IMPORTANT POINTS
Compromise decree comprising immovable property other than which is subject-matter of suit or proceeding requires registration, although any decree or order of a court is exempted from registration.

ORDER

The present petition under Article 227 of the Constitution of India has been filed by petitioners being aggrieved by the order dated 02.02.2019 passed by the Second Civil Judge, Class-I, Sabalgarh, District Morena whereby an application preferred by the respondent/plaintiff under Section 151, 152, 153 of the IPC for deleting Condition No.2 i.e. imposed for getting the compromise decree registered of its execution has been rejected.

2. The petitioners are further aggrieved by the order dated 31.01.2019 whereby the compromise application preferred by the parties under Order 23 Rule 3 of the IPC was allowed with certain conditions.

3. Shri N.K. Gupta - Senior Advocate alongwith Ms. Rashi Kushwah - Advocate for the petitioners, while placing reliance in the matters of Bhoop Singh vs. Ram Singh Major & Others reported in AIR 1996 SC 196 and Mukesh vs. State of M.P. & Another passed in Civil Appeal No.14808 of 2024 [Arising Out of SLP (C) No.4293 of 2021], decided on 20.12.2024, has argued before this Court that the legal position qua Clause (vi) of Section 17(2) of the Registration Act, 1908 has been settled and when a compromise decree is passed without any collusion, pertains to subject property in the suit and there exist pre-existing rights over the property and the said compromise decree doesn’t create any fresh rights in the property then it falls under the exception of Section 17(2)(vi) of the Act of 1908 and therefore, such compromise decree is not required to be registered, but ignoring the said legal provision, the learned Court below had put in said Condition No.2 which had made the compromise decree non-executable. It was, thus, submitted that the rejection of the application for deletion of Condition No.2 of compromise decree was per se illegal and therefore, while allowing the petition, the said Condition be directed to be deleted.

4. On the other hand, Shri Saurabh Bhelsewale - learned counsel appearing for the respondent has supported the case of the petitioner and has submitted that as per the dictums of the Hon’ble Apex Court in the matters as cited by the learned Senior Counsel, the compromise decree entered into between the parties is not required to be registered, therefore, the impugned order is per se illegal and it be quashed.

5. Heard counsel for the parties and perused the record.

6. The legal position qua Clause (vi) of Section 17(2) of the Act of 1908 which has been culled out by the Apex Court in the matter of Bhoop Singh vs. Ram Singh Major (supra) is summarised as under:

“(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, as was the position in the aforesaid Privy Council and this Court’s cases, it is apparent that the decree would not require registration.

(4) If the decree were not to embody the terms of compromise, as was the position in Lahore case, 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, because of the amendment of this clause by Act 21 of 1929, which has its origin in the aforesaid decision of the Privy Council, according to which the original clause would have been attracted, even if it were to encompass property not litigated.”

7. In the matter of Mukesh vs. State of M.P. (supra), after a detailed discussion in para 10 it was