Unregistered agreement to sell may still support specific performance and be used as evidence despite registration limits.

An unregistered agreement to sell that contains a clause of part performance by delivery of possession, or is executed in favour of a person already in possession, remains admissible in evidence for a suit for specific performance. Section 17(1A) of the Registration Act, 1908 makes such contracts compulsorily registrable only for the limited purpose of Section 53A of the Transfer of Property Act, and denies them effect for that purpose if unregistered. It does not bar their use in specific performance proceedings. The proviso to Section 49 expressly preserves an unregistered document as evidence of the contract and of part performance.

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Issues: Whether an unregistered agreement to sell, containing a clause of part performance by delivery of possession or executed in favour of a person already in possession, can be received in evidence and form the basis of a suit for specific performance despite Section 17(1A) and Section 49 of the Registration Act, 1908.

Analysis: A contract answering the requirements of Section 53A of the Transfer of Property Act, 1882 was, prior to the 2001 amendment, not compulsorily registrable. Section 17(1A) of the Registration Act, 1908 made such contracts compulsorily registrable for the purpose of Section 53A and deprived an unregistered document of effect for that limited purpose. However, Section 17(1A) did not prohibit the filing of a suit for specific performance or the reception of such a document in evidence. The proviso to Section 49 of the Registration Act, 1908 specifically preserves the use of an unregistered document as evidence of a contract in a suit for specific performance and as evidence of part performance.

Conclusion: An unregistered agreement to sell containing part performance by possession, or executed in favour of a person already in possession, is not barred from being used as the basis of a suit for specific performance and is admissible in evidence for that purpose.

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