Documents of Which Registration Is Compulsory

Sub-section (1A): the 2001 amendment

Documents containing contracts to transfer for consideration any immovable property for the purpose of section 53A of the Transfer of Property Act 1882 shall be registered if they have been executed on or after the commencement of the Registration and Other Related Laws (Amendment) Act, 2001; and if such documents are not registered on or after such commencement, then they shall have no effect for the purposes of the said section 53A.

This is the most important thing in the section for a student of this syllabus, and it must be read with the change the same Act made to section 53A itself.

Before 2001, section 53A protected a transferee "notwithstanding that the contract, though required to be registered, has not been registered". An unregistered agreement to sell founded the defence.

Act 48 of 2001 did two things at once. It omitted those words from section 53A, and it inserted sub-section (1A) here. The two halves are one reform.

The result for any agreement executed on or after the commencement of that Act: an unregistered agreement to sell has no effect for the purposes of section 53A. A buyer in possession under such an agreement, however completely he has performed, has no part-performance defence.

This is the point on which most free material on this subject is still out of date, and the reason [Part Performance] and this chapter are cross-linked.

Sub-section (2): the twelve exceptions

Clauses (b) and (c) of sub-section (1) do not apply to:

(i) any composition deed;

(ii) any instrument relating to shares in a joint stock company, even though the company's assets consist wholly or partly of immovable property;

(iii) any debenture issued by such a company which does not itself create or extinguish an interest in immovable property, except so far as it entitles the holder to the security afforded by a registered instrument by which the company has mortgaged or transferred its property to trustees for the debenture-holders;

(iv) any endorsement upon, or transfer of, any debenture so issued;

(v) any document other than those specified in sub-section (1A) which does not itself create, declare, assign, limit or extinguish such a right, but merely creates a right to obtain another document which will do so when executed;

(vi) any decree or order of a Court, except one expressed to be made on a compromise and comprising immovable property other than that which is the subject-matter of the suit;

(vii) any grant of immovable property by Government;

(viii) any instrument of partition made by a Revenue-Officer;

(ix) and (x) orders and instruments under the Land Improvement and Agriculturists' Loans Acts;

(xa) orders under the Charitable Endowments Act 1890 vesting or divesting property in a Treasurer;

(xi) any endorsement on a mortgage-deed acknowledging payment of the mortgage-money, and any other receipt for money due under a mortgage where the receipt does not purport to extinguish the mortgage;

(xii) any certificate of sale granted to a purchaser at a public auction by a Civil or Revenue Officer.

Clause (v) is the one to understand, because it is the general principle behind several of the others: a document that merely promises a future document does not create an interest, and so does not require registration. An agreement to sell is exactly such a document, which is why it was outside section 17 until 2001. Sub-section (1A) carved it out of clause (v) for the limited purpose of section 53A, and the words "any document other than the documents specified in sub-section (1A)" were inserted into clause (v) to make that work.

Clause (vi) is regularly examined. A decree is not registrable, but a compromise decree is, if it comprises immovable property outside the subject-matter of the suit. The reason is that as to such property the decree is really a private bargain and not an adjudication.

The Explanation provides that a document effecting a contract for the sale of immovable property is not to be deemed to require, or ever to have required, registration by reason only that it recites the payment of earnest money or of part of the consideration.

A worked example

Pallavi is dealing with a plot at Wardha.

She executes a gift deed of it to her nephew. Compulsorily registrable under clause (a), whatever the plot is worth.

She sells it for Rs. 30 lakh. Clause (b): a non-testamentary instrument creating an interest of a hundred rupees and upwards.

She grants a lease for three years. Clause (d), the term exceeding one year.

She grants a lease for eleven months at a monthly rent. Not within clause (d), so registration is optional under section 18(c).

She makes a will leaving the plot to her nephew. Not within clause (b), which is confined to non-testamentary instruments. A will is optional under section 18(e).

