Singh Sawhney, Advs v. MOHITA GUPTA

11. Having heard the learned counsels for the parties and upon perusal of the decision of the Division Bench of this Court in Gaurav Aggarwal (supra) this Court finds that the issue with regard to the admissibility of unregistered agreement to sell in the State of Uttar Pradesh is no more res integra.

12. In Gaurav Aggarwal (supra) identical facts were involved. In the said case also the issue had arisen with regard to the admissibility of an unregistered agreement to sell in respect of an immovable property in the State of Uttar Pradesh. Incidentally, the said agreement to sell was also with regard to the transfer of lease hold rights. The Arbitrator vide his impugned order had allowed the application filed by the respondent therein and terminated the arbitral proceedings holding that agreement to sell executed between the parties require mandatory registration and stamping in the State of Uttar Pradesh.

13. The award was assailed by the claimant by filing a petition under Section 34 of the Act before this Court bearing no. O.M.P. 1/2025 titled as Gaurav Aggarwal vs. Richa Gupta.

14. The learned Single Judge relying upon the decision of the High Court of Allahabad in Vijay Kumar Sharma vs. Devesh Behari Saxena, AIR 2008 All 66, vide his judgment dated 15.10.2025 held that the learned Arbitrator has rightly observed that in view of the amendment by U.P. Act No. 57 of 1976 carried out in the Registration Act, 1908 in the State of Uttar Pradesh, the contract for sale of an immovable property requires mandatory registration.

15. It was further held that the learned Arbitrator rightly concluded that even transfer/sale of lease or sub-lease rights of a property without reserving any right would amount to sale and any contract for sale/sale of such lease hold or sub-lease hold rights will be a contract of sale within the meaning of Section 54 of the Transfer of Property Act, 1882. Accordingly, the unregistered agreement to sell was held to be unenforceable under Section 49 of the Registration Act. The relevant extract from the decision of the learned single judge reads thus:

16. The challenge was thereafter taken in appeal[1] by the claimant therein. The Division Bench after comparative overview of the provisions of the Transfer of Property Act, 1882 and the Registration Act, 1908 vis-a-vis the State amendments carried therein in the State of Uttar Pradesh by virtue of the UP Civil Laws (Reforms and Amendment) Act, 1976 [U.P. Act No. 57 FAO(OS) 136/2025 titled as Gaurav Aggarwal vs. Richa Gupta of 1976] dismissed the appeal by making following observations: “It is necessary to set out a comparative overview of the Central enactment and the amendments introduced in the State of UP. The position may be tabulated as under: Statute / Provision Central Law Law as applicable to Uttar Pradesh after the UP Civil Laws (Reforms and Amendment) Act, Section 54, Transfer of Property Act, 1882 “Sale” defined.—“Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and partpromised. Sale how made.—Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument. In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property. Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property. “Sale” defined.—“Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and partpromised. Sale how made.—Such transfer, in the case of tangible immoveable property, or in the case of a reversion or other intangible thing, can be made only by a registered instrument. Contract for sale.—A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property Such contract can be made only by a registered instrument. [inserted vide UP Act Contract for sale.—A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property No. 57 of 1976] Section 17(1) (f) Registration Act, No equivalent clause in the Central Act. Clause (f) inserted: “any other instrument required by any law for the time being in force, to be registered.” [This brings contracts for sale within compulsory registration in UP] Section 17(2)(v) (documents creating right to Obtain another document) These documents need not be registered unless the interest is ₹100 or more. UP inserts the words “other than contract for sale”, and omits the value threshold [Contracts for sale are carved out and treated separately; they become compulsorily registrable irrespective of value in UP] Explanation to Section 17(2) Registration Act, 1908 Explanation.—A document purporting or operating to effect a contract for the sale of immovable property shall not be deemed to require or ever to have required registration by reason only of the fact that such document contains a recital of the payment of any earnest money or of the Explanation omitted by the UP Amendment Act [removes the statutory exception that protected such documents from compulsory registration even when they recited payment of any earnest money] whole or any part of the purchase money. Section 49 (main paragraph) Registration Act, Bars effect of unregistered documents required to be registered u/s 17 or by any provision of the Transfer of Property Act, 1882 Inserts: “or of any other law for the time being in force.” [Strengthens the bar: if any law as applicable in UP requires registration and it is not registered] Section 49(b) Act, 1908 Non-registration of documents required to be registered cannot “confer, any power to adopt” clause (b) substituted to: “confer any power or create any right or relationship.” [The restriction becomes broader even powers or relationships cannot arise from an unregistered document.] Section 49(c) Act, 1908 “be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered” [Bars admission of unregistered document affecting immovable property in evidence.] Amendment adds: “or creating such right or relationship.” “be received as evidence of any transaction affecting such property or conferring such power, or creating such right or relationship, unless it has been registered” [Makes the evidentiary bar more comprehensive.] Proviso to Section 49 Act, 1908 Unregistered document may be admitted as evidence of a contract in a suit for specific performance or collateral transaction not required to be effected by registered instrument.. omits the words “as evidence of a contract in a suit for specific performance” [an unregistered instrument cannot be used in evidence even for specific performance.]

