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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The plaintiff sued for recovery of certain lands that were in the possession of the defendants. Both the Lower Courts found that the plaintiff's title and possession within twelve years prior to the suit had been proved. The narrow question in the second appeal concerned whether the plaintiff's present claim was barred by a prior compromise (Original Suit No. 363 of 1904) entered into between the parties in an earlier suit. In that prior suit the parties agreed inter alia to divide both the land then sued for and the lands now the subject-matter of this suit into two moieties, the plaintiff taking one moiety and the defendants the other. The compromise was not registered under Act III of 1877 (the Registration Act). At the time the plaintiff was a minor; the compromise was submitted under section 462 of the then Civil Procedure Code, and the court granted leave to the plaintiff's next friend to enter into the compromise, regarding it as beneficial to the minor. A decree was later passed in terms of the compromise only so far as it related to the property then actually sued for; the court could not pass a decree in respect of the properties now in suit because they were not included in the earlier claim. The plaintiff subsequently attempted to enforce the earlier decree to obtain a share of the properties now in dispute but failed. Both the Lower Courts held that the defendants could not rely on the unregistered compromise as a defence because it was compulsorily registrable under Section 17 of the Registration Act.

Legal Issues Presented

  1. Whether the plaintiff's present claim to the lands in question is unsustainable because of an unregistered compromise entered into in a prior suit that purported to divide those lands between the parties.
  2. Whether an unregistered document required to be registered under Section 17 of the Registration Act can, by being referred to or narrated in court pleadings or in a decree or order, have the same effect as if it had been registered (i.e., whether a reference/record in judicial proceedings can overcome the consequences of non-registration under Section 49 of the Registration Act).

Arguments of the Parties

Appellants' Arguments

  • The Lower Courts' view that the defendants could not rely upon the unregistered compromise was wrong.
  • Reliance was placed on Privy Council decisions (Bindesri Naik v. Ganga Saran Sahu and Pranal Anni v. Lakshmi Anni) and the case of Natesa Chetty v. Vengu Nachiar to support the proposition that an unregistered document which is referred to or narrated in a decree, order or pleadings may have the same practical effect as if it had been registered, and therefore could be relied upon to affect immovable property.
  • In particular, appellants contended that where the terms of an unregistered compromise are incorporated in court proceedings or the court's order, the non-registration should not defeat the right to the property contemplated by the compromise.

