Unregistered sale agreements, while not transferring ownership, are admissible as evidence in a suit for specific performance to establish the existence of a contract. This admissibility is governed by the interplay between Section 17 and Section 49 of the Registration Act. However, such agreements cannot be used to claim ownership or title to the property without a decree for specific performance, as held by the High Court of Kerala in Shaju v. Victory Granite Bricks Pvt. Ltd. & Another [2025:KER:45599].
The High Court of Kerala (HCK) clarified that the general rule, stipulated in Section 49, dictates that an unregistered document that is compulsorily registrable under Section 17 shall neither affect any immovable property referred to therein nor be received as evidence of any transaction affecting such property. Nevertheless, the court recognized exceptions to this general rule, which permit the admission of an unregistered document as evidence of a contract in a suit for specific performance.
In reaching its decision, the HCK referred to the judgment of the SC in R. Hemalatha v. Kasthuri [AIR 2023 SC 1895], which examined the impact of the amendment made by Tamil Nadu to Section 17(1) of the Registration Act. The SC considered the newly inserted clause (g) to Section 17(1), which mandated the registration of all agreements relating to the sale of immovable property valued at more than one hundred rupees. The SC noted that no corresponding amendment was introduced to Section 49, thereby affirming that an agreement for sale remains admissible in evidence in a suit for specific performance, by virtue of the proviso to Section 49 of the Registration Act.
Applying this principle, the Division Bench of the HCK concluded that the legislative intent behind the amendment of Section 17 and the non-amendment of Section 49 of the Registration Act by the State Legislature was to preserve the admissibility of unregistered documents in suits for specific performance.
Similarly, the SC in Muruganandam v. Muniyandi (died) Through Legal Heirs [2025 INSC 652] held that an unregistered agreement to sell may be admitted as evidence to establish the existence of a contract in a suit seeking specific performance.
The SC stated that this arrangement is permissible under the proviso to Section 49 of the Registration Act, 1908, which allows an unregistered document to be received as evidence of a contract in a suit for specific performance or of a collateral transaction.
The SC further clarified that when an unregistered sale deed is presented as evidence, not as proof of a completed sale, but as evidence of an oral agreement of sale, the deed can be received into evidence with an endorsement indicating that it is received solely as evidence of an oral agreement of sale under the proviso to Section 49 of the 1908 Act.
References
- Shaju v. Victory Granite Bricks Pvt. Ltd. & Another [2025:KER:45599]
- R. Hemalatha v. Kasthuri [AIR 2023 SC 1895]
- Muruganandam v. Muniyandi (died) Through Legal Heirs [2025 INSC 652]
