Agreement to Sale: Compulsory Registration Requirements

Overview

The question of whether an agreement to sell requires compulsory registration under the Indian Registration Act, 1908, has been addressed in various legal precedents. The key provisions of the Act and relevant case law provide clarity on this matter.

Key Legal Provisions

1. Registration Act, 1908:
2. Section 17(1)(b): Documents that require compulsory registration include deeds of sale of immovable property valued at more than Rs. 100.
3. Section 17(1A): Specifically states that contracts executed in part performance of an agreement must be registered if they are to be enforceable under Section 53A of the Transfer of Property Act, 1882.

4. Section 49: Non-registration of a document that requires registration means it cannot affect any immovable property or be received as evidence of any transaction affecting such property unless it is registered.

5. Transfer of Property Act, 1882:

6. Section 53A: Provides protection to a person in possession under an unregistered agreement to sell, allowing them to seek specific performance.

Relevant Case Law

• Unregistered Sale Agreements:
• Courts have held that an unregistered sale agreement can be admissible for proving possession and specific performance, as it does not confer any right, title, or interest over the property itself Kumarasamy VS P. Subramaniyam - Madras.

• The non-registration of an agreement does not bar the contract from being enforced, particularly when possession has been delivered C. Ramya VS C. Ganambal - MadrasPradip Paul VS Ila Saha - Tripura.

• Compulsory Registration:

• The amendment to the Registration Act in 2001 made registration of agreements to sell compulsory, but this is not retroactive. Agreements executed before this amendment do not require registration UMA BHARDWAJ VS RANI DEVI - Uttarakhand.
• In cases where the value of the property exceeds Rs. 100, compulsory registration is essential for the agreement to be enforceable Bal Krishan Sharma VS Mdc Estate Private Limited - Himachal PradeshBal Krishan Sharma VS Mdc Estate Private Limited - Himachal Pradesh.

Summary of Findings

• Compulsory Registration:
• An agreement to sell immovable property valued over Rs. 100 must be registered to be enforceable. This is particularly relevant for agreements executed after the 2001 amendment to the Registration Act.

• For agreements executed prior to the amendment, the requirement for registration does not apply.

• Enforceability of Unregistered Agreements:

• Unregistered agreements can still be used to prove possession and may support claims for specific performance, especially if the party is in possession of the property Kumarasamy VS P. Subramaniyam - MadrasC. Ramya VS C. Ganambal - Madras.

Recommendations

• For Current Agreements: Ensure that any agreement to sell immovable property exceeding Rs. 100 is registered to avoid issues of enforceability.
• For Existing Unregistered Agreements: If possession has been delivered, consider pursuing specific performance based on the unregistered agreement, as courts may allow this under the provisions of the Transfer of Property Act.

In conclusion, while compulsory registration is required for agreements to sell immovable property valued over Rs. 100, unregistered agreements can still be leveraged in specific performance claims if possession has been transferred..