Respondents' / Court-Recorded Position

  • The defendants (as appellants below) relied on the compromise as the sole root of their title; the compromise was unregistered and therefore, under Section 17 and Section 49 of the Registration Act, cannot affect immovable property comprised therein.
  • The Lower Courts held that the compromise could not be relied upon as a defence because it was compulsorily registrable and unregistered.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Bindesri Naik v. Ganga Saran Sahu (1898) I.L.R., 20 All. 171 (P.C.) The Privy Council observed that the provisions of Section 17 of the Registration Act do not apply to proper judicial proceedings, whether consisting of pleadings filed by parties or orders made by the court. The court examined this ruling and construed it narrowly: it accepted that the Privy Council meant that pleadings and judicial orders are not themselves subject to Section 17, but rejected the notion that mere recital or reference to an unregistered agreement in pleadings or records could have the same effect as registration under Section 49.
Pranal Anni v. Lakshmi Anni (1899) I.L.R., 22 Mad. 508 (P.C.) The Privy Council held that the stipulations of a razinama incorporated in and given effect to by an order are judicial proceedings not requiring registration; where the order incorporated the terms, those terms could operate as res judicata between consenting parties. The court relied on this to draw a distinction: only that part of a compromise which is actually embodied in a decree or order can affect immovable property; mere reference or recital outside the decree does not suffice to overcome the consequences of non-registration under Section 49.
Natesa Chetty v. Vengu Nachiar (1910) I.L.R., 33 Mad. 102 Contains a dictum interpreted by some judges as supporting enforcement of an unregistered compromise even as to lands not included in the original suit. The court expressly rejected that dictum as incorrect, observing it is opposed to other reported decisions of the Madras and other High Courts and therefore not followed.
Byathamma v. Avulla (1892) I.L.R., 15 Mad. 19 Authority for the proposition that an entry of an agreement in a court's record is primary (not secondary) evidence under Section 35 of the Evidence Act. The court used this to show that while an entry in a court's record may make the agreement admissible and constitute primary evidence, that does not remove the separate statutory consequence under Section 49 that an unregistered document cannot affect immovable property.
Thama v. Kondan (1892) I.L.R., 15 Mad. 378 Cited as another authority on the evidentiary value of judicial records under Section 35 of the Evidence Act. Referred to for the evidentiary point that entries in judicial records can be treated as primary evidence; used to distinguish evidentiary admissibility from the capacity to affect immovable property.
Parbutty Dassi v. Purno Chunder Singh (1883) I.L.R., 9 Calc. 586 Another decision supporting the proposition that entries in judicial records are primary evidence under Section 35. Relied upon to reinforce the point that judicial entry may establish the contents of an agreement for evidentiary purposes but does not negate Section 49's restriction on affecting immovable property by an unregistered instrument.
Muthayya v. Venkataratnam (1902) I.L.R., 25 Mad. 553 Authority of the Madras High Court on the limits of the effect of unregistered compromises. The court followed this decision as opposed to the dictum in Natesa Chetty; it supported the view that an unregistered compromise not embodied in a decree cannot affect immovable property.
Patha Muthammal v. Esup Rowther (1906) I.L.R., 29 Mad. 365 Madras High Court authority on the same issue. The court followed this decision to support the proposition that unregistered compromises not reduced into a decree do not affect immovable property.
Raghubans Mani Singh v. Mahabir Singh (1906) I.L.R., 28 All. 78 A decision of the Allahabad High Court relied upon in some dicta. The court noted it was relied on by others but observed that the Allahabad decision has not been consistently followed in that court in later cases; the opinion did not treat it as controlling.
Kashi Kunbi v. Sumer Kunbi (1910) I.L.R., 32 All. 206 Latter Allahabad High Court decision. Referred to as a later Allahabad decision that did not follow Raghubans Mani Singh, supporting the court's line of reasoning.
Sadar-ud-din Ahmed v. Chajju (1909) I.L.R., 31 All. 13 Another later Allahabad decision that did not follow Raghubans Mani Singh. Used to show inconsistency in relying on Raghubans Mani Singh and to support the court's view.
Birbhadra Rath v. Kalpataru Panda (1905) 1 C.L.J. 338 A Calcutta High Court decision relied on in favour of appellants' position concerning unregistered compromises. The court noted Calcutta authorities often supported the appellants' position, but later distinguished factual differences in at least one Calcutta case relied on by the appellants.
Kali Charan Ghosal v. Ram Chundra Mandal (1903) I.L.R., 30 Cal. 788 Calcutta High Court authority cited for the appellants' view. Recognized as authority cited by the appellants; the court placed weight on distinctions in how such cases were decided and limited their application to the facts before it.
Gurdeo Singh v. Chandrikah Singh (1909) I.L.R., 36 Calc. 193 Another Calcutta decision cited in favour of the appellants. Noted among the Calcutta authorities; the court contrasted these with the reasoning it preferred from other decisions and distinguished relevant factual circumstances.
Jasimuddin Biswas v. Bhuban Jelini (1907) I.L.R., 34 Calc. 456 Calcutta decision involving a decree passed for an amount agreed upon in an unregistered compromise and the defendant's obligation to execute an agreement (solenama) which he failed to execute. The court observed this case was relied on by appellants but was distinguishable: the decree was for the amount and the plaintiff recovered for use and occupation; the case did not establish the general proposition that an unregistered compromise can affect immovable property not embodied in a decree.

