Compromise Decree and Registration Requirement: Supreme Court Ruling in Mohammade Yusuf v. Rajkumar
The case of Mohammade Yusuf & Ors. v. Rajkumar & Ors. revolves around the legal validity of a compromise decree and whether it requires registration under the Registration Act, 1908. The Supreme Court examined whether a decree passed in a suit concerning immovable property must be registered to be admissible as evidence.
The dispute arose when the appellants attempted to submit a compromise decree from a previous case as evidence in an ongoing property dispute. The trial court rejected it for want of registration, a decision later upheld by the High Court. The appellants challenged the ruling in the Supreme Court.
Arguments by the Petitioner
The petitioners contended that the compromise decree pertained to the subject matter of the original suit and, therefore, did not require registration. They argued:
“The compromise decree dated 04.10.1985 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 decree was not required to be registered.”
They cited legal precedents to support their claim.
Arguments by the Respondent
The respondents countered that the compromise decree conferred new rights and, therefore, required registration. They cited:
“A decree creating for the first time a right, title, or interest in immovable property of Rs. 100 or more must be registered under Section 17(1) of the Registration Act.”
They relied on a prior ruling that had held that a declaratory decree based on adverse possession cannot be claimed and can only be used as a defense.
Supreme Court’s Analysis
The Supreme Court analyzed the provisions of Section 17 of the Registration Act and concluded:
“By conjointly reading Section 17(1)(b) and Section 17(2)(vi), it is clear that a compromise decree comprising immovable property other than that which is the subject matter of the suit requires registration.”
The Court found that the decree in question related to the suit’s subject matter and did not create any new rights. Therefore, it did not require registration.
Final Verdict
The Supreme Court set aside the decisions of the trial court and the High Court and directed that the compromise decree be admitted as evidence. The ruling clarifies when a compromise decree must be registered and reinforces the distinction between decrees that declare pre-existing rights and those that create new ones.
Petitioner Name: Mohammade Yusuf & Ors..Respondent Name: Rajkumar & Ors..Judgment By: Justice Ashok Bhushan, Justice M.R. Shah.Place Of Incident: Mandsaur, Madhya Pradesh.Judgment Date: 05-02-2020.
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