Compromise Decree Which Does Not Take In Property That Is Not Subject Matter Of Suit Need No Registration: SC [Read Judgment]

The Supreme Court has observed that a compromise decree does not require registration if it does not take in property that is not the subject-matter of the suit.

In this case, the Trial Court had allowed the objection filed by the plaintiff to the admissibility of a compromise decree sought to be adduced in evidence by the defendant on the ground that it was not registered. The Trial Court observed that the decree required to be registered as per provision of Section 17 of the Registration Act, hence it is not admissible in evidence. The High Court upheld this view.

In appeal, the issue before the Apex Court bench was whether the compromise decree was required to be registered under Section 17 of the Registration Act, 1908 or not? Referring to provisions of the Act, the bench comprising Justices Ashok Bhushan and MR Shah observed

"A compromise decree passed by a Court would ordinarily be covered by Section 17(1)(b) but subsection(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. Thus, 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). "

The Court noted that, in this case, the compromise decree was passed by the Court for the property, which was the subject matter of the suit. Thus, the exclusionary clause in Section 17(2)(vi) is not applicable and the compromise decree dated 04.10.1985 was not required to be registered on plain 8 reading of Section 17(2)(vi), it said.

The bench also referred to the judgment in Som Dev and Others Vs. Rati Ram, (2006) 10 SCC 788 which had held that all decree and orders of the Court including compromise decree subject to the exception as referred that the properties that are outside the subject matter of the suit do not require registration. 

Case name: MOHAMMADE YUSUF vs. RAJKUMAR
Case no.: CIVIL APPEAL NO.800 OF 2020 
Coram:  Justices Ashok Bhushan and MR Shah 

Click here to Read/Download Judgment

Read Judgment