Admissibility of Unregistered Agreement in Specific Performance Suit: A Legal Analysis of Minor Ravi Bharathi vs. P. Balasubramani

The Madras High Court in its ruling on 19th November 2014, in the case of Minor Ravi Bharathi vs. P. Balasubramani, has once again clarified the legal position regarding the admissibility of an unregistered agreement of sale in a suit for specific performance. Justice K. Ravichandrabaabu presided over the matter and delivered a detailed and reasoned judgment.

Background of the Case

The petitioner in the Civil Revision Petition (CRP) was the second defendant in O.S. No. 39 of 2006, filed before the Sub-Court, Dharapuram. The suit was instituted by the respondents/plaintiffs seeking specific performance of an unregistered agreement of sale dated 31.08.2005. The suit alleged that the plaintiffs paid a substantial advance of ₹1,00,000/- out of the total sale consideration of ₹1,10,000/-, and were put in possession of the suit property.

Subsequently, the first defendant allegedly executed a sham and nominal sale deed in favour of the second defendant (the petitioner herein) on 28.12.2005, leading to the current legal dispute.

Legal Issue

The second defendant/petitioner filed an application under Order 13 Rule 3 of CPC, seeking to discard the unregistered sale agreement from evidence. The contention was that since possession was delivered pursuant to the agreement, Section 53-A of the Transfer of Property Act and Section 17(1-A) of the Registration Act, 1908 necessitated registration. Without registration, the agreement was argued to be inadmissible.

Court’s Analysis

Justice K. Ravichandrabaabu examined whether an unregistered agreement of sale could be relied upon in a suit for specific performance, even if it referred to part performance.

The Court rejected the petitioner’s arguments, citing the proviso to Section 49 of the Registration Act, which explicitly states:

"An unregistered document affecting immovable property and required by this Act or the Transfer of Property Act to be registered may be received as evidence of a contract in a suit for specific performance…"

Supporting Precedents

The Court further referred to its earlier decision in R. Munusamy vs. G. Krishttapillai, reported in 2014 (7) MLJ 861, and the Supreme Court decision in Bondar Singh vs. Nihal Singh, AIR 2003 SC 1905. It reinforced the principle that even unregistered documents can be received in evidence in a suit for specific performance, provided they are not relied upon for claiming protection under Section 53-A.

Thus, the argument that the plaintiffs claimed possession under the agreement, thereby triggering Section 53-A, was not found to be sufficient to discard the agreement from evidence.

Conclusion

The Madras High Court upheld the trial court’s order and dismissed the Civil Revision Petition. This ruling serves as a significant precedent, reiterating that:

• In a suit for specific performance, an unregistered agreement of sale can be admitted in evidence.

• Section 49 of the Registration Act, along with its proviso, plays a crucial role in allowing such documents, despite their lack of registration.

• Section 53-A of the Transfer of Property Act applies only when a party seeks protection based on part performance, not merely when possession is referred to.

Implication

This decision is a guiding light for litigants and legal practitioners involved in property disputes, especially those concerning specific performance suits based on unregistered documents. It affirms that technical defects like non-registration do not automatically nullify contractual rights when the intent of the parties is clear and documented.

Minor Ravi Bharathi -Vs- P.Balasubramani & Another

Madras High Court

C.R.P.(PD).No.2870 of 2010

REPORTED : 2014 (3) MWN (Civil) 578