Unregistered sale agreements admissible as evidence under Section 49 proviso despite Section 53A restrictions

SC allowed appeal in specific performance suit involving unregistered sale agreement. Court held unregistered agreements to sell immovable property can be received as evidence of oral agreement under proviso to Section 49 of 1908 Act, though inadmissible under Section 53A of 1882 Act for possession protection. Trial court correctly admitted documents as evidence while reserving determination of genuineness and validity for trial. HC erred in analyzing registered power of attorney through incorporation by reference principle. Trial court's order restored, directing determination of document validity on merits.

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Issues Involved:

1. Admissibility of unregistered agreements to sell as evidence.
2. Validity of the General Power of Attorney executed on insufficient stamp duty.
3. Applicability of Section 17(1A) of the Registration Act, 1908.
4. Effect of non-registration under Section 49 of the Registration Act, 1908.
5. The power of the court to impound insufficiently stamped instruments under the Indian Stamp Act, 1899.

Detailed Analysis:

1. Admissibility of Unregistered Agreements to Sell as Evidence:

The core issue addressed in the judgment was whether the suit agreement dated 9th July 2003, which was not registered, could be admitted as evidence in a suit for specific performance. The court clarified that under Section 49 of the Registration Act, 1908, an unregistered document can be received as evidence of a contract in a suit for specific performance. However, it cannot have any effect under Section 53A of the Transfer of Property Act, 1882, which pertains to part performance. The court relied on precedents like S. Kaladevi v. V.R. Somasundaram to establish that an unregistered sale deed could be used as evidence of an oral agreement of sale.

2. Validity of the General Power of Attorney Executed on Insufficient Stamp Duty:

The General Power of Attorney dated 2nd May 1996 was executed on a stamp paper of Rs. 100/-. The High Court had interpreted this document as being given for consideration, thereby requiring higher stamp duty applicable to a deed of conveyance. However, the Supreme Court opined that being a registered document, there is a legal presumption of it being duly stamped, which is rebuttable. The Trial Court had initially allowed the document to be marked as evidence, leaving the question of its sufficiency of stamp duty to be decided later based on further evidence.

3. Applicability of Section 17(1A) of the Registration Act, 1908:

The suit agreement of 9th July 2003, executed after the commencement of Section 17(1A) of the Registration Act, required compulsory registration. The High Court had erred in concluding that the agreement was inadmissible in evidence. The Supreme Court clarified that while the document could not have any effect under Section 53A of the Transfer of Property Act, it could still be received as evidence of a contract for specific performance under the proviso to Section 49 of the Registration Act.

4. Effect of Non-Registration under Section 49 of the Registration Act, 1908:

The Supreme Court reiterated that non-registration of a document required by Section 17 does not preclude its use as evidence of a contract in a suit for specific performance. The proviso to Section 49 allows for such documents to be admitted in evidence for limited purposes, such as proving an oral agreement of sale, but not for affecting immovable property or conferring any power.

5. The Power of the Court to Impound Insufficiently Stamped Instruments under the Indian Stamp Act, 1899:

The High Court had referenced Avinash Kumar Chauhan v. Vijay Krishna Mishra regarding the court's power to impound insufficiently stamped instruments. The Supreme Court noted that this issue should be considered by the Trial Court at the appropriate stage, as it had been left open for determination based on the evidence presented by the parties.

Conclusion:

The Supreme Court allowed the appeal, restoring the Trial Court's order dated 1st June 2016, which permitted the documents to be marked as evidence subject to proof and relevancy. The Trial Court was directed to decide all other issues concerning the validity, genuineness, and binding nature of the documents, including their compliance with the provisions of the Transfer of Property Act, 1882, and the Indian Stamp Act, 1899, on their own merits. The suit, pending since 2010, was directed to be disposed of expeditiously within six months.

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