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                                                            REPORTABLE

                 IN THE SUPREME COURT OF INDIA

                  CIVIL APPELLATE JURISDICTION

              CIVIL APPEAL NO. 3572               OF 2008                [Arising out of SLP (Civil) No. 6504 of 2006]

K. Raghunandan & Ors.                                     ...Appellants

                                      Versus

Ali Hussain Sabir & Ors.                                         ... Respondents

                            JUDGMENT

S.B. SINHA, J :

1.    Leave granted.

2.    Application of Section 17(2)(vi) of the Registration Act, 1908 (for

short "the Act") in the facts and circumstances of this case is in question in

this appeal which arises out of a judgment and order dated 31.03.2001

passed by the High Court of Andhra Pradesh at Hyderabad in L.P.A. Nos.

163 and 229 of 2000.

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3.    Appellants are neighbours. The dispute between the parties relate to

a passage. Plaintiffs - Appellants claimed to have purchased 590 sq. yards

of premises No. 5-4-413 to 415 at Nampally, Hyderabad from one P.N.

Vijaya Lakshmi.     Allegedly, another 259 sq. yards of land was also

purchased by them from the said vendor. When they had been proceeding

with the construction of the building, allegedly, respondents interfered.

     A suit bearing No. OS No. 76 of 1975 was filed claiming for a decree

for perpetual injunction. The said suit ended in a compromise, the terms

whereof are as under:

            "1. That the portion marked Green in the plan              shall be exclusively enjoyed by the Defendant              without any interference from the plaintiffs. The              plaintiffs hereby admit that this portion of land              marked Green in the plan attached with the Memo              of compromise belongs to the Defendant No. 1              and his brother Sri Noman Ali son of Sri Abdul              Khader, Defendant No. 2.

            2.     That the portion marked Red will be              enjoyed by the plaintiffs exclusively without any              interference with the Defendants or his agents.

            3.     That all other claims against Defendant in              the suit are hereby withdrawn by the plaintiffs."

4.    A map was annexed to the consent terms. All the properties shown in

the red were accepted to be the properties of the plaintiffs and the

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defendants had allegedly agreed not to interfere with their possession. It

was stated that a passage running from north to south connecting

Mukarramjahi Road was shown to be the exclusive property of the

plaintiffs. It was furthermore alleged that the respondents’ father was a

tenant in the premises bearing No. 5-4-412.         The said property was

purchased by the respondent No. 1 in a public auction held on 8.11.1957.

The extent of the land which was the subject matter is in dispute.

5.    Respondents admittedly had constructed shops on Moajamjahi road

with a huge opening on the main road. The defendants despite the said

consent terms made attempt to fix an old door on the eastern side of their

wall making an opening on the purported private passage belonging to the

appellants.

     Respondents, however, contended that the appellants have no

exclusive right over the scheduled property, i.e., passage measuring 80

yards situated at Nampally, Hyderabad. According to them, the passage in

question was a common passage.

6.    Appellants filed a suit which was marked as O.S. No. 341 of 1993 for

a declaration that the suit passage, as shown in the red marked A, B, C and

D in the plaint is their private property.

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7.    Respondents filed a suit for perpetual injunction which was marked

as O.S. No. 1132 of 1993, and renumbered as O.S. No. 769 of 1994,

seeking injunction against the appellants from interfering with their usage of

the passage. It was alleged that the appellants tampered with the plan by

adding the word "plaintiffs" above the word "passage" in the plan.

8.    The said suits were consolidated; the claims of the parties having

common issues. The issued framed were:

            "In O.S. No. 341/93              1)     Whether the plaintiffs are entitled for the              relief of declaration as prayed for?              2)    Whether the plaintiffs are entitled for              perpetual injunction as prayed for?              3)   Whether the plaintiffs are entitled for              mandatory injunction as prayed for?              4)    To what relief?

            In O.S. No. 769/1994              1)     Whether the plaintiffs are entitled for the              relief of perpetual injunction as prayed for?              2)    To what relief?"

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     The learned Senior Civil Judge, City Civil Court, Hyderabad by a

common judgment decreed O.S. No. 341 of 1993 and dismissed the suit

filed by the respondents viz. O.S. No.769 of 1994.

9.    Appeals were preferred thereagainst by the respondents.

Whereas the learned Trial Judge held that the compromise decree conferred

a right on the appellants in respect of the passage in question, the First

Appellate Court opined that the suit passage was not the subject matter of

compromise and in any event the same did not confer any exclusive right,

title and interest thereto upon the appellants.

