The Madras High Court (Madurai Bench) affirmed the trial court's decree granting specific performance of a resale agreement while rejecting claims of forgery and limitation, clarifying that unregistered agreements affecting immovable property can be received as evidence under the proviso to Section 49 of the Registration Act, 1908, and that the burden to prove forgery rests squarely on the challenger.
Background & Facts
The Dispute
The suit arose from a transaction concerning agricultural properties in Kullapuram Village, Periakulam Taluk, Theni District. On 05.03.2015, the plaintiffs (respondents herein) executed a sale deed in favour of the defendant (appellant herein) for a sum of Rs. 17,44,100/- in respect of the suit properties. Simultaneously, the parties executed a resale agreement (Ex.A.2) whereby the plaintiffs agreed to pay Rs. 20,00,000/- within three years to obtain a deed of resale from the defendant. The suit properties were valued at over Rs. 2 crores.
Key Facts
- The sale deed (Ex.A.1) was executed for Rs. 17,44,100/- on 05.03.2015, with Rs. 9,00,000/- intended to clear an outstanding bank loan and Rs. 8,44,100/- paid in cash to the plaintiffs.
- The resale agreement (Ex.A.2) was executed on the same day (05.03.2015), stipulating that plaintiffs must pay Rs. 20,00,000/- within three years to secure a resale deed.
- On 25.02.2018, the plaintiffs paid Rs. 1,00,000/- as part consideration, and the defendant executed an endorsement (Ex.A.3) extending the performance period by one year.
- In September 2021, the plaintiffs tendered the balance sale consideration of Rs. 19,00,000/- to the defendant, who evaded performance by demanding Rs. 40,00,000/-.
- A legal notice was issued by the plaintiffs on 25.09.2021, calling the defendant to the Sub Registrar's Office on 29.09.2021 for execution of the resale deed.
- The defendant replied to the notice on 06.10.2021 with false allegations but did not appear as directed.
- The suit for specific performance and permanent injunction was filed by the plaintiffs on 29.10.2021 (O.S.No.233 of 2021).
Procedural History
- 29.10.2021: Original suit filed before the Additional District and Sessions Judge, Periyakulam (O.S.No.233 of 2021).
- 23.08.2023: Trial court pronounced judgment and decree, holding that the suit was not barred by limitation, Ex.A.2 and Ex.A.3 were admissible in evidence, plaintiffs had established the resale agreement, and granted specific performance but denied permanent injunction (as defendant was in joint possession).
- 08.10.2026: Present judgment pronounced by the Madras High Court (Madurai Bench) dismissing the appeal.
Relief Sought
The appellant/defendant sought to set aside the trial court's judgment and decree dated 23.08.2023, dismiss the suit for specific performance, and contend that the suit was barred by limitation, the resale agreement and endorsement were forged, and Arivalagan (husband of the 5th plaintiff) was a necessary party not joined.
The Legal Issue
The central questions were: (1) Whether an unregistered resale agreement and endorsement affecting immovable property can be received as evidence in a suit for specific performance under the proviso to Section 49 of the Registration Act, 1908; (2) Whether the burden of proof for allegations of forgery lies on the challenger or the document holder; (3) Whether the suit for specific performance was barred by limitation given the timeline of the resale agreement, endorsement, and filing of suit; and (4) Whether non-joinder of Arivalagan, alleged to be a necessary party, fatally impaired the plaintiffs' case.
Arguments Presented
For the Appellant/Defendant
The appellant contended that the resale agreement (Ex.A.2) and endorsement (Ex.A.3) were unregistered and thus inadmissible as evidence for transferring immovable property, relying on Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana (2011) and R.Palanisubramanian v. M/s. Trans Medica (India) Ltd. (2026 Supreme Mad 962) to argue that Section 17(1-A) of the Registration Act, 1908, mandates compulsory registration for documents executed after the 2001 amendment, rendering unregistered agreements ineffective for Section 53A of the Transfer of Property Act, 1882. The appellant further asserted that Ex.A.2 and Ex.A.3 were forged, placing the burden of proof on the plaintiffs to substantiate execution, and claimed the suit was barred by limitation as the three-year period for specific performance expired before filing. Additionally, the appellant argued that Arivalagan (husband of the 5th plaintiff) was a necessary party not joined, as his involvement in the alleged loan transaction was central to the dispute.
For the Respondent/Plaintiffs
The respondents countered that the defendant had admitted the execution of Ex.A.2 and Ex.A.3 in his written statement, shifting the burden of proving forgery to the challenger under Section 103 of the Indian Evidence Act. They relied on R.Hemalatha v. Kashthuri ((2023) 10 SCC 725) and Muruganandam v. Muniyandi (Civil Appeal No. 6543 of 2025) to assert that the proviso to Section 49 of the Registration Act, 1908, allows unregistered agreements affecting immovable property to be received as evidence in specific performance suits. Regarding limitation, they argued that the limitation period commenced from 25.02.2019 (end of the extended period via Ex.A.3), and the suit filed on 29.10.2021 was well within the three-year window, further bolstered by Supreme Court guidelines during the COVID-19 pandemic. Finally, they maintained that non-joinder of Arivalagan was not fatal as the defendant had expressly admitted knowing Arivalagan and his role in the society.
