The Registration Trap: Sections 52-53 TPA and 17-49 Registration Act in Judicial Practice

Introduction

Three statutes converge every working morning on the table of a civil judge: the Transfer of Property Act, 1882, the Registration Act, 1908, and the Maharashtra Stamp Act, 1958. They converge at a single, deceptively ordinary moment — when an advocate says, "I tender this document, Your Honour." What the presiding officer does in the next ninety seconds decides whether the record is sound or fatally compromised; and it is the District Judge, sitting in first appeal under Section 96 of the Code of Civil Procedure, 1908, who inherits the consequences.

Three propositions frame everything that follows.

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Supreme Court: An unregistered agreement of sale may be admitted in evidence in a suit for specific performance of contract as per S 49 of Registration Act

The main provision in Section 49 provides that any document which is required to be registered, if not registered, shall not affect any immovable property comprised therein nor such document shall be received as evidence of any transaction affecting such property. The proviso, however, would show that an unregistered document affecting immovable property and required by the 1908 Act or the Transfer of Property Act, 1882 to be registered may be received as an evidence to the contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by registered instrument. By virtue of the proviso, therefore, an unregistered sale deed of an immovable property of the value of Rs. 100 and more could be admitted in evidence as evidence of a contract in a suit for specific performance of the contract. Such an unregistered sale deed can also be admitted in evidence as an evidence of any collateral transaction not required to be effected by registered document. When an unregistered sale deed is tendered in evidence, not as evidence of a completed sale, but as proof of an oral agreement of sale, the deed can be received in evidence making an endorsement that it is received only as evidence of an oral agreement of sale under the proviso to Section 49 of 1908 Act. {Para 12}

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 6543 of 2025 

Decided On: 08.05.2025

Muruganandam Vs. Muniyandi (Died) through L.Rs.

Hon'ble Judges/Coram:

Pamidighantam Sri Narasimha and Joymalya Bagchi, JJ.

Citation: 2025 SCC OnLine SC 1067,2025 INSC 652,MANU/SC/0652/2025.

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Supreme Court Clarifies Law on Unregistered Lease Agreements

 Analysis of K.B. Saha & Sons Pvt. Ltd v. Development Consultant Ltd (2008) 8 SCC 654

Introduction

The Supreme Court’s decision in K.B. Saha & Sons Pvt. Ltd v. Development Consultant Ltd (2008) 8 SCC 654 stands as a landmark judgment on the admissibility and legal effect of unregistered lease agreements in India. This case is frequently cited for its authoritative interpretation of Section 49 of the Registration Act, 1908, and its impact on landlord-tenant disputes, especially regarding the use of lease agreements that have not been registered as required by law.

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Whether unregistered document will be admissible in evidence for collateral purpose?

 Yes, unregistered documents are admissible in evidence for collateral purposes under the proviso to Section 49 of the Registration Act. While the general rule prohibits the admission of unregistered documents that are required to be registered, the law recognizes a specific exception for collateral purposes.

Legal Framework for Collateral Purpose

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Important provisions of Registration Act 1908

17. Documents of which registration is compulsory.—

(a) instruments of gift of immovable property;

(b) other non-testamentary instruments which purport or operate 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;

(c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and

(d) lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;

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Whether oral evidence can be given in respect of unregistered exchange deed?

 It is clear from the above judgment that the best evidence of the contents of the document is the document itself and as required Under Section 91 of the Evidence Act the document itself has to be produced to prove its contents. But having regard to Section 49 of the Registration Act, any document which is not registered as required under law, would be inadmissible in evidence and cannot, therefore, be produced and proved Under Section 91 of the Evidence Act. Since Exhibit P2 is an unregistered document, it is inadmissible in evidence and as such it can neither be proved Under Section 91 of the Evidence Act nor any oral evidence can be given to prove its contents. Therefore, the High Court has rightly discarded the exchange deed at Exhibit P2.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 5415 of 2011

Decided On: 02.07.2018

Shyam Narayan Prasad Vs. Krishna Prasad and Ors.