10.   Two Letters Patent Appeals were preferred thereagainst by the

appellants, which have been dismissed by reason of the impugned judgment

inter alia on the premise that the compromise decree being not registered, no

claim relying on or on the basis thereof could form the basis of the suit.

11.   Mr. H.S. Gururaja Rao, learned senior counsel appearing on behalf of

the appellants, would submit that a consent decree not only operates as

estoppel by judgment, even the general principles of res judicata would be

applicable.

     The High Court, it was submitted, thus, committed a serious error in

relying on the decision of this Court in Bhoop Singh v. Ram Singh Major

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and Others [(1995) 5 SCC 709] which has been distinguished in Som Dev

and Others v. Rati Ram and Another [(2006) 10 SCC 788] and, thus, the

impugned judgment cannot be sustained.

12.   Mr. P.S. Narsimha, learned counsel appearing on behalf of the

respondents, on the other hand, submitted that the First Appellate Court

having arrived at a question of fact that the plaintiffs - appellants did not

derive any right, title and interest in the passage by reason of the said

compromise and/ or in any event the plaintiffs - appellants having not

claimed any right, title and interest thereupon in the suit, the compromise

decree required registration.

13.   O.S. No. 76 of 1975 admittedly was a suit for injunction. The plaint

of the said suit is not before us. It, however, appears from the judgment of

the First Appellate Court that the passage was not the subject matter of

compromise in the said O.S. No. 76 of 1975. This fact is not disputed.

14.   The First Appellate Court as also the High Court analysed the

materials brought on record.

     The question which would arise for our consideration is as to what

would be the effect of admitted case of the parties that the suit passage was

not the subject matter thereof.

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     We have noticed hereinbefore that the parties joined issues as to

whether the word "plaintiffs" was added before the word "passage" in the

plan annexed to the consent terms or not.          We have also noticed

hereinbefore that the portion marked in red was allotted to the plaintiffs-

appellants and that marked in green was allotted to the defendants -

respondents. Appellant No. 1, examined himself as PW-1. He admitted that

in the compromise memo there was no mention about the suit passage. He

also admitted that he had not claimed the suit passage in the said suit. He

also admitted that his vendor had provided the suit passage for his use. A

finding of fact has been arrived at that the passage was not shown either in

the areas demarcated in red or green.

15.   With a view to determine the issue as to whether the passage could

have been the subject matter of compromise, the parties adduced evidence.

The building plan submitted by the appellants before the Municipality was

brought on record. The passage was shown as a road which means a public

road. A finding of fact had been arrived at that there was nothing on record

to show that the passage was a private one. The High Court, in our opinion,

rightly came to the conclusion that the plan must be read in terms of the

memo filed and as the passage did not form part of the building plan, prima

facie, it was common to both. It has furthermore been found that the

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defendants had no other motorable road for approach to their factory which

is being run on premises No. 5-4-412.

16.      Sub-section (1) of Section 17 of the Act specifies the documents of

which registration is compulsory; clauses (b), (c) and (e) whereof read as

under:

              "17 - Documents of which registration is                compulsory                (1) The following documents shall be registered, if                the property to which they relate is situate in a                district in which, and if they have been executed                on or after the date on which, Act No. XVI of                1864, or the Indian Registration Act, 1866, or the                Indian Registration Act, 1871, or the Indian                Registration Act, 1877, or this Act came or comes                into force, namely:--

              (a) ***

              (b) other non-testamentary instruments which                purport or operate to create, declare, assign, limit                or extinguish, whether in present or in future, any                right, title or interest, whether vested or                contingent, of the value of one hundred rupees and                upwards, to or in immovable property;

              (c)    non-testamentary         instruments   which                acknowledge the receipt or payment of any                consideration on account of the creation,                declaration, assignment, limitation or extinction of                any such right, title or interest; and

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           (d) ***

           (e) non-testamentary instruments transferring or             assigning any decree or order of a Court or any             award when such decree or order or award             purports or operates to create, declare, assign,             limit or extinguish, whether in present or in future,             any right, title or interest, whether vested or             contingent, of the value of one hundred rupees and             upwards, to or in immovable property:

           Provided that the State Government may, by order             published in the Official Gazette, exempt from the             operation of this sub-section any lease executed in             any district, or part of a district, the terms granted             by which do not exceed five years and the annual             rents reserved by which do not exceed fifty             rupees."

17.   Sub-section (2) of Section 17 of the Act, however, carves out an

exception therefrom stating that nothing in clauses (b) and (c) of Sub-

section (1) of Section 17 would inter alia apply to "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". Even if the passage was not the subject matter of

the suit, indisputably, in terms of the Code of Civil Procedure Amendment

Act, 1976, a compromise decree was permissible.

