &
75 of 2019
= = = = = = = = = = = = = = = = = =
Dated this the 25th day of June, 2025
JUDGMENT
P.Krishna Kumar, J.
These appeals arise from a suit instituted by the
first respondent (hereinafter referred to as "the
plaintiff") seeking specific performance of an agreement for
the sale of immovable property. The trial court decreed the
suit in favour of the plaintiff and dismissed the
counterclaim raised by the appellant, who was the first
defendant in the original suit (hereinafter referred to as
"the defendant"). The defendant now challenges the said
decree in these appeals.
2. As per the agreement dated 20.01.2014, the defendant
agreed to sell 1.26 acres of land owned by him to the
plaintiff at the rate of Rs.9,000/- per cent, within a
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period of three months. The plaintiff contended that an
amount of Rs.11.37 lakhs was paid as advance sale
consideration to the defendant's Power of Attorney holder.
Subsequently, the plaintiff paid the entire sale
consideration through three cheques to the said Power of
Attorney holder. Expecting that the defendant would execute
the sale deed as agreed, the plaintiff purchased stamp paper
worth Rs.1.8 lakhs on 19.04.2014. The plaintiff was
compelled to institute the suit since the defendant failed
to execute the sale deed.
3. According to the plaintiff, the agreement for sale
was part of a broader compromise arrangement involving
certain other parties, aimed at resolving long standing
disputes between them with the defendant's brother, a
multimillionaire. The agreement was also signed by the Power
of Attorney holder of the defendant, on behalf of the
defendant. Pursuant to this compromise, the plaintiff and
certain other individuals had already transferred their
respective properties to the intended parties. The
defendant, however, failed to act in accordance with the
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agreement, it is alleged.
4. The defendant denied being a party to the
aforementioned compromise and challenged the validity and
enforceability of the sale agreement, asserting that it was
unregistered and, therefore, not legally binding. He further
alleged that the actual agreed sale price was Rs.61,000/-
per cent, but in the agreement, the plaintiff falsely
recorded it as Rs.9,000/- per cent, contrary to the real
understanding between the parties. The defendant also
alleged that the plaintiff had trespassed upon the land in
question prior to the expiry of the agreement period and had
altered its physical features by levelling the terrain. On
these grounds, he raised a counterclaim seeking recovery of
possession.
5. Upon consideration of the oral and documentary
evidence, the trial court found that the sale agreement
(Ext.A2) had indeed been executed between the plaintiff and
the defendant, and that the plaintiff had paid the entire
consideration. Accordingly, the suit was decreed in favour
of the plaintiff. Consequently, the counterclaim was
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dismissed.
6. We have heard Sri.T.R.S.Kumar, the learned counsel
appearing for the defendant/appellant and Sri.T.M.Chandran,
the learned counsel appearing for the plaintiff/first
respondent.
7. The principal contention advanced by the learned
counsel for the defendant is that the decree for specific
performance ought not to have been granted by the trial
court, as the agreement for sale was unregistered. According
to him, pursuant to the amendment introduced by the State
Legislature to Section 17(1) of the Registration Act
(hereinafter referred to as "the Act"), all contracts for
sale are mandatorily required to be registered, with effect
from 13.09.2013. The learned counsel further contended that,
although Section 49 of the Act permits an unregistered
document to be received as evidence of a contract in a suit
for specific performance, such admissibility is confined to
granting a decree for the refund of earnest money or advance
sale consideration. According to him, permitting specific
performance on the basis of an unregistered agreement would
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defeat the very object of the statutory amendment.
8. In response, the learned counsel for the plaintiff
submitted that the proviso to Section 49 of the Act
expressly exempts suits for specific performance from the
general prohibition set out in the main clause of the
section. Therefore, an unregistered agreement for sale may
still be relied upon for the purpose of seeking specific
performance, it is contented.
