Rajive Bhalla, J.

1. A reference relating to the apparent conflict between two Single Bench judgments titled as Gurbachan Singh v. Raghubir Singh, : (2010-2)158 PLR 511 [LQ/PunjHC/2009/2611] and Birham Pal and others v. Niranjan Singh and another, 2011 (2) LH (P&H) 1136, has been placed before us. The questions that require to be answered are whether an unregistered agreement to sell, accompanied by delivery of possession or executed in favour of a person in possession, i.e. an agreement that envisages part performance, of an agreement to sell as envisaged by Section 53-A of the Transfer of Property Act, can be received in evidence as proof of the agreement and as a natural corollary whether a suit for specific performance would lie on the basis of such an unregistered agreement to sell. A relevant extract from the reference order reads as follows:-

However, since there is a conflict regarding the legal position as to whether the suit for specific performance can be decreed on the basis of unregistered agreement to sell in view of Section 17(1A) of the Registration Act, 1908 and the other provisions referred to above, if the plaintiffs claim to be in possession in part performance of the agreement. Therefore, it would be appropriate, if the matter is referred to the Division Bench to decide the said issue of law.

2. Any answer to the questions posed, would necessarily require an appraisal of Section 17(1A) and 49 of the Registration Act, 1908 (hereinafter referred to as the 1908 Act) and Section 53A of the Transfer of Property Act, 1882 (hereinafter referred to as the 1882 Act) and the opinion recorded in Gurbachan Singh v. Raghubir Singh, : (2010-2)158 PLR 511 [LQ/PunjHC/2009/2611] and Birham Pal and others v. Niranjan Singh and another, 2011 (2) LH (P&H) 1136, which are in apparent conflict.

3. The judgment in Gurbachan Singh v. Raghubir Singh (supra), holds that an agreement to sell accompanied by delivery of possession is inadmissible in evidence if it is not registered and, therefore, a suit for specific performance based upon such an unregistered agreement, is not maintainable. The opinion recorded in Birham Pal and others v. Niranjan Singh and another (supra), is to contrary as it has been held on the basis of the proviso to Section 49 of the Indian Registration Act and such an agreement can form the basis of a suit for specific performance.

4. We have heard counsel for the parties.

5. An agreement to sell does not confer any right, title or interest, except to the extent of conferring a right to seek enforcement of the agreement, by filing a suit for specific performance, under the Specific Relief Act, 1963. Where, however, an agreement to sell is accompanied by delivery of possession or is executed in favour of a person already in possession and if such person has performed or is willing to perform his part of the contract then whether the contract reaches fruition as a final instrument of transfer or not, Section 53 of the 1882 Act provides that the transferor shall be prohibited from enforcing any right in respect of property, which is subject matter of the contract other than rights expressly provided by the terms of the contract, even if the contract is not registered. Section 53A of the 1882 Act reads as follows:-

Section 53A of Transfer of Property Act, 1882.

Part performance-Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract. Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.

6. A contract/agreement that satisfies the ingredients of Section 53A of 1882 Act was not compulsory registerable whether under the Transfer of Property Act or the Indian Registration Act, 1908.

7. The Registration and Other Related laws (Amendment) Act, 2001 (hereinafter referred to as the Amendment Act of 2001) has, however, brought about a paradigm shift in rights flowing from agreements executed under Section 53-A of the Transfer of Property Act. Section 17(1A) of the Indian Registration Act introduced by the Amendment Act of 2001, provides that contracts to transfer for consideration any immovable property for the purpose of Section 53A of the Transfer of Property Act, 1882, shall be registered if they have been executed on or after the commencement of the Registration and Other Related Law (Amendment) Act, 2001. Section 17(1A) further provides that, in case, such a document is not registered, it shall have no effect, for the purpose of Section 53A. A combined reading of Sections 53A and 17(1A), reveals that a contract that evidences part performance, as envisaged by Section 53A of the Transfer of Property Act shall, after enactment of Section 17(1A), be compulsorily registrable and if not so registered, shall have no effect for the purpose of Section 53A of the 1882 Act. Section 17(1A) reads as follows:-

Section 17(1A) of Indian Registration Act, 1908

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 Law (Amendment) Act, 2001 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.

8. Section 17(1A) of the 1908 Act declares in no uncertain terms if a contract executed in part performance of an agreement is unregistered, it shall have no effect for the purpose of Section 53A of the 1882 Act. Section 17(1A) does not refer to much less prohibit the filing of a suit for specific performance or leading of such a contract into evidence.

9. The Amendment Act also introduced a proviso to Section 49 of the Indian Registration Act, to clarify the effect of non-registration of a contract executed in terms of Section 53-A of the Transfer of Property Act. Section 49 of the Registration Act 1908, reads as follows:-

49. Effect of non-registration of documents required to be registered.- No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 to be registered shall-

(a) affect any immovable property comprised therein, or

(b) confer any power to adopt, or

(c) be received as evidence of any transaction affecting such property or conferring such power; unless it has been registered:

Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882, 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, 1877, or as evidence of part performance of a contract for the purposes of Section 53A of the Transfer of Property or as evidence of any collateral transaction not required to be effected by registered instrument.

10. A conjoint appraisal of Sections 53A of the Transfer of Property Act, 1882, Sections 17(1A) and 49 of the Indian Registration Act, 1908, particularly the proviso to Section 49 of the Indian Registration Act, in our considered opinion, leaves no ambiguity that, though, a contract accompanied by delivery of possession or executed in favour of a person in possession, is compulsorily registrable under Section 17(1A) of the Registration Act, 1908, but the failure to register such a contract would only deprive the person in possession of any benefit conferred by Section 53A of the 1882 Act. The proviso to Section 49 of the Indian Registration Act clearly postulates that non-registration of such a contract would not prohibit the filing of a suit for specific performance based upon such an agreement or the leading of such an unregistered agreement into evidence.

11. A suit for specific performance based upon an unregistered agreement to sell accompanied by delivery of possession or executed in favour of a person who is already in possession, cannot, therefore, be said to be barred by Section 17(1A) of the Registration Act, 1908.

12. Section 17(1A) merely declares that such an unregistered contract shall not be pressed into service for the purpose of Section 53(A) of the Transfer of Property Act, 1882. Section 17(1A) of the Registration Act, 1908, does not, whether in specific terms or by necessary intent, prohibit the filing of a suit for specific performance based upon an unregistered agreement to sell, that records delivery of possession or is executed in favour of a person to whom possession is delivered and the proviso to Section 49 of the Indian Registration Act, 1908 put paid to any argument to the contrary.

13. We, therefore, hold that:

(a) a suit for specific performance, upon an unregistered contract/agreement to sell that contains a clause recording part performance of the contract by delivery of possession or has been executed with a person, who is already in possession shall not be dismissed for want of registration of the contract/agreement based;

(b) the proviso to Section 49 of the Registration Act, legitimises such a contract to the extent that, even though unregistered, it can form the basis of a suit for specific performance and be led into evidence as proof of the agreement or part performance of a contract.

We, therefore, express our respectful disagreement with the judgment in Gurbachan Singh v. Raghubir Singh (supra) and affirm the judgment in Mool Chand Mindhra v. Smt. Indu Bala, : (2011-3)163 P.L.R. 378 (R.S.A. No. 2056 of 2011). The reference is answered accordingly. The appeal be set down for hearing, as per roster.