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Whether title in immovable property can be transferred on basis of unregistered exchange deed?

 This takes us to the next question as to whether the exchange deed at Exhibit P2 is admissible in evidence or not. The transfer of ownership of their respective properties by Defendant Nos. 1 and 2 was done through Exhibit P2 deed of exchange. It was contended by Defendant No. 1 that the exchange was only of the businesses. However, a careful perusal of Exhibit P2 clearly shows that the RCC building is also a subject matter of the deed of exchange. The value of RCC building exceeds Rs. 100/- which is not in dispute. Section 118 of the TP Act defines 'exchange' as under:

118. "Exchange" defined.-When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things being money only, the transaction is called an "exchange".

A transfer of property in completion of an exchange can be made only in manner provided for the transfer of such property by sale.

18. It is clear from this provision that where either of the properties in exchange are immovable or one of them is immovable and the value of anyone is Rs. 100/- or more, the provision of Section 54 of the TP Act relating to sale of immovable property would apply. The mode of transfer in case of exchange is the same as in the case of sale. It is thus clear that in the case of exchange of property of value of Rs. 100/- and above, it can be made only by a registered instrument. In the instant case, the exchange deed at Exhibit P2 has not been registered.

19. Section 49 of the Registration Act, 1908 provides for the effect of non-registration of the document which is as under:

49. Effect of non-registration of documents required to be registered.-No document required by Section 17 {or by any provision of the Transfer of Property Act, 1882 (4 of 1882)}, to be registered shall-

(a) affect any immovable property comprised therein, or

(b) confer any power to adopt, or

(c) Be received as evidence of any transaction affecting such property or conferring such power,

Unless it has been registered:

20. Section 17(i)(b) of the Registration Act mandates that any document which has the effect of creating and taking away the rights in respect of an immovable property must be registered and Section 49 of the Registration Act imposes bar on the admissibility of an unregistered document and deals with the documents that are required to be registered Under Section 17 of the Registration Act. Since, the deed of exchange has the effect of creating and taking away the rights in respect of an immovable property, namely, RCC building, it requires registration Under Section 17. Since the deed of exchange has not been registered, it cannot be taken into account to the extent of the transfer of an immovable property.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 5415 of 2011

Decided On: 02.07.2018

Shyam Narayan Prasad Vs. Krishna Prasad and Ors.

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Whether document which is not duly stamped can be used for collateral purpose?

Having regard to Section 35 of Stamp Act, unless the stamp duty
and penalty due in respect of the instrument is paid, the court cannot act
upon the instrument, which means that it cannot act upon the arbitration
agreement also which is part of the instrument. Section 35 of Stamp Act is
distinct and different from Section 49 of Registration Act in regard to an
unregistered document. Section 35 of Stamp Act, does not contain a
proviso like to Section 49 of Registration Act enabling the instrument to
be used to establish a collateral transaction.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
ARBITRATION APPEAL NO. 45 OF 2013
ALONGWITH
CIVIL APPLICATION NO. 41 OF 2013
IN
ARBITRATION APPEAL NO.45 OF 2013
DISTRICT : THANE

Shri Jayraj Devidas, Vs  Shri Nilesh Shantilal Tank, 

CORAM : R.D. DHANUKA, J.

PRONOUNCED ON : 22nd AUGUST, 2014
Citation;2014(6) MHLJ 156

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Whether a party can claim specific performance of unregistered lease agreement?

The proviso to Section 49 of the Registration Act shows that such unregistered document can be used for getting specific performance of contract which is possible under Chapter II of the Specific Registration Act. It also shows that the document can also be used for the purpose of Section 53A of the T.P. Act, as amendment deleting this portion was made in the year 2001. The proviso further shows that the document can be used for collateral purpose in evidence.