9. Section 17(1) of the Act has been amended by the
State of Kerala by introducing the Registration (Kerala
Amendment) Act, 2012 ('the Amendment Act', for short) on
13/09/2013, with Presidential assent. As per Section 2 of
the Amendment Act a new clause is inserted as Section 17(1)
(f) in the Registration Act. Relevant part of Section 17(1)
thus reads as follows:
"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 (20 of
1866), or the Indian Registration Act, 1871 (7 of
1871) or the Indian Registration Act, 1877 (3 of
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1877), or this Act came or comes into force, namely:-
(a) xxxxx
(f) "Instruments purporting or operating to effect a
contract for the sale of immovable property of the
value of one hundred rupees and upwards.
xxxxxx
The Amendment Act further deleted the explanation provided
at the end of Section 17(2). The explanation reads thus:
"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."
At the outset, we have no hesitation in accepting the
contention advanced by the learned counsel for the defendant
that, pursuant to the aforesaid amendment, an agreement for
sale is compulsorily registrable in the State of Kerala by
virtue of the provisions contained in Section 17(1) of the
Registration Act. The legal consequence of non-registration
of a document that is required to be registered under
Section 17 is expressly addressed in Section 49 of the Act,
which reads as follows:
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"Effect of non-registration of documents required to
be registered.-
No document required by section 17 or by any provision
of the Transfer of Property Act, 1882 (4 of 1882) to
be registered shall--
(a) affect any immovable property comprised therein,
or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction
affecting such property or conferring such power,
unless it has been registered:
Provided that an unregistered document affecting
immovable property and required by this Act or the
Transfer of Property Act, 1882 (4 of 1882), to be
registered may be received as evidence of a contract
in a suit for specific performance under Chapter II of
the Specific Relief Act, 1877 (3 of 1877) or as
evidence of any collateral transaction not required to
be effected by registered instrument."
(Emphasis added)
As per Section 49, an unregistered document that is
compulsorily registrable under Section 17 shall neither
affect any immovable property referred to therein nor be
received as evidence of any transaction affecting such
property. Nevertheless, the section carves out specific
exceptions to this general rule. Notably, an unregistered
document affecting immovable property may still be admitted
in evidence: (a) as evidence of a contract in a suit for
specific performance, and (b) for the purpose of proving any
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collateral transaction not required to be effected by a
registered instrument. It is evident from the Amendment Act
that the legislature, in its wisdom, chose not to amend
Section 49, even as it introduced clause (f) to Section
17(1) of the Act. By retaining the proviso to Section 49,
the legislature presumably intended to preserve the
exceptions it contains--particularly, the admissibility of
unregistered documents in suits for specific performance.
Consequently, the legal effect of the proviso remains intact
and is not diluted by the amendment.
10. Therefore, we are unable to accept the contention
raised by the learned counsel for the defendant. There is
nothing in the newly introduced provisions or in Section 49
that supports the proposition that an unregistered document
can be used in a suit for specific performance only for the
limited purpose of claiming alternate relief, such as a
refund of the payment made towards the purchase price or
earnest money.
11. We are fortified in our view by the law laid down by
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the Hon'ble Supreme Court in R. Hemalatha v. Kasthuri (AIR
2023 SC 1895). In that case, the Court considered the impact
of an amendment introduced by the State of Tamil Nadu to
Section 17(1) of the Registration Act. By the Tamil Nadu
Amendment Act 29 of 2012, a new clause was inserted into
Section 17(1), making it mandatory to register all
instruments or agreements relating to the sale of immovable
property valued at one hundred rupees or more. Tamil Nadu
also omitted the Explanation after Section 17 (2).
12. Notably, Section 49 of the Registration Act remained
unamended in Tamil Nadu. While the trial court had ruled in
favour of the defendant, holding that an unregistered
agreement executed after the amendment was inadmissible in
evidence, it was contended before the Supreme Court that, in
view of Section 49(1)(c) read with the newly inserted clause
(g) in Section 17(1), such an agreement could not be
admitted in evidence to prove a transaction involving
immovable property.
