Supreme Court of India
MUKESHversusTHE STATE OF MADHYA PRADESH & ANR
- Citation
- 2024 INSC 1026
- Decided
- 19 December 2024
- Disposal
- Appeal(s) allowed
- Bench
- B PARDIWALA
Holding
A compromise decree that merely confirms a pre‑existing right over the subject land does not require registration and is exempt from stamp duty, and mutation must be effected in favour of the appellant.
Summary
The appellant, Mukesh, filed a suit claiming ownership and long possession of a small parcel of land in Madhya Pradesh and obtained a compromise decree confirming his pre‑existing right. The decree was used to seek mutation of the land in his name, but the Collector of Stamps levied stamp duty on the basis of Article 22 of Schedule I‑A, and the High Court upheld that the decree required registration and stamp duty. The appellant challenged this, arguing that the decree merely affirmed a pre‑existing right and fell within the exemption under Section 17(2)(vi) of the Registration Act, 1908, and that court orders are not chargeable under the Indian Stamp Act, 1899. The Supreme Court examined the statutory provisions and prior case law, concluding that a bona‑fide compromise decree that does not create a new right is exempt from compulsory registration and stamp duty. Consequently, the Court set aside the High Court’s order, directed mutation of the revenue records in favour of the appellant, and allowed the appeal.
Issues considered
- Whether a compromise decree confirming a pre‑existing right over immovable property requires compulsory registration under the Registration Act, 1908.
- Whether stamp duty is payable on such a compromise decree for the purpose of mutation under the Indian Stamp Act, 1899.
- Whether revenue records constitute documents of title.
- Whether the compromise decree was obtained by collusion to evade stamp duty.
Legislation cited
- Indian Stamp Act, 1899s. 3, s. 33
- Limitation Act
- Registration Act, 1908s. 17(1), s. 17(2)(vi)
Headnote
Issue for Consideration Whether the High Court was right in holding that the compromise decree in favor of the appellant needed registration and stamp duty was also required to be paid for mutation of the subject land. Headnotes† Registration Act, 1908 – s.17(2)(vi) – Indian – Whether the appellant satisfied the conditions enumerated in s.17(2)(vi), 1908 Act and the compromise decree in his favor only asserting his pre-existing rights over the subject land required no registration and was not chargeable with stamp duty: Held: s.17(1), 1908 Act specifies the
Subjects
Consent decreeCompromise decreeRegistrationOrder/decree of the CourtStamp dutyMutationRevenue recordsPre‑existing rightTitleInterestSuit for declarationPermanent injunctionCollusionDocuments/instrumentsNot compulsorily registerableCollector of StampsDocuments of titleAdverse possessionConveyanceNo new right created
Judgment
[2024] 12 S.C.R. 1210 : 2024 INSC 1026
Mukesh
v.
The State of Madhya Pradesh & Anr.
(Civil Appeal No. 14808 of 2024)
20 December 2024
[J.B. Pardiwala and R. Mahadevan,* JJ.]
Issue for Consideration
Whether the High Court was right in holding that the compromise
decree in favor of the appellant needed registration and stamp
duty was also required to be paid for mutation of the subject land.
Headnotes†
Registration Act, 1908 – s.17(2)(vi) – Indian Stamp Act,
1899 – s.3; Schedule I or I-A – Whether the appellant satisfied
the conditions enumerated in s.17(2)(vi), 1908 Act and the
compromise decree in his favor only asserting his pre-existing
rights over the subject land required no registration and was
not chargeable with stamp duty:
Held: s.17(1), 1908 Act specifies the documents for which
Registration is compulsory – s.17(2) carves out the exceptions and
the documents/instruments enumerated therein are not compulsorily
registerable – The exemption for decree or order of the Court is
covered under s.17(2)(vi), 1908 Act with a rider – Suit was filed by
the appellant seeking a declaration asserting his pre-existing right,
title and interest and for permanent injunction claiming ownership
and continuous possession over the subject land – Thereafter, in
terms of the compromise entered into between the parties, the
suit was decreed in favour of the appellant – Hence, through the
compromise decree in question, the appellant did not obtain any
new right, but he asserted his pre-existing right/title/interest over
the subject land of which he was in continuous possession – Also,
the plea that the compromise decree was by way of collusion is
rejected – Thus, the appellant satisfied the conditions enumerated
in s.17(2)(vi), 1908 Act and hence, the subject land acquired by him
* Author
[2024] 12 S.C.R. 1211
Mukesh v. The State of Madhya Pradesh & Anr.