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18.   A plain reading of the said provision clearly shows that a property

which is not the subject matter of the suit or a proceeding would come

within the purview of exception contained in clause (vi) of Sub-section (2)

of Section 17 of the Act. If a compromise is entered into in respect of an

immovable property, comprising other than that which was the subject

matter of the suit or the proceeding, the same would require registration.

The said provision was inserted by Act 21 of 1929.

19.   The Code of Civil Procedure Amendment Act, 1976 does not and

cannot override the provisions of the Act. The purported passage being not

the subject matter of the suit, if sought to be transferred by the defendants -

respondents in favour of the plaintiffs - appellants or if by reason thereof

they have relinquished their own rights and recognized the rights of the

plaintiffs - appellants, registration thereof was imperative.       The First

Appellate Court held so. The High Court also accepted the said findings.

20.   Mr. Gururaja Rao is, therefore, not correct in contending that the

High Court has not gone into the said question. The High Court clearly

affirmed the findings of fact arrived at by the learned First Appellate Court.

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     It had, however, gone into the legal question as to whether insertion

of the word "plaintiffs" before the word "passage" was an act of

interpolation on the part of the appellants or not, stating:

            "There is also some confusion with regard to the              plan itself. Whereas the plaintiffs claim that the              plan showed the passage as plaintiffs’ passage the              defendants claim and submitted a certified copy              showing that the passage was shown only as              ‘passage’ and the word ‘plaintiffs’ was an act of              interpolation.     Even without going into that              controversy and believing that the memo stated the              passage as plaintiffs’ passage could it still be              enforced by this Court would be a question. The              case of the plaintiffs is that they had given up              claim to 150 yards of land which was to the rear              side of their property and in lieu of it the passage              was exclusively given to the plaintiffs. This              assertion in itself would show that even before the              compromise the passage was being used by the              defendants but whether the right over the passage              by the defendants was given up by them in lieu of              150 yards of land cannot be gone into because the              compromise could not be enforced as it was not a              registered compromise..."

21.    Appellants have given up their claim of 150 yards of land which was

to be on the rear side of the property and in lieu thereof the passage was

exclusively given to the plaintiffs - appellants. Thus, the appellants have

rested its case on the basis of an exchange of land between the plaintiffs and

defendants. The High Court opined that as by reason thereof an inference

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can be drawn that the defendants who had been in possession of the passage

had given up their rights in lieu of 150 yards of land, the same would

constitute a transfer of property and, thus, necessitated registration. It was

in the aforementioned situation the High Court relied upon the decision of

this Court in Bhoop Singh (supra).

22.   Bhoop Singh (supra), inter alia, lays down:

            "(1) Compromise decree if bona fide, in the sense              that the compromise is not a device to obviate              payment of stamp duty and frustrate the law              relating to registration, would not require              registration. In a converse situation, it would              require registration.              (2) If the compromise decree were to create for the              first time right, title or interest in immovable              property of the value of Rs.100 or upwards in              favour of any party to the suit the decree or order              would require registration."

23.   Thus, indisputably, if the consent terms create a right for the first time

as contra-distinguished from recognition of a right, registration thereof

would be required, if the value of the property is Rs.100/- and upwards.

     Strong reliance has been placed by Mr. Gururaja Rao on Tulsan v.

Pyare Lal and Others [(2006) 10 SCC 782], Som Dev (supra), Shankar

Sitaram Sontakke and Another v. Balkrishna Sitaram Sontakke and Others

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[1955 (1) SCR 99], Raja Sri Sailendra Narayan Bhanja Deo v. The State of

Orissa [1956 SCR 73], Ramdas Sah and another v. Jagarnath Prasad and

others [AIR 1960 Patna 179] and M. Pappu Reddiar (died) and others v.

Amaravathi Ammal and others [AIR 1971 Madras 182].

24.    In view of the point involved in this appeal, we need not go into the

question as to whether a consent decree would attract the principles of res

judicata or estoppel by judgment. We will assume (although there may be

some doubt or dispute with regard to the said proposition that the said

principles are applicable. The question, as indicated hereinbefore, however,

is as to the effect thereof.

25.    In Ramdas Sah (supra), a Division Bench observed:

             "2. The first point taken on behalf of the               appellants is that the compromise decree in Title               Suit No. 2 of 1948 required registration, because               plot No. 2240 was outside the scope of the suit,               and in the absence of registration the compromise               decree was not effective with regard to plot No.               2240. We do not think there is any substance in               this argument. It appears that the plaintiff in the               partition suit in the present case claimed exclusive               title to plot No. 2240 but sought a decree for               partition with regard to other properties.