Court's Reasoning and Analysis

The court conducted a textual and principled analysis focused on the Registration Act (Act III of 1877), Section 17 and Section 49, and the evidentiary provision Section 35 of the Evidence Act.

Step-by-step:

  1. The court recognised two distinct statutory consequences of non-registration under Section 49: (a) the unregistered document cannot be received as evidence of any transaction affecting immovable property; and (b) it shall not affect any immovable property comprised therein.
  2. The court examined the Privy Council decisions relied on by the appellants (Bindesri Naik and Pranal Anni) and concluded these authorities did not intend to broaden Clause (i) of Section 17 (which exempts "decrees and orders" from compulsory registration) so as to make mere references or recitals of an unregistered agreement in pleadings or court records operate as registration.
  3. The court accepted that an agreement recorded in a court's order or the court's record is primary evidence under Section 35 of the Evidence Act (citing Byathamma, Thama, Parbutty Dassi, etc.). This addresses only the evidentiary consequence (i.e., admissibility and character as primary evidence) and may remove the barrier created by the inadmissibility limb of Section 49.
  4. However, the court emphasised that removing evidentiary inadmissibility does not remove the separate statutory consequence that an unregistered instrument cannot affect immovable property. In short, making the agreement admissible as evidence is insufficient to make it operate as a registered instrument capable of transferring or affecting immovable property unless its terms have in fact been embodied in a decree or order of the court.
  5. The court explained the practical operation of a compromise submitted for recording: while the whole compromise is put before the court and becomes part of the pleadings, the court will pass a decree only in respect of the subject-matter of the suit. Only the portion of the compromise that has been passed into a decree or order will be capable of affecting immovable property.
  6. The court reviewed conflicting decisions and dicta (notably Natesa Chetty and Raghubans Mani Singh), rejecting dicta inconsistent with the view that an unregistered compromise not embodied in a decree can affect immovable property. The court preferred the line of decisions (including Muthayya, Patha Muthammal and certain Calcutta authorities) that restrict effect to what is embodied in a decree or order.
  7. Applying these principles to the facts: the earlier compromise was not registered; only the properties actually sued for in the earlier proceeding were decreed in terms of the compromise. The lands now in dispute were not decreed as part of that prior judgment. Consequently, the defendants' title rests solely on an unregistered compromise which, as to those lands, cannot affect immovable property under Section 49.

Holding and Implications

Holding: SECOND APPEAL DISMISSED.

Implications and direct effects:

  • The decision affirms the Lower Courts' findings that the plaintiff's title and possession (within twelve years prior to the suit) are proved.
  • The defendants cannot rely upon the unregistered compromise as a defence to affect the immovable properties now in dispute because the compromise was not embodied in a decree or order as to those properties and therefore does not satisfy the requirements of the Registration Act (Section 17 read with Section 49).
  • The case does not purport to create a new, broad precedent altering the statutory effect of non-registration; rather it clarifies that entries in judicial records or pleadings may render an agreement admissible under Section 35 of the Evidence Act but do not, by themselves, remove the statutory prohibition in Section 49 against an unregistered instrument affecting immovable property unless the terms have been incorporated into a decree or order.

Costs: The Second Appeal was dismissed with costs.

Show full summary ...

    R.P. Chelamanna And Anr. v. R.P. Rama Rao

    1. In this case the plaintiff's suit is for the recovery of certain lands in the possession of the defendants. Both the Lower Courts have found the plaintiff's title and possession within twelve years prior to the suit proved.