She receives Rs. 5 lakh as earnest under an agreement to sell, and the agreement recites it. The Explanation applies: the agreement is not registrable by reason only of that recital.

But the agreement is her buyer's foundation for a section 53A defence, and it was executed in 2023. Sub-section (1A) applies: the document must be registered, and if it is not, it has no effect for the purposes of section 53A. The buyer's possession is unprotected.

A consent decree is passed in a suit about the plot, and it also gives her brother a different plot. Under clause (vi) the decree is registrable as to the other plot, because it is a compromise decree comprising immovable property outside the subject-matter of the suit.

She endorses on her mortgage-deed a receipt for part of the mortgage-money. Clause (xi): not registrable, the receipt not purporting to extinguish the mortgage.

She buys a property at a court auction and receives a certificate of sale. Clause (xii): not registrable.

What it does NOT mean

A gift of land has no value threshold. Every gift deed must be registered.

A will is never within section 17. Clause (b) is confined to non-testamentary instruments.

An agreement to sell is not registrable merely because it recites earnest money. The Explanation says so.

But since 2001 an agreement to sell relied on for section 53A must be registered, or it has no effect for that purpose.

Not every decree is outside the section. A compromise decree comprising property outside the suit is registrable.

A receipt on a mortgage-deed is not registrable unless it purports to extinguish the mortgage.

The lease exemption is not automatic. It needs a State Government order, and applies only where the term does not exceed five years and the annual rent does not exceed fifty rupees.

Distinctions

Quick revision

• s.17(1): compulsory for (a) gifts of immovable property; (b) non-testamentary instruments creating, declaring, assigning, limiting or extinguishing an interest of Rs. 100 and upwards; (c) receipts of consideration for such transactions; (d) leases year to year, over one year, or reserving a yearly rent; (e) instruments transferring a decree, order or award of like effect and value.
• Proviso: the State Government may exempt leases not exceeding five years with rent not exceeding fifty rupees a year.
• s.17(1A): since Act 48 of 2001, a document containing a contract to transfer for consideration for the purposes of s.53A must be registered, and if unregistered has no effect for those purposes.
• s.17(2): twelve exceptions from (b) and (c), including composition deeds, company shares and debentures, documents merely creating a right to obtain another document, ordinary decrees, Government grants, Revenue-Officer partitions, mortgage receipts not extinguishing the mortgage, and certificates of sale.
• Compromise decrees comprising property outside the suit are registrable.
• Explanation: a contract for sale is not registrable by reason only of reciting earnest money or part of the price.

Test yourself

1. Is a gift deed of land worth Rs. 50 registrable? Yes. Section 17(1)(a) makes instruments of gift of immovable property compulsorily registrable with no value threshold.

2. Which leases must be registered? Leases of immovable property from year to year, for any term exceeding one year, or reserving a yearly rent, under section 17(1)(d), subject to any State Government exemption for leases not exceeding five years at rents not exceeding fifty rupees a year.

3. Must a will of immovable property be registered? No. Section 17(1)(b) is confined to non-testamentary instruments, and a will is optional under section 18(e).

4. What did sub-section (1A) change, and when? Inserted by the Registration and Other Related Laws (Amendment) Act 2001, it requires documents containing contracts to transfer for consideration for the purposes of section 53A of the Transfer of Property Act to be registered if executed on or after its commencement, and provides that if unregistered they have no effect for those purposes. The same Act removed the corresponding words from section 53A.

5. Is an agreement to sell registrable because it records that earnest money was paid? No. The Explanation to section 17 provides that such a document is not to be deemed to require registration by reason only of a recital of earnest money or of part of the consideration. Since 2001, however, it must be registered if it is to support a section 53A defence.

6. Are decrees of a Court registrable? Generally no, under section 17(2)(vi), 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.

7. What is the principle behind clause (v) of sub-section (2)? That a document which does not itself create or extinguish an interest, but merely creates a right to obtain another document which will do so, does not require registration. Sub-section (1A) is now carved out of that clause for the purposes of section 53A.