by way of compromise decree, required no registration – Further,
s.3, Indian Stamp Act, 1899 provides the instruments which are
chargeable with duty – Stamp duty is not chargeable on an order/
decree of the Court as the same does not fall within the documents
mentioned in Schedule I or I-A read with s.3, Indian Stamp Act,
1899 – Though the Collector of Stamps determined the stamp
duty for the subject land as per Article 22 of Schedule IA, 1899
Act, which states about conveyance, in this case, the compromise
decree does not fall under the instruments mentioned in the
Schedule and it only asserted the pre-existing rights – Therefore,
the consent decree will not operate as conveyance as no right
was transferred and the same does not require any payment of
stamp duty – Since the appellant only asserted the pre-existing
right and no new right was created through the consent decree,
the document pertaining to mutation of the subject land was not
liable for stamp duty – Impugned order upholding the orders of
the authorities below, set aside – Mutation of the revenue records
in respect of the subject land be made in favour of the appellant.
[Paras 7, 11, 13, 14]
Registration Act, 1908 – s.17(2)(vi) – Exception under –
Conditions to be satisfied for – Enumerated. [Para 10]
Title – Revenue records – Whether revenue records are
documents of title:
Held: No, revenue records are not documents of title – Any entry
therein does not ipso facto confer ownership. [Para 11]
Case Law Cited
Mohd. Yusuf v. Rajkumar [2020] 3 SCR 649 : (2020) 10 SCC
264; Ravinder Kaur Grewal and Others v. Manjit Kaur and Others
[2019] 11 SCR 74 : (2019) 8 SCC 729; Khushi Ram v. Nawal
Singh [2021] 4 SCR 1019 : (2021) 16 SCC 279; Ripudaman
Singh v. Tikka Maheshwar Chand [2021] 6 SCR 562 : (2021) 7
SCC 446 – relied on.
Bhoop Singh v. Ram Singh Major [1995] Supp. 3 SCR 466 :
(1995) 5 SCC 709 – referred to.
List of Acts
Registration Act, 1908; Indian Stamp Act,1899.
1212 [2024] 12 S.C.R.
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List of Keywords
Consent decree/Compromise decree; Registration; Order/decree
of the Court; Stamp duty; Mutation; Revenue records; Pre-existing
right/title/interest over subject land; Right afresh; Suit for declaration
and permanent injunction; Collusion; Documents/instruments; Not
compulsorily registerable; Collector of Stamps; Documents of
title; Exception of Section 17(2)(vi) of the Registration Act, 1908;
Long and continuous possession; Continuous and uninterrupted
adverse possession; Conveyance; No right transferred; No new
right created through the consent decree.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14808 of 2024
From the Judgment and Order dated 06.12.2019 of the High Court
of Madhya Pradesh at Indore in MP No. 3317 of 2019
Appearances for Parties
Puneet Jain, Sr. Adv., Ms. Christi Jain, Manna Arora, Ms. Akriti
Sharma, Harsh Jain, Om Sudhir Vidyarthi, Ojusya Joshi, Advs.
for the Appellant.
V.V.V. Pattabhiram, D.A.G., Ms. Mrinal Gopal Elker, Rajan
Chourasia, Chinmoy Chaitanya, Advs. for the Respondents.
Judgment/Order of the Supreme Court
Judgment
R. Mahadevan, J.
1. Leave granted.
2. This appeal has been filed against the Order dated 06.12.2019
passed by the High Court of Madhya Pradesh, Bench at Indore1 in
dismissing the Miscellaneous Petition bearing No.3317 of 2019 filed
by the appellant herein. By the said order, the High Court upheld
the order dated 23.08.2016 passed by the Collector of Stamps,
determining stamp duty at Rs.6,67,500/- payable by the appellant
1 Hereinafter referred to as “the High Court”
[2024] 12 S.C.R. 1213
Mukesh v. The State of Madhya Pradesh & Anr.
qua land in Survey No.2087, 2088/9/1/1 measuring an extent of
0.076 Ares situated at Village Kheda, Tehsil Badnawar, District Dhar,2
acquired by him by way of consent decree, as affirmed by the Board
of Revenue by order dated 12.02.2019.