    2. The only question in second appeal is, whether the plaintiff's claim is unsustainable in consequence of a compromise entered into between the parties in a prior suit--Original Suit No. 363 of 1904. That suit was instituted by the plaintiff against the present defendants and others for the recovery of another plot of land. The parties entered into a compromise in that suit. By the terms of that compromise it was settled inter alia that both the land sued for then and the lands which form the subject-matter of this suit should be divided into two moieties and that the plaintiff should take one moiety and the defendants the other moiety. The agreement of compromise was not registered under Act III of 1877. The plaintiff being then a minor, the compromise was submitted to the court under the provisions of section 462 of the then Civil Procedure Code, and the court gave leave to the plaintiff's next friend to enter into the compromise, holding it to be beneficial to the minor. A decree was afterwards passed in terms of the compromise in so far as it related to the property which was then sued for. The court, of course, could not pass a decree then in respect of the properties now in suit, as they were not included in the claim then made. The plaintiff, it may be noted, attempted to get a share of the properties now sued for in execution of the decree in that suit. His attempt naturally failed as the decree did not cover these properties. Both the Lower Courts have held that the defendants could not rely on the compromise as a defence to this suit as it was compulsorily registrable under the provisions of Section 17 of the Registration Act.

    3. It is contended before us on behalf of the appellants that this J. view is wrong and reliance is placed on the decisions of the Privy Council in Bindesri Naik v. Ganga Saran Sahu (1898) I.L.R., 20 All.171.,(P.C.) and Pranal Anni v. Lakshmi Anni (1899) I.L.R., 22 Mad., 508 (P.C.) and on the case of Natesa Chetty v. Vengu Nachiar (1910) I.L.R., 33 Mad., 102. Several other cases were cited at the argument on both sides. As there is some conflict of judicial opinion on the point, it is desirable to refer at some length to the rulings of the Privy Council mentioned above. In Bindesri Naik v. Ganga Saran Sahu (1898) I.L.R., 20 All.171.,(P.C.) the suit was to enforce the payment of money due on a mortgage bond by sale of the mortgaged property. The dispute between the parties was whether the plaintiff was entitled to recover as against the property the interest due to him on the mortgage-amount after the date fixed for payment--originally in the instrument of mortgage. The Judicial Committee held, on the construction of the mortgage document, that he was so entitled. The plaintiff had based his claim to post diem interest, also on joint petitions presented by him and by his debtors the defendants in the suit in the course of certain proceedings instituted by the plaintiff for foreclosure. In these petitions the parties stated the total amount of principal and interest which was then due on mortgage. The sums thus stated included post diem interest up to the date of the petitions. The court was asked to sanction the arrangement between the parties under Section 257-A, Civil Procedure Code, and to grant an extension of time in accordance therewith for the payment of the mortgage debt. The required sanction was granted by the court. The defendants contended that the consent petitions could not be relied on by the plaintiff as they were not registered in accordance with the provisions of the Registration Act. The Privy Council observed: "Although, in the view) which their Lordships take the question, whether those proceedings can be founded on, without their having been registered in terms of the Act of 1877, does not necessarily arise in this appeal, they think it right to add that, having heard counsel fully upon the point, they are satisfied that the provisions of section 17 of the Act do not apply to proper judicial proceedings, whether consisting of pleadings filed by the parties or of orders made by the court." In Pranal Anni v. Lakshmi Anni (1899) I.L.R., 22 Mad., 508 at p. 513 (P.C.), a suit which had been instituted for possession of certain lands was amicably settled by a compromise between the parties, which related both to those lands and to other lands which were the subject-matter of the case before the Privy Council, The razinama which was presented to the court in the first suit stated that the parties had agreed to take each a certain share of the land sued for. One of the four schedules incorporated with it, namely, Schedule D, related to and described the lands which were the subject of the second suit, but the body of the compromise contained no reference to it. It set forth as "remarks" that the lands in Schedule D were also to be taken in equal shares by the parties. The decree of the court awarded to the plaintiff, in terms of the razinama, a share of the lands then actually sued for. The question in the second suit was whether the razinama in the previous suit which was not registered could nevertheless be relied upon by the defendants in bar of the [plaintiff's right to recover the whole of the lands. The Privy Council held that it could not. Their Lordships observed, "the objection founded upon its non-registration does not, in their Lordships' opinion, apply to its stipulations and provisions in so far as they were incorporated with, and given effect to by, the order made upon it by the Subordinate Judge in the suit of 1885. The razinama, in so far as it was submitted to and was acted upon judicially by the learned Judge, was in itself a step of judicial procedure not requiring registration; and any order pronounced in terms of it constituted res judicata, binding upon both the parties to this appeal who gave their consent to it. If the parties, after agreeing to settle the suit of 1885 on the footing that they were each to take a half share of the lands involved in that suit, and also a half share of the lands now in dispute, had informed the learned Judge that these were the terms of the compromise, and had invited him, by reason of such compromise, to dispose of the conclusions of the suit of 1885, their Lordships see no reason to doubt that the order of the learned Judge, if it had referred to or narrated these terms of compromise, would have been judicial evidence, available to the appellant, that the respondents had agreed to transfer to her the moiety of land now in dispute. But their Lordships are unable to find that any such course was taken either in the razinama or in the judicial order which gave effect to it. The razinama merely referred, by way of remark, to the lands now in dispute; and the Judge was only asked to give effect to a compromise which related to the lands then in dispute before him. This order, accordingly, merely concerns the latter, and has no reference whatever to the lands described in Schedule D of the razinama. So far as regarded these lands, the compromise was not submitted to the learned Judge, but was deliberately left by the parties to stand upon their unregistered agreement of union."

