Is Registration Essential to Claim Specific Performance of a Sale Agreement?

In the realm of property transactions, agreements for the sale of immovable property serve as crucial instruments. Such agreements often precede the execution of formal sale deeds and are invoked to seek specific performance—a remedy whereby a party is compelled to perform its contractual obligations. One critical question that frequently arises in courts is whether registration of such sale agreements is mandatory to enforce them through specific performance. This article comprehensively examines the interplay between registration laws and the Specific Relief Act, delves into relevant statutory provisions, and analyses landmark judgments, including the recent 2025 Kerala High Court decision in Shaju v. Victory Granite Bricks Pvt. Ltd.

Understanding the Legal Framework

1. Registration Act, 1908 – Sections 17 and 49

Section 17(1) of the Registration Act enumerates documents that must be registered. Traditionally, agreements to sell immovable property were not among them, owing to the explanation to Section 17(2) which excluded mere agreements for sale.

Section 49 prescribes the consequences of non-registration:

• Such documents shall not affect immovable property,
• Shall not be admitted as evidence of any transaction affecting such property,
• Except under the proviso, which allows unregistered documents to be admitted as evidence of a contract in a suit for specific performance.

2. State Amendments – Kerala & Tamil Nadu

• Kerala Registration (Amendment) Act, 2012 inserted Section 17(1)(f), making registration of agreements for sale compulsory.
• It also deleted the Explanation to Section 17(2), which earlier allowed exemption for unregistered sale agreements.
• However, Kerala did not amend Section 49, and the proviso remains intact, permitting unregistered sale agreements as evidence in suits for specific performance.
• Tamil Nadu: Added Section 17(1)(g) through a similar amendment.

Issue

• Does the amendment to Section 17 making agreements for sale compulsorily registrable negate the benefit under Section 49’s proviso, thus barring specific performance of an unregistered sale agreement?

Judicial Precedent and Interpretation

R. Hemalatha v. Kasthuri, AIR 2023 SC 1895

In this case, the Supreme Court of India addressed the Tamil Nadu amendment to the Registration Act, similar to Kerala’s. It held:

“Despite the insertion of clause (g) in Section 17(1) and omission of the Explanation to Section 17(2), no amendment was made to Section 49. Therefore, an unregistered agreement to sell can still be admitted as evidence in a suit for specific performance by virtue of the proviso to Section 49.”

This ruling established that the retention of the proviso in Section 49 overrides any contrary implication from the amendment to Section 17.

Kerala High Court Decision: Shaju v. Victory Granite Bricks Pvt. Ltd. (2025)

Case Background

• The plaintiff sued for specific performance of an unregistered sale agreement dated 20.01.2014.
• Defendant denied execution and challenged enforceability due to non-registration under Section 17(1)(f).
• The trial court decreed the suit. The defendant appealed.

Arguments

For the Defendant:

• Post-amendment, all agreements for sale are compulsorily registrable.
• Section 49 should not allow enforcement of an unregistered contract.
• Plaintiff can only seek refund, not specific performance.

For the Plaintiff:

• The proviso to Section 49 is clear: unregistered agreements can be relied upon for specific performance.
• Section 49 remains unamended, retaining its enabling power.

Kerala High Court's Findings

Registration Is Mandatory Post-Amendment

• The court acknowledged that Section 17(1)(f) makes registration compulsory for sale agreements in Kerala.

But Section 49’s Proviso Still Applies

• The court emphasised that Section 49 was not amended.
• Therefore, the proviso enables the use of an unregistered agreement in a suit for specific performance.
• The legislative intent seems to preserve equitable remedies under the Specific Relief Act.

Specific Performance Not Barred

• The court rejected the view that the unregistered agreement is only admissible for refund of money.
• It cited the Supreme Court’s ruling in Hemalatha to conclude that specific performance is maintainable even on the basis of an unregistered agreement.

Facts Supporting Performance

• The court noted that the plaintiff had paid the full sale consideration.
• There was no denial of execution or receipt of money.
• Defendant did not even step into the witness box to disprove the case.

Interplay with Specific Relief Act, 1963

Section 10: Specific performance is enforceable when monetary compensation is inadequate.

Courts must consider:

• Willingness and readiness of the plaintiff
• Payment of consideration
• Absence of hardship to the defendant

The existence of an unregistered agreement does not automatically bar relief under these principles, especially where the execution and consideration are undisputed.

Conclusion

To conclude, registration is not essential to claim specific performance of a sale agreement if the jurisdiction retains the proviso to Section 49 of the Registration Act, 1908. Despite state-level amendments making registration of sale agreements compulsory, the courts—guided by statutory interpretation and judicial precedents—have consistently held that unregistered agreements are admissible in suits for specific performance.