SC on whether a compromise decree needs to be registered or not



The Hon’ble Supreme Court, on 5th February 2020, in the matter of  Mohammade Yusuf & Ors. v. Rajkumar & Ors. observed that a compromise decree comprising immovable property other than which is the subject matter of the suit or proceeding requires registration, although any decree or order of a Court is exempted from registration.

Part III of the Registration Act contains a heading “of Registrable Documents” in which Section 17 finds place, which contains a heading “Documents of which registration is compulsory”. Section 17(1) deals with documents of which registration is compulsory. Section 17(2) provides that nothing in clauses (b) and (c) of sub-Section (1) applies to various documents as enumerated therein. (Para 4)

Under Section 17(1)(b), non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property requires registration. The word “instrument” is not defined in Registration Act, but is defined in the Indian Stamp Act, 1899 by Section 2(14). (Para 4)

A compromise decree passed by a Court would ordinarily be covered by Section 17(1)(b) but sub- section(2) of Section 17 provides for an exception for any decree or order of a Court 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 or proceeding. Thus, by virtue of sub-section(2)(vi) of Section 17 any decree or order of a Court does not require registration. In sub-clause(vi) of sub-section (2), one category is excepted from sub-clause(vi), i.e., 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 or proceeding. (Para 6)

By conjointly reading Section 17(1)(b) and Section 17(2)(vi), it is clear that a compromise decree comprising immovable property other than which is the subject matter of the suit or proceeding requires registration, although any decree or order of a Court is exempted from registration by virtue of Section 17(2)(vi). (Para 6)

Copy of judgement: Judgement_05-Feb-2020

-Adv. Tushar Kaushik 

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