Supreme Court allows appeal, admits unregistered sale deed as evidence in specific performance suit.

The Supreme Court allowed the appeal, set aside the orders of the High Court and the trial court, and directed the trial court to admit the unregistered sale deed dated 27.02.2006 as evidence. The Court emphasized that admitting the unregistered sale deed as evidence of a contract in a suit for specific performance does not contravene the provisions of the Registration Act, 1908, but rather aligns with the proviso to Section 49 of the Act. The parties were directed to bear their own costs.

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Issues Involved:
1. Admissibility of an unregistered sale deed in a suit for specific performance.
2. The applicability of Section 49 of the Registration Act, 1908.
3. The relationship between the Registration Act, 1908, and the Specific Relief Act, 1963.
4. The procedural requirements for registration refusal and subsequent remedies.

Issue-wise Detailed Analysis:

1. Admissibility of an Unregistered Sale Deed in a Suit for Specific Performance:
The core issue addressed was whether an unregistered sale deed could be admitted as evidence in a suit for specific performance. The plaintiff sought specific performance of an oral agreement dated 27.02.2006, claiming that the defendants had agreed to sell a property, received the full consideration, and handed over possession, but the sale deed could not be registered due to an attachment order. The trial court and High Court initially refused to admit the unregistered sale deed as evidence. However, the Supreme Court held that under the proviso to Section 49 of the Registration Act, 1908, an unregistered sale deed can be admitted as evidence of a contract in a suit for specific performance.

2. Applicability of Section 49 of the Registration Act, 1908:
Section 49 of the Registration Act, 1908, stipulates that an unregistered document required to be registered shall not affect any immovable property nor be received as evidence of any transaction affecting such property. However, the proviso allows such a document to be received as evidence of a contract in a suit for specific performance. The Supreme Court emphasized that the trial court erred in not admitting the unregistered sale deed dated 27.02.2006 in evidence, and the High Court should have corrected this error.

3. Relationship Between the Registration Act, 1908, and the Specific Relief Act, 1963:
The defendants argued that the Registration Act, 1908, being a complete code, should govern disputes regarding registration, and the Specific Relief Act, 1963, should not be invoked. They contended that the plaintiff should have sought an endorsement of "registration refused" and then applied under Section 73 of the Registration Act. However, the Supreme Court clarified that the Specific Relief Act and the Registration Act cover overlapping fields but do not supersede each other. A suit for specific performance is broader, encompassing not just the registration of a sale deed but also other reliefs like recovery of possession.

4. Procedural Requirements for Registration Refusal and Subsequent Remedies:
The defendants claimed that they refused to register the sale deed due to fraud by the plaintiff, who allegedly misrepresented the agreement for sale as a full-fledged sale deed. They argued that the plaintiff should have followed the procedure under Sections 71 to 77 of the Registration Act for registration refusal. The Supreme Court, however, noted that the issue before it was solely the admissibility of the unregistered sale deed in evidence. The Court held that the trial court should have admitted the unregistered sale deed as evidence of the contract, as per the proviso to Section 49 of the Registration Act.

Conclusion:
The Supreme Court allowed the appeal, set aside the orders of the High Court and the trial court, and directed the trial court to admit the unregistered sale deed dated 27.02.2006 as evidence. The Court emphasized that admitting the unregistered sale deed as evidence of a contract in a suit for specific performance does not contravene the provisions of the Registration Act, 1908, but rather aligns with the proviso to Section 49 of the Act. The parties were directed to bear their own costs.

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