Supreme Court Allows Unregistered Sale Deed as Evidence of Oral Agreement in Specific Performance Suit: Muruganandam vs. Muniyandi (2025)

Date of the Judgment: May 08, 2025
Citation: 2025 INSC 652
Judges: Justice Pamidighantam Sri Narasimha and Justice Joymalya Bagchi

Can an unregistered sale deed be used as evidence in a suit for specific performance of an oral agreement? The Supreme Court of India recently addressed this crucial question in the case of Muruganandam vs. Muniyandi (Died) Through Lrs. The court clarified the circumstances under which an unregistered document affecting immovable property can be admitted as evidence, particularly in cases seeking specific performance of a contract. This judgment provides clarity on the application of Section 49 of the Registration Act, 1908, and its proviso.

Case Background

The case revolves around a dispute over a property sale agreement. The appellant, Muruganandam, claimed that the respondent, Muniyandi, agreed to sell his property based on an agreement of sale dated January 1, 2000. Muruganandam asserted that he paid a part consideration of Rs. 5000 and was given possession of the property. Subsequently, on September 1, 2002, the parties allegedly agreed to a sale price of Rs. 550 per cent, with Muruganandam paying an additional Rs. 10,000 and further amounts over time.

When Muniyandi allegedly failed to execute the sale deed, Muruganandam filed a suit for specific performance of the agreement and for a permanent injunction. During the proceedings, Muruganandam sought to introduce the original agreement of sale dated January 1, 2000, which he claimed had been misplaced.

Timeline:

Course of Proceedings

The Trial Court dismissed Muruganandam’s application to present the document, citing that his reasons for not producing the original earlier were unconvincing. The court also noted that the document was unstamped and unregistered, thus barred under Section 35 of the Indian Stamp Act, 1899, and Section 17 of the Registration Act, 1908.

Muruganandam then filed a Civil Revision Petition before the High Court of Judicature at Madras, which was also dismissed. The High Court upheld the Trial Court’s decision, stating that the document, being unstamped and unregistered, could not be admitted as evidence.

Legal Framework

The Supreme Court’s decision hinged on the interpretation of Section 49 of the Registration Act, 1908, which deals with the effect of non-registration of documents. The main part of Section 49 states that unregistered documents required to be registered cannot affect immovable property or be received as evidence of any transaction affecting such property. However, the proviso to Section 49 provides an exception:

“Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 or as evidence of any collateral transaction not required to be effected by registered instrument.”

This proviso allows an unregistered document to be admitted as evidence in a suit for specific performance or as evidence of a collateral transaction.

Arguments

Appellant’s Arguments:

• ✓ The appellant argued that the courts below had disregarded the proviso to Section 49 of the Registration Act, which permits the tendering of documents that endorse an oral agreement of sale.
• ✓ He relied on the Supreme Court’s decision in S. Kaladevi v. V.R. Somasundaram [(2010) 5 SCC 401], to support his contention that an unregistered document can be used as evidence of a contract in a suit for specific performance.
• ✓ The appellant also contended that reliance on Section 17(1A) of the Registration Act was incorrect because the document was executed on January 1, 2000.

Respondent’s Arguments:

The respondents did not enter an appearance despite notice being served.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues in the judgment. However, the core issue before the Court was:

1. Whether the appellant should be permitted to present the unregistered sale agreement dated January 1, 2000, as evidence in a suit for specific performance.

Treatment of the Issue by the Court: “The following table demonstrates as to how the Court decided the issues”

Authorities

The Supreme Court relied on the following case:

• ✓ S. Kaladevi v. V.R. Somasundaram [(2010) 5 SCC 401] – The Supreme Court cited this case to support the proposition that an unregistered document may be received as evidence of a contract in a suit seeking specific performance. The Court highlighted that the proviso to Section 49 of the Registration Act allows for such admissibility.

The Supreme Court considered the following legal provision:

• ✓ Section 49 of the Registration Act, 1908 – The Court analyzed this section, particularly the proviso, to determine whether the unregistered sale agreement could be admitted as evidence.

