Agreement for Sale Need Not Be Registered for Specific Performance Suits: Calcutta HC

An unregistered agreement for sale constitutes a valid basis for a specific performance suit, and trial courts cannot summarily dismiss such claims on grounds of deficient stamping or lack of attesting witnesses. The Calcutta High Court has clarified that a defendant's repudiation of a contract's validity creates an immediate cause of action, even if the scheduled date for the sale deed's execution has not yet arrived.

A bench of Justice Sabyasachi Bhattacharyya and Justice Sandip Kumar De heard an appeal against a trial court decree that had dismissed a suit for specific performance. The lower court had rejected the suit citing the agreement's lack of registration, insufficient stamp duty, and the absence of witnesses, while also terming the suit premature.

Key Takeaways

Statutory Protection for Unregistered Agreements

Section 49 of the Registration Act permits unregistered documents to be received as evidence in suits for specific performance, ensuring that procedural technicalities do not defeat substantive contractual rights.

Curing Stamp Duty Deficiencies

Trial Courts are mandated to impound insufficiently stamped documents and allow plaintiffs to pay the deficit rather than dismissing the suit for lack of maintainability.

Anticipatory Breach and Cause of Action

When a party refutes the very validity of an agreement as 'null and void', the aggrieved party acquires an immediate right to sue, regardless of whether the performance deadlines in the contract have passed.

Court's Rationale on Section 49 and Stamp Duty

The High Court found that the Trial Judge erred significantly in interpreting the requirements for an agreement for sale. The Court emphasized that the law does not mandate the registration of such agreements for the specific purpose of filing a suit for performance. Regarding the deficiency in stamp duty, the Bench noted that the proper procedure was impoundment rather than dismissal.

The Court, in its reasoning, observed: "Insofar as the deficiency of stamp duty is concerned, it was always open for the learned Trial Judge to impound the agreement-in-question and direct the plaintiffs to put in the deficit stamp duty before deciding the suit. However, instead of adopting such course of action, the learned Trial Judge directly found the suit not to be maintainable on such ground."

Immediate Cause of Action Arises Upon Repudiation

Addressing the finding that the suit was premature, the Court highlighted that the respondents had sent a letter claiming the agreement was "null and void." The Bench held that this refusal to perform the contract provided a sufficient cause of action. The Court has following directions:

"The learned Trial Judge, during such fresh adjudication, will be at liberty to examine the evidence led by the parties on the germane issues. However, the issues which have already been turned down by us in the above observations shall not be reopened by the learned Trial Judge. While doing so, the learned Trial Judge shall direct impoundment of the agreement-in-question as well as direct the plaintiffs, if deficiency in stamp duty is found, to make good such amount before proceeding with the trial."

Ratio

An unregistered agreement for sale is admissible in a suit for specific performance under the proviso to Section 49 of the Registration Act. Furthermore, a suit is not premature if the defendant has explicitly repudiated the contract's validity, and any deficiency in stamp duty must be addressed through the process of impoundment and payment of deficit duty rather than summary dismissal of the suit.

Background

The appellants had filed a suit for specific performance based on an agreement for sale. The Trial Judge at Bankura dismissed the suit on multiple technical grounds: the agreement was unregistered, insufficiently stamped, lacked attesting witnesses, and did not specify property boundaries. The respondents argued the suit was premature as the date for executing the sale deed (linked to a tenant vacating the premises) had not arrived. However, the High Court noted that the Schedule of the agreement sufficiently described the property and that the respondents' total denial of the agreement's validity necessitated judicial intervention. The High Court partially allowed the appeal and remanded the matter for fresh adjudication.

Case Details:
Case No.: FAT 311 of 2026 with CAN 1 of 2026
Neutral Citation: 2026:CHC-AS:1513-DB
Case Title: Rajib Hazra and Anr. Vs. Smt. Amita Chattopadhyay and Ors.
Appearances:
For the Petitioner(s): Mr. Samiran Mandal, Mr. Agniva Mandal, Mr. Nitish Samanta, Mr. S. Mitra, Advs.
For the Respondent(s): Mr. Subhas Chandra Dutta, Ms. Payel Paramanik, Advs.

Source: 2026 CaseBase(CAL) 2566