High Court of Patna Rules on Unregistered Sale Agreement in Specific Performance Case

Background

In a significant ruling, the High Court of Judicature at Patna addressed the appeal in First Appeal No. 48 of 2016 , involving Smt. Reeta Devi and others as appellants against Smt. Nibha Devi . The case arose from a title suit concerning a sale agreement dated June 4, 2009, for a piece of land in Darbhanga. The appellants sought specific performance of the contract, while the respondent contended that the agreement was unregistered and thus inadmissible under the Registration Act.

Arguments

The appellants argued that they had made substantial investments in the property based on the agreement, including constructing a residential house and a godown. They claimed that the respondent had failed to execute the registered sale deed despite repeated requests. The appellants maintained that the trial court's rejection of their plaint was erroneous, as the unregistered agreement could still be considered as evidence for specific performance.

Conversely, the respondent's counsel asserted that the unregistered sale agreement was invalid under Section 17(1A) of the Registration Act, which mandates registration for contracts to transfer immovable property executed after September 24, 2001. The respondent argued that the agreement could not be used to support the claim for specific performance.

Court's Analysis and Reasoning

The court analyzed the legal principles surrounding the admissibility of unregistered documents in specific performance cases. It referenced several Supreme Court judgments, emphasizing that while an unregistered sale agreement cannot confer rights under Section 53A of the Transfer of Property Act, it can still be admitted as evidence of a contract in a suit for specific performance. The court noted that the trial court had erred in rejecting the plaint solely based on the non-registration of the agreement without considering the merits of the case.

Decision

The High Court allowed the appeal, set aside the trial court's judgment, and restored the suit. The court directed both parties to appear before the trial court on October 18, 2024, for further proceedings. This ruling underscores the importance of evaluating the merits of a case rather than dismissing it based solely on procedural technicalities regarding document registration.