The Supreme Court In the matter of R. Hemalatha V Kashturi dismissed the appeal and held that an unregistered agreement to sell is admissible as evidence in a suit for specific performance. 

The court observed that the unregistered agreement to sell which is required to be registered compulsorily in terms of section 49 of the registration act has an exception under section 17(1A) of the same act as it states that the provision of section 49 will apply to documents other than the one referred in section 17(1A).

The appellant had executed an unregistered agreement to sell in favour of the respondent and the respondent filed a civil suit for the specific performance of this said agreement.

The appellant argued that as per the amendment to section 17 of the registration act and unregistered agreement to sell is inadmissible as evidence to which the respondent counterargued and contended that as per proviso to section 49 and unregistered agreement to sell can be admitted as evidence in a suit for specific performance however the trial court held that such an agreement is not admissible as evidence.

The respondent then filed a revision petition before the High Court against the trial court’s order and the High Court observed that the suit for specific performance falls within the first exception of section 49 and held that an unregistered agreement to sell is admissible as evidence.

Thus the appellant filed an appeal before the Supreme Court challenging the high court’s decision.

The Supreme Court observed that the exception to section 49 provides that an unregistered document affecting the immovable property which otherwise has to be registered can be taken as evidence in a suit for specific performance.

And thus the exception to section 49 is provided under section 17(1A) and the provision to section 49 with respect to documents other than those referred to in section 17(1A) shall be applicable.

The court in light of the above observations held that as per exception to section 49 an unregistered document which is otherwise required to be registered can be received as evidence of a contract in a suit for specific performance and thus upheld the decision of the High Court.