    4. The contention for the appellants is that in these two cases their Lordships of the Privy Council have laid down that an unregistered document requiring registration under section 17 of act iii of 1877, if referred to or narrated in a decree or order of a court or set out in pleadings filed by parties to the instrument in a court, would have the same effect as if it had been registered although it forms no part of the decree or order of the court. Now Section 17 enacts that documents coming within the classes referred to in Clauses (a) to (d) thereof shall be registered. Clause (i) exempts from the rule of compulsory registration "decrees and orders" of courts as an exception to Clauses (b) and (c). There is no provision in the section that pleadings before a court which are mere statements of parties should be registered. Section 49 of the Act lays down "No document required by Section 17 to be registered, shall affect any immoveable property comprised therein, or confer any power to adopt, or be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered in accordance with the provisions of this Act." It will be observed that non-registration of a compulsorily registrable document leads to two consequences: one is that it cannot be received as evidence of any transaction affecting immoveable property and the other that it shall not affect any immoveable property comprised therein. If a razinama has been passed into a decree or order by a court then under clause (i) of section 17 it is exempted from compulsory registration; and the decree or order would constitute the matters comprised therein res judicata between the parties to the litigation. But if any portion of the razinama has not passed into a decree or order of court, it is prima facie difficult to see how a recital of it in the proceedings of the court or its inclusion in pleadings put before the court will coma within the terms of Clause (i). And it is difficult to suppose that their Lordships of the Privy Council could have intended to extend the provisions of Clause (i) in the manner urged by the appellants. On examination of the language employed by their Lordships, it is clear that they did not do so intend. The observation in the earlier case is that the provisions of section 17 do not apply to pleadings. This is no doubt obvious. In the latter case, the dictum is that the order of the Judge if it had referred to or narrated the terms of the compromise not embodied in the decree of the court, would have been judicial evidence available to the appellant that the respondents had agreed to transfer the moiety of the lands to which the reference or narration might relate. All that their Lordships meant, apparently, was that the entry of an agreement in a decree or order of court would be relevant to prove the agreement, This is laid down in Section 35 of the Evidence Act. It has been held that such an entry would be primary and not secondary evidence of the facts contained in it. See Byathamma v. Avulla (1892) I.L.R. 15 Mad., 19 at p. 23, Thama v. Kondan (1892), I.L.R., 15 Mad., 378, Parbutty Dassi v. Purno Chunder Singh (1883) I.L.R., 9 Calc., 586. But taking it that an agreement could be proved by means of the entry of it in an order of court this circumstance would only get rid of one of the two consequences of non-registration laid down in Section 49 of the Registration Act, viz., the inadmissibility of the document in evidence. It does not, however, remove the other consequence, namely, that the document cannot affect the immoveable property comprised therein. The observations of the Privy Council do not lend any countenance to the suggestion that the reference or narration in a decree or order could have any such effect. The immoveable property comprised in a compromise can be affected only in so far as it has passed into a decree or order of the court. If a particular transaction is not required by law to be effected by a registered instrument and if the consequence of non-registration were declared to be merely its inadmissibility in evidence then it might be possible to hold that such consequence might be avoided when the contents of the instrument are entered in judicial proceedings.

