A compromise decree that creates a right, title, or interest in immovable property for the first time requires registration under Section 17(2) of the Registration Act.

Swatanter Kumar, J. - The controversy relating to the applicability of provisions of Section 17(2) of the Registration Act (16 of 1908) has been settled by the Honble Supreme Court of India in a very recent case of Bhoop Singh v. Ram Singh Major and others reported as, AIR 1996 Supreme Court 196. While elaborating the provisions governing the mandatory registration of decrees, settlement or orders their Lordships enumerated the law as follows :-

The legal position qua Clause (vi) of Section 17(2) can be summarised as below :-

(1) Compromise decree if bona fide, in the sense that the compromise is not a device to obviate payment of stamp duty and frustrate the law relating to registration would not require registration. In a converse situation, it would require registration.

(2) If the compromise decree were to create for the first time right, title or interest in immovable property of the value of Rs. 100/- or upwards in favour of any party to the suit, the decree or order would require registration.

(3) If the decree were not to attract any of the clauses of sub-section (1) of Section 17, it is apparent that the decree would not require registration.

(4) If the decree were not to embody the terms of compromise, benefit from the terms of compromise cannot be derived, even if a suit were to be disposed of because of the compromise in question.

(5) If the property dealt with by the decree be not the subject matter of the suit or proceeding Clause (vi) of sub-section (2) would not operate.

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Any other view would find the mischief of avoidance of registration, which requires payment of stamp duty, embedded in the decree or order. The Court should therefore examine in each case whether the parties have pre-existing right to the immovable property, or whether under the order or decree of the Court one party having right, title or interest therein agreed or suffered to extinguish the same and created right, title or interest in praesenti in immovable property of the value of Rs. 100/- or upwards in favour of other party for the first time, either by compromise or pretended consent. If latter be the position the document is compulsorily registrable.

Applicability of this judgment to the facts of the present case is the precise question that falls for determination in this Regular Second Appeal before this court.

2. The facts necessary for such determination are that one Sadhu was owner of House No. 560 in village Beh Dulo, Tehsil Dasuya and land measuring 6 Kanal 17 Marla Khasra No. 238 in the same village. He was unmarried and died issueless. Sadhu is stated to have executed registered Will dated 2.8.1976 in favour of one Shri Bishamber defendant No. 1 in the suit. Bishamber also died during the pendency of the suit and his legal representatives Hans Raj etc. were brought on record. The plaintiff in the suit claimed that he was intending to file a suit to challenge the validity of this will in favour of the predecessor-in-interest of the defendant but in the meanwhile the matter was got compromised by the village respectables and a family settlement was effected and written between the parties. According to this family settlement the suit land and the house in dispute were given to the plaintiff as owner. Remaining land of Sadhu deceased was given to defendants Nos. 1 and 2 in equal shares. The plaintiff further claimed that he continued in possession of the suit land as well as the house since death of Sadhu and entries in the revenue record were made with regard to the factum of his possession. The suit was contested by the defendant who pleaded that the suit was barred by limitation. The plaintiff has no locus standi to file the suit. The alleged ownership and possession of the plaintiff was denied. The defendants submitted that under the will they were entitled to the aforesaid property from Bishamber being his natural heirs as he had become the absolute owner of this property and mutation in revenue record