13. However, the Hon'ble Supreme Court, after examining
the proviso to Section 49, held that despite the insertion
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of clause (g) in Section 17(1) and the omission of the
Explanation, no corresponding amendment had been made to
Section 49. It was further observed that the Explanation to
Section 17(2) had also been omitted by the State of Tamil
Nadu. The Court took note of the primary object and intent
behind the 2012 Amendment and ultimately concluded that an
agreement for sale remains admissible in evidence in a suit
for specific performance, by virtue of the proviso to
Section 49 of the Act. The relevant portion of the judgment
is reproduced below:
"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 sub-section (2) of
Section 17 has been omitted, there is no
corresponding amendment made to Section 49 of the
Registration Act. Section 49 of the Registration Act.
x x x x x x
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 property
etc. on white paper or on stamp paper of nominal
value.
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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.
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
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
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exception to the first part of Section 49."
14. Though the learned counsel for the defendant placed
reliance on a host of decisions rendered by this Court and
the Hon'ble Supreme Court concerning the effect of non-
registration of documents that are compulsorily registrable,
we find those decisions inapplicable to the present case, as
none of them addresses the interplay between Section 17(1)
(f) and Section 49 of the Registration Act.
15. However, relying on Ignatious v. Dominic [2017 (3)
KHC 836], the learned counsel for the defendant further
contended that the expression "as evidence" in Section 49
ought not to be construed as synonymous with "in evidence,"
and therefore, the agreement in question should not have
been admitted in evidence.
16. We find no merit in the above submission,
particularly in light of the law laid down by the Hon'ble
Supreme Court in Hemalatha's case (supra). Moreover, the
observations made by this Court in Ignatious's case (supra)
arose in an entirely different context--namely, whether a
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document required to be registered under Section 17(1A) of
the Act could be acted upon in a suit for specific
performance of a contract. That decision, therefore, has no
bearing on the present issue.
17. The next point for consideration is whether the
trial court was justified in granting a decree for specific
performance. In all fairness, the learned counsel for the
defendant did not dispute the execution of the agreement or
the payment of the full sale consideration. There is no
dispute regarding the genuineness of Ext.A2 agreement, as
already noted. The only contention raised by the defendant
before the trial court was in respect of the sale price
mentioned in the document. While the agreement signed by him
stipulated a sale price of Rs.9,000/- per cent, his claim
was that the actual agreed amount was Rs.61,000/- per cent.
However, despite admitting the execution of the agreement
and receipt of the advance sale consideration, the defendant
did not step into the witness box nor adduce any other
evidence in support of his contention. He did not even
choose to reply to the notice sent by the plaintiff.
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18. On the other hand, the documents produced by the
plaintiff clearly establish that the fair value of the land
in question was less than Rs.9,000/- per cent, at that time.
It also emerged in evidence that there existed an agreement
among certain other individuals who were parties to various
litigations then pending before the court, one of whom was
the defendant's brother. The compromise agreement was signed
by the Power of Attorney holder of the defendant. Although
the defendant did not personally sign that agreement, he was
a party to one of the said cases, which was subsequently
withdrawn as part of the compromise arrangement.
19. It is also undisputed that the plaintiff had already
transferred his land in furtherance of the said agreement,
with the legitimate expectation that the defendant would
execute a sale deed in respect of the plaint schedule
property. These facts clearly point to the conclusion that
failure to specifically enforce the contract would result in
undue hardship and substantial loss to the plaintiff.
20. Upon a comprehensive evaluation of the entire
evidence on record, we find no reason to interfere with the
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trial court's decree for specific performance, which is
fully justified. Accordingly, we are of the view that the
judgment and decree impugned in the appeals are liable to be
upheld. The dismissal of the counterclaim by the trial court
is also found to be proper and calls for no interference.
In the result, the appeals are dismissed.
Sd/-
SATHISH NINAN
JUDGE
Sd/-
P. KRISHNA KUMAR
JUDGE
sv
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PETITIONER ANNEXURES
Annexure A1 TRUE COPY OF FIR NO. 696/2015 OF INFORPARK
POLICE STATION
Annexure A2 TRUE COPY OF RELEVANT PAGE OF FAIR VALUE
REGISTER, REGISTRATION DEPARTMENT, KERALA
Annexure A3 TRUE COPY OF RELEVANT FAIR VALUE REGISTER
