The Effect of Non-registration

Two, it inserted section 17(1A) here, requiring such a contract to be registered and providing that if it is not, it has no effect for the purposes of section 53A.

Three, it removed from this proviso the permission to use an unregistered document as evidence of part performance for section 53A.

So the door was closed on the substantive side, on the registrability side, and on the evidentiary side. A student who knows only the first of the three can still be caught out by an examiner asking whether the unregistered agreement can at least be proved. Since 24 September 2001 it cannot, for that purpose.

Section 48: registered documents against oral agreements

All non-testamentary documents duly registered under the Act, and relating to any property whether movable or immovable, take effect against any oral agreement or declaration relating to that property, unless the agreement or declaration has been accompanied or followed by delivery of possession and the same constitutes a valid transfer under any law for the time being in force.

The proviso: a mortgage as defined in section 58 of the Transfer of Property Act takes effect against any mortgage-deed subsequently executed and registered relating to the same property.

The general rule is that writing on the register beats an oral arrangement. The exception preserves those oral transactions the law does allow, chiefly the mortgage by deposit of title-deeds under section 58(f), which needs no writing at all and is accompanied by delivery of the deeds. The proviso then protects such a mortgage against a later registered mortgage-deed.

Section 50: registered documents against unregistered ones

Every document of the kinds in section 17(1)(a) to (d) and section 18(a) and (b), if duly registered, takes effect as regards the property comprised in it, against every unregistered document relating to the same property, and not being a decree or order, whether or not the unregistered document is of the same nature.

Sub-section (2) excludes leases exempted under the proviso to section 17(1), documents within section 17(2), and registered documents which had no priority under the law in force when the Act commenced.

Section 50 is the positive counterpart of section 49's negative. Section 49 says what an unregistered document cannot do; section 50 says that a registered one beats it.

A worked example

Wasim agrees in writing to sell his flat at Chandrapur to Xena for Rs. 60 lakh. She pays most of the price, is put in possession, and spends money on it. The agreement is not registered. It was executed in 2022.

Wasim sues to evict her as a trespasser.

Can she rely on the agreement to prove the sale? No. Under section 49(a) and (c) an unregistered document required to be registered neither affects the flat nor is received as evidence of the transaction.

Can she rely on section 53A? No, and for three separate reasons, all traceable to Act 48 of 2001. Section 53A no longer protects a transferee under an unregistered contract; section 17(1A) provides that such a document, executed after the 2001 Act, has no effect for the purposes of section 53A; and the proviso to section 49 no longer allows it to be received as evidence of part performance for those purposes.

Can she use the document at all? Yes, for two things. She may use it as evidence of a contract in a suit for specific performance, and she may use it to prove a collateral transaction not required to be effected by a registered instrument, for example the character in which she entered into possession.

Change the date. Had the agreement been executed in 1998, the pre-2001 law would have applied and her part-performance defence would have been available on an unregistered agreement.

Change the facts. Suppose Wasim had earlier created a mortgage by deposit of title-deeds with a bank in Mumbai, orally and with delivery of the deeds, and then executed a registered mortgage-deed to another lender. Under the proviso to section 48 the earlier deposit mortgage prevails over the later registered mortgage-deed.

And if Xena's agreement had been registered, and Wasim later sold to a third party by an unregistered document? Section 50 gives Xena's registered document precedence over the unregistered one, whatever its nature.

What it does NOT mean

Non-registration is not a mere irregularity. The document does not affect the property at all.

The bar is evidentiary as well as substantive. Clause (c) prevents proof of the transaction.

The proviso does not resurrect the transaction. It allows the document as evidence of a contract in a specific performance suit, and of collateral matters.

Since 2001 it cannot be used to prove part performance. Those words were deleted from the proviso.

Section 49 is not confined to section 17. It covers documents required to be registered by any provision of the Transfer of Property Act.

Section 48 does not defeat every oral transaction. An oral agreement accompanied or followed by delivery of possession, which is a valid transfer under some law, survives, and the proviso protects a section 58 mortgage against a later registered mortgage-deed.

Distinctions

Quick revision

• s.49: a document required by s.17 or by any provision of the Transfer of Property Act to be registered, if unregistered, does not affect the property, confer a power to adopt, or be received as evidence of the transaction.
• Proviso: it may still be evidence of a contract in a suit for specific performance, or of a collateral transaction not required to be effected by a registered instrument.
• The words allowing it as evidence of part performance under s.53A were omitted by Act 48 of 2001 w.e.f. 24 September 2001, the third limb of the same reform as the change to s.53A and the insertion of s.17(1A).
• s.48: a duly registered non-testamentary document beats an oral agreement, unless the oral agreement was accompanied or followed by delivery of possession and is a valid transfer; and a s.58 mortgage beats a later registered mortgage-deed.
• s.50: a duly registered document of the listed kinds beats every unregistered document relating to the same property.

Test yourself

1. State the three things an unregistered document required to be registered cannot do. It cannot affect any immovable property comprised in it, confer any power to adopt, or be received as evidence of any transaction affecting such property or conferring such power.

2. For what purposes may such a document still be received in evidence? As evidence of a contract in a suit for specific performance, and as evidence of any collateral transaction not required to be effected by a registered instrument.

3. Can it be used to prove part performance under section 53A? No. Those words were omitted from the proviso by Act 48 of 2001 with effect from 24 September 2001.

4. Name the three changes Act 48 of 2001 made, and where. It omitted from section 53A of the Transfer of Property Act the words protecting a transferee under an unregistered contract; it inserted section 17(1A) into the Registration Act requiring such contracts to be registered and denying them effect for section 53A if they are not; and it removed from the proviso to section 49 the permission to use such a document as evidence of part performance for section 53A.

5. Does section 49 apply only to documents listed in section 17? No. It applies to documents required to be registered by section 17 or by any provision of the Transfer of Property Act 1882, which brings in sections 54, 59, 107 and 123 of that Act.

6. When does an oral agreement prevail over a registered document? Where the oral agreement or declaration has been accompanied or followed by delivery of possession and constitutes a valid transfer under any law in force. The proviso also protects a mortgage as defined in section 58 of the Transfer of Property Act against a later registered mortgage-deed.

7. What does section 50 add? That a duly registered document of the kinds in section 17(1)(a) to (d) and section 18(a) and (b) takes effect, as regards the property comprised in it, against every unregistered document relating to the same property, whether or not of the same nature.