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CS Professional · Drafting, Pleadings and Appearances · Drafting of Agreements, Deeds and Documents

Sunrise Pvt Ltd executes a registered sale deed of a godown for Rs 40 lakh in favour of Dev. Earlier it orally agreed to sell the same godown to Imran and, following that agreement, handed over possession to him, which constituted a valid transfer under the applicable law. Dev claims priority because his deed is registered. What is the position under the Registration Act, 1908?

Imran's position can prevail. The registered-document rule gives way where the oral agreement was accompanied or followed by delivery of possession and the same constitutes a valid transfer under law. Since Imran received possession amounting to a valid transfer, Dev cannot rely solely on registration.

  1. ADev prevails automatically because his document is registered
  2. BImran's oral agreement can prevail, because it was followed by delivery of possession constituting a valid transferCorrect
  3. CBoth are void because oral agreements about immovable property are banned
  4. DImran prevails only if he registers the oral agreement later

Explanation

Section 48 gives a registered non-testamentary document effect against oral agreements unless the agreement was accompanied or followed by delivery of possession and constitutes a valid transfer under law. Both conditions are met for Imran, so Dev cannot rely on registration alone. Registering an oral agreement is not the test.

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