Judgment

The Supreme Court allowed the appeal, setting aside the High Court’s order. The Court directed that I.A. No. 1397 of 2014 be allowed, permitting Muruganandam to present the document dated January 1, 2000, as evidence.

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• ✓ S. Kaladevi v. V.R. Somasundaram [(2010) 5 SCC 401]: The Supreme Court followed this precedent, affirming that an unregistered document can be admitted as evidence of a contract in a suit for specific performance under the proviso to Section 49 of the Registration Act.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the interpretation of Section 49 of the Registration Act, 1908, and the precedent set in S. Kaladevi v. V.R. Somasundaram. The Court emphasized that the proviso to Section 49 allows an unregistered document affecting immovable property to be received as evidence of a contract in a suit for specific performance.

The Court also considered the fact that the document dated January 1, 2000, was referred to in the plaint, and a photocopy was filed along with it. The appellant intended to use the document only as proof of the oral agreement of sale, which is permitted under Section 49 of the Registration Act.

Fact:Law Ratio

The court’s decision was primarily based on legal considerations (70%), focusing on the interpretation of Section 49 of the Registration Act and the application of the precedent in S. Kaladevi v. V.R. Somasundaram. The factual aspects of the case (30%), such as the document being referred to in the plaint, played a secondary role in the decision.

Logical Reasoning:

ISSUE: Whether the appellant should be permitted to present the unregistered sale agreement dated January 1, 2000, as evidence in a suit for specific performance.

The logical reasoning of the court can be summarized as follows:

Unregistered Document Affecting Immovable Property
↓
Is the Document Offered as Evidence in a Suit for Specific Performance?
↓
YES
↓
Proviso to Section 49 of the Registration Act Applies
↓
Unregistered Document May Be Received as Evidence of a Contract
↓
Appellant Permitted to Introduce the Document

The Supreme Court reasoned that since the document was being offered as evidence in a suit for specific performance, the proviso to Section 49 of the Registration Act applied, allowing the document to be admitted as evidence.

The court quoted:

• “Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 or as evidence of any collateral transaction not required to be effected by registered instrument.”
• “12. 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.”
• “Under these facts and circumstances, we are of the opinion that the appellant can be permitted to introduce the said document dated 01.01.2000. We make it clear that we have not expressed any opinion on the contents of the document and it is also open for the respondent/defendant to raise and contest the relevancy and validity of the document as are permissible in law and it is for the Trial Court to consider the submissions and pass appropriate judgment/order as it considers appropriate.”

Key Takeaways

• ✓ An unregistered document affecting immovable property can be admitted as evidence in a suit for specific performance of a contract, as per the proviso to Section 49 of the Registration Act, 1908.
• ✓ The court’s decision clarifies the scope and application of Section 49 in cases where parties seek to rely on unregistered documents as evidence of an oral agreement.
• ✓ The judgment emphasizes that the admissibility of such a document does not automatically validate its contents or the claims made by the parties; the Trial Court still needs to assess the document’s relevance and validity.

Directions

The Supreme Court directed that I.A. No. 1397 of 2014 in OS No. 78 of 2012 be allowed, permitting Muruganandam to present the document dated January 1, 2000, as evidence.

Development of Law

The ratio decidendi of the case is that an unregistered document affecting immovable property can be admitted as evidence in a suit for specific performance of a contract, as per the proviso to Section 49 of the Registration Act, 1908. This reaffirms the established legal position as clarified in S. Kaladevi v. V.R. Somasundaram.

Conclusion

In Muruganandam vs. Muniyandi (Died) Through Lrs., the Supreme Court reiterated the principle that an unregistered document affecting immovable property can be admitted as evidence in a suit for specific performance, provided it is used as evidence of a contract. The decision underscores the importance of the proviso to Section 49 of the Registration Act, 1908, in balancing the need for registration with the interests of justice in cases involving oral agreements and unregistered documents.