The Punjab and Haryana High Court, in Second Appeal held that an unregistered Agreement to Sell an immovable property where there is no immediate delivery of possession can be read in evidence in a suit for specific performance of the Agreement to Sell.

Facts:-

1. The Plaintiff and the Defendant had entered into an Agreement to Sell in respect of an immovable property for a total consideration of Rs.20,00,000/-. As per the Agreement to Sell, the Plaintiff had paid earnest money of Rs.2,50,000/-. A Sale Deed was to be executed and registered simultaneously on payment of the balance consideration. The target date for execution and registration of the Sale Deed was also decided by the parties.
2. The Plaintiff had shown readiness and willingness to perform his part of the obligations for payment of balance consideration and had also attended the office of the Registrar of Assurances on the decided date for execution of the sale deed. The Defendant however committed a breach of the Agreement to Sell and disputed the agreement and his obligations thereunder. The Defendant had taken a stand that the earnest money paid to him by the Plaintiff was in fact a loan advanced to him and there was no agreement between them for the sale of an immovable property.
3. The trial court decreed the suit for specific performance of the Agreement to Sell on being satisfied that the Plaintiff was ready and willing to perform his part of the obligations under the contract. The appellate court upheld the judgement of the trial court.
4. The Defendant therefore filed a second appeal before the Punjab and Haryana High Court.

Before the Punjab and Haryana High Court, it was argued on behalf of the original Defendant that in view of the amendment in Section 17 of the Registration Act, 1908 the said Agreement to Sell was required to be registered before it could be considered in evidence in the suit filed by the Plaintiff for its specific performance.

On behalf of the original Plaintiff, it was argued that the amendment in Section 17 of the Registration Act was applicable only if a person intends to protect his possession as per Section 53-A of the Transfer of Property Act, 1882.

Section 17 (1-A) of the Registration Act, 1908 reads thus:-

"The documents containing contracts to transfer for consideration, any immoveable property for the purpose of Section 53-A on the Transfer of Property Act, 1882 (4 of 1882), shall be registered if they have been executed on or after the commencement of the Registration and Other Related Laws (Amendment) Act, 2001 and, if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of Section 53-A."

On appreciation of the provisions of section 17 (1-A) of the Registration Act, 1908, the Punjab and Haryana High Court held that it is apparent that the amendment is only for the purpose of Section 53 (1-A) of the Transfer of Property Act, 1882. Further still, in the present case there was no delivery of possession at the time of entering into the Agreement to Sell. Hence, the Agreement to Sell was not required to be registered. The second appeal was accordingly dismissed¹.

By - Chaitanyaa Bhandarkar