3. Originally, the appellant had filed a Civil Suit bearing No.47-A/2013
before the Court of First Civil Judge, Class-2, Badnawar, for declaration
and permanent injunction against one Abhay Kumar (Respondent
No.2 herein) and the State of Madhya Pradesh (Respondent No.1
herein) stating that he is the owner of the subject land and is in long
and continuous possession of the same by doing cultivation. It was
alleged in the said suit that in the year 2013, the Respondent No.2
herein, who is the adjacent land owner of the appellant, attempted
to sell the subject land to third parties, thereby dispossessing the
appellant from the same. Pending the suit, both the parties entered
into a compromise, based on which, the suit came to be decreed in
favour of the appellant, on 30.11.2013 and the Respondent No.1 -
State of Madhya Pradesh did not raise any objection nor filed any
appeal against the said compromise decree. In terms of the said
order dated 30.11.2013, the appellant applied for mutation of the
said land before the Tehsildar concerned, who in turn referred the
case to the Collector of Stamps, District Dhar (M.P). Upon perusal
of the records, the Collector of Stamps initiated proceedings under
Section 33 of the Indian Stamp Act, 1899, and consequently directed
the appellant to pay a sum of Rs.6,67,500/- towards stamp duty, by
order dated 23.08.2016. Challenging the said order, the appellant
preferred a revision, which was dismissed by the Board of Revenue,
Gwalior, Madhya Pradesh, vide order dated 12.02.2019. Aggrieved
by the same, the appellant preferred Miscellaneous Petition No.3317
of 2019 to quash the said orders passed by the Collector of Stamps
as well as the Board of Revenue. By the order impugned herein,
the High Court dismissed the said Miscellaneous Petition, relying
on its earlier order dated 24.07.2019 passed in M.P.No.3634 of
2019,3 wherein, reference was made to (i)the decision of this Court
in Bhoop Singh v. Ram Singh Major,4 in which, it was held that ‘if a
compromise decree is obtained as a device to obviate payment of
2 Hereinafter referred to as “the subject land”
3 Siddhulal Kachi v. State of Madhya Pradesh and another
4 [1995] Supp. (3) SCR 466 : (1995) 5 SCC 709
1214 [2024] 12 S.C.R.
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stamp duty and frustrate the latter requirement of registration, then
such a decree is required to be registered under the Registration Act
and as a consequence thereof, the stamp duty is also payable’; and
(ii) the order of the High Court dated 13.02.2017 in WP No.2170 of
2015;5 and ultimately, it was held that the consent decree obtained
in the suit, through which, new right was created over the property,
needs registration and for this reason, stamp duty is also required
to be paid. Being dissatisfied with the same, this appeal came to be
filed by the appellant before this court.
4. According to the learned counsel for the appellant, the issue involved
in this matter is squarely covered by the judgment of this Court in
Mohd. Yusuf v. Rajkumar,6 wherein, the order dated 13.02.2017
passed in W.P.No.2170/2015 relied on by the High Court in the order
dated 24.07.2019 passed in M.P.No.3634 of 2019, based on which,
the order impugned herein came to be passed by the High Court,
has been set aside, by holding that a compromise decree does not
require registration. It was further clarified in the said judgment that
‘a compromise decree comprising immovable property other than which
is the subject matter of the suit or proceeding requires registration,
although any decree or order of a court is exempted from registration
by virtue of Section 17(2)(vi) of the Registration Act, 1908’.
4.1. Adding further, the learned counsel submitted that the High Court
erred in placing reliance on its earlier order dated 24.07.2019
made in M.P.No.3634/2019 (Siddhulal case), as the facts of the
present case are clearly distinguishable from the facts of that
case. Siddhulal case was arising out of a suit for declaration on
the basis of adverse possession and that, by way of consent
decree, new right was created over the property, whereas the
appellant herein preferred the suit for declaration and permanent
injunction on the basis of his long and continuous ownership
and possession of the subject land and he acquired pre-existing
right over the same through consent decree.
4.2. It is also submitted by the learned counsel that there was no
finding of collusion between the appellant and Respondent
No.2 by any Court.
5 Mohd. Yusuf and others v. Rajkumar and others
6 [2020] 3 SCR 649 : (2020) 10 SCC 264
[2024] 12 S.C.R. 1215
Mukesh v. The State of Madhya Pradesh & Anr.
4.3. The learned counsel further submitted that court orders or
decrees are not chargeable with stamp duty unless they fall
under specific categories of instruments enumerated in Schedule
I read with section 3 of the Indian Stamp Act, 1899. In the
present case, the consent decree in favor of the appellant is
not chargeable with stamp duty, as it does not create any new
right, but it conveys the pre-existing title, right or interest over
the subject land.
4.4. Thus, according to the learned counsel, the order of the High
Court upholding the order of the Collector of Stamps as affirmed
by the Board of Revenue, determining stamp duty under Article
22A of Schedule 1A of the Indian Stamp Act, 1899, and for
recovery of the same from the appellant, is illegal and contrary
to law and is hence, liable to be set aside.
5. On the other hand, the learned counsel for the Respondent No.1
submitted that during the pendency of the civil suit, the appellant and
Respondent No. 2 mutually agreed to enter into a compromise and
accordingly, presented an application to refer the case to National
Lok Adalat and a compromise decree was passed on 30.11.2013
in Civil Suit No.47A/2013, by which, the Respondent No.2 was
restrained from interfering with the appellant’s possession over the
subject land and the appellant was entitled to get his name recorded
in the revenue records in respect of the subject land.