23. In view of the aforesaid comprehensive statutory framework, the contention of the Appellant that the ATS dated 05.01.2024 merely contemplated transfer of subleasehold rights and, therefore, did not require registration, cannot be accepted. The amendment introduced by the U.P. Civil Laws (Reforms and Amendment) Act, 1976 makes no distinction between agreements to sell relating to freehold, leasehold, or sub-leasehold interests. Any instrument that has the effect of creating, declaring, assigning, limiting, or extinguishing rights in immovable property, whether ownership or leasehold, falls within the expression “contract for sale” under Section 54 of the Transfer of Property Act, 1882. Consequently, every such agreement concerning immovable property situated in Uttar Pradesh must be duly stamped and registered under the Registration Act, 1908, as amended in its application to that State.

24. It is thus evident that unless the Agreement to Sell is duly registered, no valid or legally enforceable contract comes into existence in the eyes of the law in respect of immovable property situated in Uttar Pradesh. Registration, in such context, is not a mere procedural formality but a statutory condition precedent to the formation of a legally enforceable contract for sale. While the doctrine of separability preserves the arbitration agreement at the referral stage, it does not enable the Arbitral Tribunal to proceed where the underlying contract can be made only by a registered instrument and is rendered inadmissible for want of compulsory registration. In such circumstances, the continuation of the Arbitral proceedings becomes legally untenable. Deficiency in payment of stamp duty under the Stamp Act, although a curable defect, does not dilute the consequences of non-registration of an instrument required to be compulsorily registrable by the amended Registration Act and the Transfer of Property Act, as applicable in Uttar Pradesh, where the law mandates that contracts for sale of immovable property can be made only by a registered instrument.

25. Once the Agreement to Sell is found to be unregistered and unstamped, the necessary consequence under the amended Section 49 of the Registration Act is that such a document cannot be received in evidence or acted upon for any purpose, including the enforcement of any contractual or Arbitral rights purportedly arising therefrom. The Arbitral Tribunal, therefore, rightly concluded that there was no valid and enforceable agreement capable of any relief in Arbitration. The learned Single Judge, in affirming this view, committed no error.

26. The Allahabad High Court in Irfan Qureshi v. Up State Industrial Development Authority and Another has interpreted that amendment to mean that an agreement to sell immovable property in U.P. must be registered to create any right, title or interest and that a non-registered agreement is inadmissible for the purpose of seeking specific performance or other relief. Accordingly, in the present case, since the ATS is unregistered and concerns immovable property situated in U.P., the Arbitral tribunal correctly treated the document as legally incapable of supporting the claimed relief and terminated the proceedings; the learned Single Judge rightly upheld that conclusion.

27. For the aforegoing reasons, this Court finds no infirmity in the view taken by the learned Sole Arbitrator or by the learned Single Judge. The ATS dated 05.01.2024, being neither registered nor properly stamped as required under the amended law applicable in the State of Uttar Pradesh, where a contract for sale can be made only by a registered instrument, was rendered inadmissible for the purpose of seeking any relief affecting immovable property, including specific performance. Without a legally admissible foundational document, the Arbitral proceedings lacked the essential substratum for adjudication and could not continue. The termination of the Arbitral proceedings under Section 32(2)(c) of the AC Act, therefore, cannot be faulted.” [emphasis supplied]

17. The challenge was thereafter carried to the Hon’ble Supreme Court by the claimant therein by filing SLP (C) 36063/2025, which was also dismissed vide order dated 16.12.2025.

18. In view of the law exposited in Gaurav Aggarwal (supra), this Court is of the view that the issue involved in the present case is squarely covered by the said decision. Accordingly, the agreement to sell being unregistered and unstamped as per the Registration Act, 1908, Transfer of Property Act, 1882 and Indian Stamps Act, 1899 cannot be enforced. The learned Sole Arbitrator rightly denied the relief of specific performance of the agreement to sell holding the same to be unenforceable document.

19. The petition along with pending application, is dismissed.

20. The date already fixed i.e. 06.05.2026, stands cancelled.

VIKAS MAHAJAN, J FEBRUARY 10, 2026 N.S. ASWAL