The Court's Analysis
The Court began by addressing the non-joinder argument, holding that the defendant's admission in his written statement that he knew Arivalagan and his position in the society negated any claim of fatal non-joinder. It emphasized that mere admission of knowledge suffices to defeat such a plea, and the plaintiffs were not required to examine Arivalagan as a witness.
On the allegation that Ex.A.1 was acted upon, the Court found the plaintiffs' consistent stance - that the sale deed was executed solely as security for the loan - uncontradicted by the defendant. The Court noted that the defendant neither denied this claim nor proved that the suit properties were worth only Rs. 17,44,100/- (as opposed to over Rs. 2 crores), reinforcing that Ex.A.1 served only as security.
Regarding forgery, the Court squarely placed the burden on the appellant/defendant as the challenger, citing Section 103 of the Indian Evidence Act and affirming the principle that "a party setting up the plea of forgery must prove the same." It observed that the defendant had not taken any proactive steps - such as obtaining a forensic handwriting expert opinion under Sections 45 and 73 of the Evidence Act or filing a police complaint - to substantiate his forgery claim. The Court relied on the plaintiffs' examination of the attestor (P.W.2) as proof of the endorsement's validity, concluding that the defendant had "miserably failed to prove the plea of forgery."
On the admissibility of unregistered documents, the Court distinguished R.Palanisubramanian (2026 Supreme Mad 962), noting that case dealt with an agreement for sale executed after the 2001 amendment where Section 53A of the Transfer of Property Act was inapplicable. Here, the resale agreement (Ex.A.2) and endorsement (Ex.A.3) were executed in 2015 and 2018, respectively - after the omission of Section 53A with effect from 24.09.2001. The Court held that, per R.Hemalatha and Muruganandam, an unregistered agreement for sale can be received as evidence in a specific performance suit under the proviso to Section 49 of the Registration Act, 1908, which exempts such documents from the general bar on affecting immovable property when required to be registered under the 1908 Act or the Transfer of Property Act.
Finally, on limitation, the Court applied Article 54 of the Limitation Act, 1963, calculating the limitation period from 25.02.2019 (the date fixed for performance after the one-year extension via Ex.A.3). As the suit was filed on 29.10.2021 - within three years from 25.02.2019 - the Court held the suit was not barred by limitation, additionally noting the Supreme Court's sui generis guidelines during the pandemic that further relaxed limitation constraints.
The Court concluded that the trial court had correctly appreciated the evidence, applied the law, and granted specific performance while denying permanent injunction (due to joint possession), rendering the appeal unsustainable.
The Verdict
The appeal was dismissed. The trial court's judgment and decree dated 23.08.2023, granting specific performance of the resale agreement but denying permanent injunction, were confirmed. No costs were awarded. The suit properties remain subject to the resale agreement terms, with the plaintiffs entitled to enforce specific performance upon tendering the balance consideration of Rs. 19,00,000/- as deposited in court.
What This Means For Similar Cases
Burden of Proof in Forgery Allegations Lies Squarely on the Challenger
Practitioners must note that when a document's authenticity is challenged, the burden to prove forgery does not shift to the document holder. The challenger must adduce affirmative evidence - such as forensic handwriting expert opinions or police complaints - to substantiate the claim. Mere allegations or reliance on the opponent's failure to prove execution are insufficient. This principle applies universally across civil disputes involving document authenticity.
Unregistered Agreements Retain Evidentiary Value in Specific Performance Suits
An unregistered agreement to sell immovable property, even if executed after the 2001 amendment to the Registration Act, can be received as evidence in a suit for specific performance under the proviso to Section 49 of the Registration Act, 1908. Lawyers should no longer assume that lack of registration automatically bars relief; instead, they must assess whether the proviso applies (i.e., whether the document affects immovable property and is required to be registered under the 1908 Act or Transfer of Property Act). This expands the scope of enforceable agreements in property transactions.
Limitation Period Calculation Requires Precise Tracking of Extended Timelines
For specific performance suits, the limitation period under Article 54 of the Limitation Act, 1963, commences from the date fixed for performance in the agreement. If extensions are granted via endorsed agreements (like Ex.A.3), the limitation period starts from the expiry of the extended term. Counsel must meticulously trace all extensions and performance dates to avoid premature limitation pleas, especially where parties have conducted part performance or issued legal notices indicating ongoing willingness to perform.