             In the compromise decree there was an agreement               between the parties that plot No. 2240 be               exclusively allotted to the plaintiff and since the

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           title of the plaintiff to plot No. 2240 was taken as             part of the consideration for the compromise             entered into between all the parties and since it is             an integral part of the compromise it is obvious             that title to plot No. 2240 was within the scope of             the partition suit and the decree is operative even             with regard to plot No. 2240 in the absence of             registration. The point has been fully dealt with in             a judgment of this Court in Miscellaneous Appeal             No. 237 of 1953, decided on the 27th July, 1955,             and also in two other decisions, Ramjanam Tewary             v. Bindeshwari Bai, AIR 1951 Pat 299 and Jagdish             Chandra Sinha and another v. Dr. Sir Kameshwar             Singh Bahadur AIR 1953 Pat 178.

           The question whether a particular term of a             compromise relates to the subject-matter of the             suit is obviously a question to be answered on the             frame of the particular suit, the relief claimed in             the suit and the matters arising for decision on the             pleadings of the parties. The term is             comprehensive enough, and if the compromise             relates to all the matters which fall to be decided             in the case, it cannot be said that any part of the             compromise is beyond the subject-matter of the             suit."

     It was clearly held that the subject matter of the suit was the subject

matter of compromise. Having held so, it was opined:

           "In other words where the compromise is really an             adjustment of the rights and differences in respect             of all matters in dispute between the parties and             the compromise purports to be a final settlement

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            and adjustment of these disputes on a fair and              satisfactory basis acceptable to all, it must be held              to relate to the suit. Applying the principle to the              present case we hold that the title to plot No. 2240              was the subject-matter of the compromise and              adjustment between the parties and so it falls              within the scope of the suit and the compromise              decree does transfer title to plot No. 2240 even              without it being registered."

26.   The said decision was followed by the Madras High Court in M.

Pappu Reddiar (supra). In the fact situation obtaining therein, it was held

that the subject matter of the compromise was inseparable from the other

provisions of the compromise decree and constituted part of the

consideration for the compromise holding that the subject matter of the suit

is not synonymous with subject matter of the plaint. It was in the peculiar

facts of the said case, the Court opined:

            "...If the consent decree or order in the suit or              proceeding covered the property, although it was              not in the plaint or in dispute, such property              constituting, as it does, an inseparable part of the              consideration for the compromise, may well, in              our view, be regarded as the subject-matter of the              suit. This is because of the decree passed on the              basis of the compromise cannot stand without that              property. If by the amendment it was intended that              if the property was not in the plaint schedule, the              consent decree should not be exempted from

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             registration, we are afraid the phraseology actually               employed by Section 17(2)(vi) has failed to               achieve the objective. We are aware that the               extended scope we have given to the expression               "subject-matter of the suit" may narrow down the               scope of the exclusion from exemption from               registration under that provision..."

       The said decisions, therefore, cannot be said to have any application

in the present case.

27.     In Bhoop Singh (supra), this Court referring to Gurdev Kaur v. Mehar

Singh [AIR 1989 P&H 324] and Ranbir Singh v. Shri Chand [1984 Pun LJ

562] as also a decision of the Bombay High Court in Sumintabai

Ramkrishna Jadhav v. Rakhmabai Ramkrishna Jadhav [AIR 1981 Bom 52]

held:

             "13. In other words, the court must enquire               whether a document has recorded unqualified and               unconditional words of present demise of right,               title and interest in the property and included the               essential terms of the same; if the document,               including a compromise memo, extinguishes the               rights of one and seeks to confer right, title or               interest in praesenti in favour of the other, relating               to immovable property of the value of Rs 100               and upwards, the document or record or               compromise memo shall be compulsorily               registered."

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     It was further observed:

           "16. We have to view the reach of clause (vi),             which is an exception to sub-section (1), bearing             all the aforesaid in mind. We would think that the             exception engrafted is meant to cover that decree             or order of a court, including a decree or order             expressed to be made on a compromise, which             declares the pre-existing right and does not by             itself create new right, title or interest in praesenti             in immovable property of the value of Rs 100             or upwards. Any other view would find the             mischief of avoidance of registration, which             requires payment of stamp duty, embedded in the             decree or order.             17. It would, therefore, be the duty of the court to             examine in each case whether the parties have pre-             existing right to the immovable property, or             whether under the order or decree of the court one             party having right, title or interest therein agreed             or suffered to extinguish the same and created             right, title or interest in praesenti in immovable             property of the value of Rs      100 or upwards in             favour of other party for the first time, either by             compromise or pretended consent. If latter be the             position, the document is compulsorily             registrable."

