The respondent, as plaintiff, instituted O.S.67/2013 against the petitioner/defendant, in the Court of Civil Judge, Muddebihal. Suit is founded on an Agreement of Sale dated 09.02.1998 with the prayer to pass a decree of specific performance of contract and for directing the defendant to execute sale deed of the suit property. By filing written statement suit has been contested. I.A.No.2 was filed by the defendant, under Ss. 17(1A) and 49 of the Registration Act, 1908 (‘Act’ for short) read with Section 151 CPC, to dismiss the suit as not maintainable on the ground that suit document being compulsorily registrable, has not been registered. Trial Judge having rejected the application by reason of an Order dated 24.08.2016, this petition was filed.

2. Trial Judge having found that the suit has been instituted to pass a decree of specific performance of the contract on the basis of an Agreement of Sale dated 09.02.1998, which is only a contract between the parties and there is no transfer of any right, title or interest has held that the instrument on which the suit is founded is not a compulsorily registrable one.

3. Sri Bapugouda Siddappa, learned advocate, contended that there is improper consideration of I.A.2 and the rejection is arbitrary. He submitted that the instrument based on which the suit was instituted being an unregistered one, in view of Ss.17(1A) and 49 of the Act, suit is not maintainable and hence, the impugned order is liable to be set aside.

4. Copy of the instrument dated 09.02.1998 on which the suit is founded is at Annexure – A. Suit was instituted on 26.02.2013 to pass a decree of specific performance of the contract. Written statement having been filed, issues have been raised. I.A.No.2 was filed to dismiss the suit as not maintainable on the ground that Annexure -A being not registered the bar under Ss. 17(1A) and 49 of the Act is attracted.

5. Undisputedly, the instrument on which suit is founded is merely an agreement of sale and does not contain any recital that it is a sale. S. 49 of the Act mandates that any document required to be registered by S. 17 or by any provision of the Transfer of Property Act, 1882, shall not affect any immovable property comprised therein, or be not received as an evidence of any transaction affecting the property or conferring such power, unless it has been registered. But the proviso appended to it being relevant is extracted hereinbelow:-

“Provided that an unregistered document affecting immovable property and required by the Registration Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as an evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (3 of 1877) or as evidence of any collateral transaction not required to be effected by registered document.”

(underlining is mine)

6. The proviso was inserted in the Section by the Transfer of Property (Amendment) Supplementary Act, 1929. Proviso makes clear that an unregistered document affecting an immovable property may be put in evidence in a suit for specific performance. If the document is put in evidence and embodies the contract between the parties, it is sufficient to support the claim.

7. Section 54 of the Transfer of Property Act, 1882 specifically provides that an agreement for sale by itself does not create any interest in or charge on the property agreed to be sold. An Agreement of Sale cannot be treated as a conveyance for the purpose of the Registration Act, 1908. An Agreement of Sale is compulsorily registrable document under clause (b) to sub-Section (1) of Section 17 of the Registration Act, 1908 if the instrument operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property.

8. Section 17(1A) of the Act requires an agreement of sale to be compulso