    5. It has to be remembered that, in one sense, the whole of a compromise by which a suit is terminated is put before the court for being recorded though the court will pass a decree in terms thereof only in so far as it relates to the subject-matter of the suit. When it is placed before the court with a request to record it, it becomes part of the pleadings and when the court records it, it by implication refers to the whole of the compromise. How much of the compromise would be evidence under Section 35 of the Evidence Act would depend upon how much thereof could be regarded as having been entered in the record of the court. But, as already pointed out, an entry in the court's record will not enable anything not actually part of the decree or order of the court, to affect the immoveable property compromised in that order.

    6. For these reasons, it appears to be clear that the appellants' claim to the properties now in question on account of its inclusion in the compromise is unsustainable. As for Natesa Chetty v. Vengu Nachiar (1910) I.L.R., 33 Mad., 102 at p. 108 there is a dictum there in appellants' favour. The learned judges who decided the case--wallis and Sankaran Nair, JJ.--observe referring to the passage in Pranal Anni v. Lakshmi Anni (1899) I.L.R., 22 Mad., 508 (P.C.) already set out in these records:

    "In our opinion this passage clearly means that the compromise could have been enforced, although not registered, even about the lands not included in the suit. The learned judges who decided Raghubans Mani Singh v. Mahabir Singh (1906) I.L.R., 28 All., 78, understood their Lordships' judgment in the same way."
    With all deference to the learned judges this dictum cannot be accepted as correct. It is opposed to the decisions of the court in Muthayya v. Venkataratnam (1902) I.L.R., 25 Mad., 553 and Patha Muthammal v. Esup Rowther (1906) I.L.R., 29 Mad., 365, The decision of the Allahabad High Court in Raghubans Mani Singh v. Mahabir Singh (1906) I.L.R., 28 All., 78 relied on by the learned judges, has not been followed in that court itself in the later cases of Kashi Kunbi v. Sumer Kunbi (1910) I.L.R., 32 All., 206 and Sadar-ud-din Ahmed v. Chajju (1909) I.L.R., 31 All., 13. Our view is in accordance with the decisions of the Calcutta High Court; in Birbhadra Rath v. Kalpataru Panda (1905) 1 C.L.J., 338, Kali Charan Ghosal v. Ram Chundra Mandal (1903) I.L.R., 30 Cal., 788, and Gurdeo Singh v. Chandrikah Singh (1909) I.L.R., 36 Calc., 193 and Jasimuddin Biswas v. Bhuban Jelini (1907) I.L.R., 34 Calc., 456 was relied on in favour of the appellants. But that case is distinguishable. There, a decree was passed against the defendant for the amount agreed upon as the proper rent by an unregistered compromise. The defendant was bound to execute a solenama according to the terms of the compromise, agreeing to pay that rent. He remained in occupation of the plaintiffs' land, but failed to execute the solenama. It was held that the plaintiff was entitled to the rent fixed by the compromise. The plaintiff would be entitled to recover the amount from the defendant as for use and occupation though that 'was not the exact ground on which the decision was based.

    7. The defendants in their written statement did not put forward any title to the land except under the compromise referred to above. That is therefore the only root of their title and as it is unregistered they cannot rely on it as affecting the immoveable property comprised therein.

    8. The Second Appeal must be dismissed with costs.

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    Comments

    R.P. Chelamanna And Anr. v. R.P. Rama Rao
    (Aug 11, 1911)