First of all, we should know the definition of the agreement to sale. It is defined under Section 2(e) of the Indian Contract Act
Every promise and every set of promises, forming the consideration for each other, is an agreement.
The agreement is to sell a property in the future on the terms and conditions mentioned herein. “AGREEMENT” becomes “CONTRACT”, when it is enforceable by law. It can be said that a contract is a legally enforceable agreement for performing an act or omission.
Transfer relating to immovable property is governed by the Transfer of Property Act – it is defined under Section 54 of the transfer of Property Act, 1882 that A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.
So far as the matter of registration of documents is concerned, it is described in Sec. 17 of the Indian Registration Act that, which documents are necessarily required to get registered.
I am in the opinion that we should go through section 17 (1), sub-clause (b) of the Indian Registration Act which is as follows- non-testamentary instruments, like sale deed, gift deed of the value of one hundred rupees and upwards, to or in immovable property, is required to be registered.
It will be relevant to go through section 17 (1A) of the Indian Registration Act- The documents containing contracts to transfer for consideration, any immovable property for the purpose of section 53A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the Registration and Other Related laws 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.
It is further explained that – “A document purporting or operating to effect a contract for the sale of immovable property shall not be deemed to require or ever to have required registration by reason only of the fact that such document contains a recital of the payment of any earnest money or of the whole or any part of the purchase money.
Sec. 49 of the Registration Act describes the effect of non-registration of documents required to be registered- the documents required to be registered under Sec 17 of the Registration Act must be registered to make it legally enforceable. An unregistered document shall not affect any immovable property comprised therein and shall not be received as evidence of any transaction affecting such property or conferring such power.
Provided that an unregistered document affecting the immovable property and required by Registration Act or T. P. Act to be registered may be received as evidence of a contract in a suit for specific performance under chapter II of the Specific Relief Act.
No doubt admissibility of an unregistered agreement to sale in a suit of specific performance of the contract is not barred.
So far as the matter of RERA is concerned,
I would like to describe Sec 88 of RERA, which describes that – “Application of other laws not barred – the provisions of this act shall be in addition to, and not in derogation of, (relaxation of a Rule or Law), the provisions of any other law for the time being in force.
Clearly stating, RERA is Regulation and Development of Real Estate, not regarding the transfer of the real estate.
I am of the opinion that as a General provision, an unregistered sale agreement is enforceable in law. However, as per the current legal scenario, a non-registered document that is mandatory to be registered has serious consequences since the party seeking its enforcement will not be able to rely on the document to prove its contents. This process may deprive the party of enforcing their contract.
Adv. Manoj Kumar