The Supreme Court has clarified that unregistered sale agreements can be admitted in court to prove the existence of a contract in specific performance cases.
Supreme Court allows unregistered documents as evidence in specific performance suits, citing Section 49 proviso of Registration Act.
Legal Desk, New Delhi, 10-May: In a ruling with significant implications for property law and contract enforcement, the Supreme Court of India has held that an unregistered agreement to sell may be treated as valid evidence in suits seeking specific performance.
The Court interpreted the proviso to Section 49 of the Registration Act, 1908, which permits courts to consider such unregistered documents under certain conditions. This interpretation prevents genuine contractual obligations from being nullified due to technical lapses in document registration.
⚖️ Section 49: Substantive Rights vs Procedural Compliance
While Section 49 typically bars unregistered documents from being used as evidence in cases affecting immovable property, its proviso allows a key exception:
“...as evidence of a contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by a registered instrument.”
By invoking this clause, the apex court emphasised that intent and equity should not be dismissed merely due to procedural gaps, thereby reinforcing equitable remedies in contract law.
🏛️ Case Background and Court’s Reasoning
The ruling stemmed from a property dispute where the plaintiff relied on an unregistered sale agreement to demand specific performance. While the trial court accepted the agreement as evidence, its admissibility was later challenged in appellate proceedings.
The Supreme Court upheld the trial court’s view, stating that excluding such documents would defeat the very purpose of specific performance suits. The bench observed that courts must not let form override substance in genuine contractual disputes.
📣 Legal Takeaways for Litigants and Practitioners
This judgment brings clarity for litigants involved in property disputes, particularly in semi-urban or rural areas, where informal or unregistered sale agreements are common.
A senior advocate practising real estate law noted:
“The court has rightly upheld that justice cannot be sacrificed at the altar of rigid formality.”
The decision is expected to influence how contract disputes are approached across India, particularly in suits where parties seek enforcement of intent over formal documentation.
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