A compromise decree passed by a Court would
ordinarily be covered by Section 17(1)(b) but subsection(
2) of Section 17 provides for an exception
for any decree or order of a Court except a decree or
order expressed to be made on a compromise and
comprising immovable property other than that which
is the subject-matter of the suit or proceeding.
Thus, by virtue of sub-section(2)(vi) of Section 17
any decree or order of a Court does not require
registration. In sub-clause(vi) of sub-section (2),
one category is excepted from sub-clause(vi), i.e., a
decree or order expressed to be made on a compromise
and comprising immovable property other than that
which is the subject-matter of the suit or
proceeding. Thus, by conjointly reading Section
17(1)(b) and Section 17(2)(vi), it is clear that a
compromise decree comprising immovable property other
than which is the subject matter of the suit or
proceeding requires registration, although any decree
or order of a Court is exempted from registration by
virtue of Section 17(2)(vi). A copy of the decree
passed in Suit No.250-A of 1984 has been brought on
record as Annexure P-2, which indicates that decree
dated 04.10.1985 was passed by the Court for the
property, which was subject matter of the suit.
Thus, the exclusionary clause in Section 17(2)(vi) is
not applicable and the compromise decree dated
04.10.1985 was not required to be registered on plain
reading of Section 17(2)(vi). The High Court
referred to judgment of this Court in Bhoop Singh Vs.
Ram Singh Major and Others, (1995) 5 SCC 709, in
which case, the provision of Section 17(2)(vi) of
Registration Act came for consideration. This Court
in the above case while considering clause (vi) laid
down following in paragraphs 16, 17 and 18:-
“16. We have to view the reach of clause
(vi), which is an exception to sub-section
(1), bearing all the aforesaid in mind. We
would think that the exception engrafted
is meant to cover that decree or order of
a court, including a decree or order
expressed to be made on a compromise,
which declares the pre-existing right and
does not by itself create new right, title
or interest in praesenti in immovable
property of the value of Rs 100 or
upwards. Any other view would find the
mischief of avoidance of registration,
which requires payment of stamp duty,
embedded in the decree or order.
17. It would, therefore, be the duty of
the court to 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.
18. The legal position qua clause (vi)
can, on the basis of the aforesaid
discussion, 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 subsection
(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 “subjectmatter
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.”
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVI L APPEA L NO.800 O F 2020
MOHAMMADE YUSUF Vs RAJKUMAR
ASHO K BHUSHAN, J.
Dated:February 05, 2020.
