Supreme Court, in a case involving an appeal against a decision of the Madurai Bench of the High Court of Madras, ruled on the admissibility of unregistered agreements to sell in suits for specific performance. The crux of the issue revolved around the interpretation of Section 49 of the Registration Act, which pertains to the admissibility of unregistered documents as evidence.

In this case, the Trial Court had framed a preliminary issue regarding the admissibility of the unregistered agreement to sell, following an application by the defendant. The Trial Court ruled in favour of the defendant, prompting the plaintiff to file a revision petition before the High Court, which subsequently overturned the Trial Court’s decision. The matter was then brought before the Supreme Court via an appeal.

The appellants argued that due to the Tamil Nadu Amendment Act No.29 of 2012 to the Indian Registration Act, the unregistered agreement to sell should be deemed inadmissible as it was compulsorily registrable under the amendment.

However, the Supreme Court, after carefully considering the Tamil Nadu Amendment Act of 2012 in conjunction with the Registration Act of 1908, made several crucial observations. It noted that while the Amendment Act required the compulsory registration of agreements relating to the sale of immovable property above a certain value, there was no corresponding amendment made to Section 49 of the Registration Act.

The Court emphasized that Section 49 of the Registration Act contains a proviso allowing for the admissibility of unregistered documents in certain circumstances, particularly in suits for specific performance under Chapter-II of the Specific Relief Act, 1877. This provision remains applicable unless the document falls under the categories specified in Section 17(1A) of the Registration Act.

Given that the document in question did not fall under any category of Section 17(1A), the Supreme Court upheld the decision of the High Court of Madras, thereby affirming the admissibility of the unregistered agreement to sell in the suit for specific performance. This ruling underscores the importance of understanding the interplay between statutory provisions and case law in determining the admissibility of documentary evidence in legal proceedings.