28. So far as right to get specific performance as mentioned in the proviso is concerned, it can be said that the present transaction of lease does not fall under Chapter II of the Specific Relief Act. By the present transaction, the demise in the property was created and under section 107 of the T.P. Act it was compulsory to register the document. In view of provision of Section 107 of the T.P. Act the transaction itself was invalid. So, in the present case there was no question of specific performance of contract under Chapter II of the Specific Relief Act. In any case, no such relief was claimed by the defendant under the aforesaid document.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
First Appeal No.1214 of 2003


The Osmanabad Janata Sahakari Bank Ltd. Vs Chandresena w/o Pandharinath Gunale,

CORAM: T.V. NALAWADE, J.

 Citation: 2014(6)ALLMR250, 2014(5)BomCR9

Judgment delivered on : 1st August 2014.

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Whether unregistered lease deed can be looked into for ascertaining commencement of possession, rate of rent?

The same view has been expressed by the Supreme Court in the case of Satish Chand Makhan v. Govardhan Das Vyas, in the following terms, "The unregistered deed of lease cannot also be taken into consideration on the ground that such deed can be admitted for collateral purpose, invoking proviso to S. 49 of the Registration Act, as terms of lease are not for collateral purpose within its meaning". We may also refer to an earlier decision of this Court in the case of Indramoni Dasi v. Snehalata Dutta, reported in (1955) 59 Cal WN 1150, wherein it was held that an unregistered lease being inoperative, the express contractual lease did not take effect in law. It therefore follows from the observations quoted above that the plaintiff-respondents cannot ask for ejectment of the defendant-appellant solely on the basis of the duration clause in the unregistered deed. The unregistered deed can at best be looked into for ascertaining the commencement of possession, rate of rent or simitar other provisions which are collateral to the principal transaction. This should be the true import of the proviso to Section 49, Indian Registration Act, 1908. It could never have been the intention of the Legislature that under the first part of the section we should discard an unregistered document for want of registration and at the same time under the camouflage of the proviso we should be permitted to look into and rely upon all the terms of the inoperative document which do form the integral parts of the principal transaction.

Calcutta High Court

Pieco Electronics And ... vs Smt. Tribeni Devi on 27 July, 1989

Equivalent citations: AIR 1990 Cal 135

Bench: S Ahmed, P K Banerjee

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Whether unregistered relinquishment deed is admissible in evidence?

 By Exh.72, petitioner herein had objected to exhibit Relinquishment-Deed dated 21st December, 1996, copy whereof is at Annexure 'C' to this petition.

 This Court finds that in view of Section 34 read with Section 37 of the Bombay Stamps Act, 1958, and Section 17 read with Section 49 of the Registration Act, 1908, the document, in question, is rendered inadmissible in the following admitted premises:

[a] Suit is for partition and possession.

[b] Defendant's possession is admitted.

[c] Nothing is to be shown or proved for collateral purpose or issue from this document.

[d] Document is admittedly for Relinquishment of right in immovable property. for a disclosed consideration of Rs. 50,000/-.

[e] Document is on impressed stamp paper of Rs. 50/- which is admittedly insufficient.

[f] Document is not referred for compliance under Section 37 of the Bombay Stamps Act, 1958.

[g] Under Section 34, it is not admissible due to failure to comply with proviso to Section 34.

[h] Admittedly, it needs stamp chargeable as per law.

[i] This document is not registered.

11. In these premises of facts and law, namely statutory bar on Court falling from Section 17, read with Section 49[c] of the Registration Act, 1908, and Section 34 read with Section 37 of the Bombay Stamps Act, 1958, only conclusion, which emerges, is that application [Exh.72] objecting admissibility is liable to be allowed, and is hereby allowed, and this Court holds that the Relinquishment-Deed dated 21st December, 1996 is not admissible in evidence.

Bombay High Court

Nilkanth Son Of Sampat Khandade vs Bhaurao Son Of Sampat Khandade And ... on 11 March, 2008

Equivalent citations: 2008 (3) BomCR 282

Author: A Joshi

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