28.   The decision of this Court in Som Dev (supra) did not lay down any

law which runs contrary to or inconsistent with the law laid down in Bhoop

Singh (supra). Bhoop Singh (supra) was distinguished on fact stating:

               "18. Therefore, it was a case of the right being             created by the decree for the first time unlike in

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the present case. In para 13 of that judgment it is stated that the Court must enquire whether a document has recorded unqualified and unconditional words of present demise of right, title and interest in the property and if the document extinguishes that right of one and seeks to confer it on the other, it requires registration. But with respect, it must be pointed out that a decree or order of a court does not require registration if it is not based on a compromise on the ground that clauses (b) and (c) of Section 17 of the Registration Act are attracted. Even a decree on a compromise does not require registration if it does not take in property that is not the subject- matter of the suit. A decree or order of a court is normally binding on those who are parties to it unless it is shown by resort to Section 44 of the Evidence Act that the same is one without jurisdiction or is vitiated by fraud or collusion or that it is avoidable on any ground known to law. But otherwise that decree is operative and going by the plain language of Section 17 of the Registration Act, particularly, in the context of sub-clause (vi) of sub-section (2) in the background of the legislative history, it cannot be said that a decree based on admission requires registration. On the facts of that case, it is seen that their Lordships proceeded on the basis that it was the decree on admission that created the title for the first time. It is obvious that it was treated as a case coming under Section 17(1)(a) of the Act, though the scope of Section 17(2)(vi) of the Act was discussed in detail. But on the facts of this case, as we have indicated and as found by the courts, it is not a case of a decree creating for the first time a right, title or interest in the present plaintiff and his brother. The present is a case where they were putting forward in the suit a right based on an earlier transaction of relinquishment or family arrangement by which they had acquired

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            interest in the property scheduled to that plaint.              Clearly, Section 17(1)(a) is not attracted..."                                              (emphasis supplied)

     In Som Dev (supra), the plaintiff claimed half share in the property.

The defence was that the right of the plaintiff having been created under a

compromise and the same having not been registered the same could not be

enforced as against the contesting defendants or their assignor, the other co-

owner.   The High Court opined that the suit was based on a family

settlement which did not require registration and, thus, would come within

the purview of Section 17(2)(vi) of the Act. It was on the basis of the said

finding of fact, the law was laid down stating:

            "...Of course, we are not unmindful of the line of              authorities that say that even if there is inclusion              of property that is not the subject-matter of the              suit, if it constitutes the consideration for the              compromise, such a compromise decree would be              considered to be a compromise relating to the              subject-matter of the suit and such a decree would              also not require registration in view of clause (vi)              of Section 17(2) of the Registration Act. Since we              are not concerned with that aspect here, it is not              necessary to further deal with that question.              Suffice it to say that on a plain reading of clause              (vi) of Section 17(2) all decrees and orders of the              court including a compromise decree subject to the              exception as regards properties that are outside the              subject-matter of the suit, do not require              registration on the ground that they are hit by              Sections 17(1)(b) and (c) of the Act. But at the              same time, there is no exemption or exclusion, in

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            respect of clauses (a), (d) and (e) of Section 17(1)              so that if a decree brings about a gift of immovable              property, or lease of immovable property from              year to year or for a term exceeding one year or              reserving an early rent or a transfer of a decree or              order of a court or any award creating, declaring,              assigning, limiting or extinguishing rights to and              in immovable property, that requires to be              registered."

29.   A statute must be construed having regard to the purpose and object

thereof. Sub-section (1) of Section 17 of the Act makes registration of the

documents compulsory. Sub-section (2) of Section 17 of the Act excludes

only the applications of Clauses (b) and (c) and not clause (e) of Sub-section

(1) of Section 17.    If a right is created by a compromise decree or is

extinguished, it must compulsorily be registered.          Clause (vi) is an

exception to the exception. If the latter part of Clause (vi) of Sub-section

(2) of Section 17 of the Act applies, the first part thereof shall not apply. As

in this case not only there exists a dispute with regard to the title of the

parties over the passage and the passage, itself, having not found the part of

the compromise, we do not find any infirmity in the impugned judgment.

     The appeal is accordingly dismissed with costs.           Counsel’s fee

assessed at Rs. 25,000/-.

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                   ...............................J.                     [S.B. Sinha]

                   ................................J.                     [Lokeshwar Singh Panta] New Delhi; May 14, 2008