5.1. It is further submitted that based on the reference made by
the Tehsildar, Badnawar District, Dhar (MP), the Collector of
Stamps initiated proceedings under section 33 of the Indian
Stamp Act, 1899 and vide order dated 23.08.2016, directed
the appellant to pay a sum of Rs.6,67,500/- towards stamp
duty as per the market value of the subject land. According
to the learned counsel, the Collector of Stamps has not gone
into the question of registration, but has determined the stamp
duty payable by the appellant for the subject land, which was
also rightly affirmed by the Board of Revenue, by order dated
12.02.2019 in the revision preferred by the appellant.
5.2. The learned counsel further submitted that admittedly, the
subject land was not recorded in the name of the appellant in the
revenue records maintained by the State and there was a dispute
regarding title of the property. As such, the protection claimed
1216 [2024] 12 S.C.R.
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by the appellant under Section 17(2)(vi) of the Registration Act,
1908, does not hold good.
5.3. That apart, it is contended by the learned counsel that the present
case seems to be a case of collusion between the appellant
and Respondent No.2 and the Civil Suit was instituted only with
an intent to evade the payment of stamp duty.
5.4. The learned counsel for the Respondent No.1 ultimately
submitted that in view of the settled legal position and taking
note of the facts and circumstances indicated above, the decision
in Mohd. Yusuf v. Rajkumar [(2020) 10 SCC 264] is factually
distinguishable and therefore, the appellant is liable to pay
stamp duty against mutation of the subject land.
5.5. Thus, according to the learned counsel, the order passed by
the High Court is a well-considered one and the same does not
require any interference in the hands of this Court.
6. We have heard the learned counsel for the appellant and the learned
counsel for the Respondent No.1 and also perused the materials
available on record. Despite service of notice, none appeared on
behalf of the Respondent No.2.
7. There are two issues involved herein viz., Registration of the document
and payment of stamp duty, which are separate and distinct concepts.
As regards the issue of registration, we may refer to Section 17 of
the Registration Act, 1908,7 which deals with the documents of which
registration is compulsory and the same reads as follows:
“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) instruments of gift of immovable property;
7 For short, “the Act, 1908”
[2024] 12 S.C.R. 1217
Mukesh v. The State of Madhya Pradesh & Anr.
(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
(d) leases of immovable property from year to year, or for
any term exceeding one year, or reserving a yearly rent;
[(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.
[(1A) The documents containing contracts to transfer for
consideration, any immovable property for the purpose
of section 53A of the Transfer of Property Act, 1882 (4
of 1882) shall be registered if they have been executed
on or after the commencement of the Registration and
Other Related laws (Amendment) Act, 2001 (48 of 2001)
and if such documents are not registered on or after such
commencement, then, they shall have no effect for the
purposes of the said section 53A.]
(2) Nothing in clauses (b) and (c) of sub-section (1)
applies to—
(i) any composition deed; or
1218 [2024] 12 S.C.R.
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(ii) any instrument relating to shares in a joint stock
Company, notwithstanding that the assets of such Company
consist in whole or in part of immovable property; or
(iii) any debenture issued by any such Company and not
creating, declaring, assigning, limiting or extinguishing any
right, title or interest, to or in immovable property except
in so far as it entitles the holder to the security afforded
by a registered instrument whereby the Company has
mortgaged, conveyed or otherwise transferred the whole
or part of its immovable property or any interest therein to
trustees upon trust for the benefit of the holders of such
debentures; or
(iv) any endorsement upon or transfer of any debenture
issued by any such Company; or
(v) [any document other than the documents specified in
sub-section (1A)] not itself creating, declaring, assigning,
limiting or extinguishing any right, title or interest of
the value of one hundred rupees and upwards to or in
immovable property, but merely creating a right to obtain
another document which will, when executed, create,
declare, assign, limit or extinguish any such right, title or
interest; or
(vi) 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]; or
(vii) any grant of immovable property by [Government]; or
(viii) any instrument of partition made by a Revenue-
Officer; or
(ix) any order granting a loan or instrument of collateral
security granted under the Land Improvement Act, 1871,
or the Land Improvement Loans Act, 1883; or
(x) any order granting a loan under the Agriculturists, Loans
Act, 1884, or instrument for securing the repayment of a
loan made under that Act; or
[2024] 12 S.C.R. 1219
Mukesh v. The State of Madhya Pradesh & Anr.
[(xa) any order made under the Charitable Endowments
Act, 1890 (6 of 1890), vesting any property in a Treasurer
of Charitable Endowments or divesting any such Treasurer
of any property; or]
(xi) any endorsement on a mortgage-deed acknowledging
the payment of the whole or any part of the mortgage-
money, and any other receipt for payment of money due
under a mortgage when the receipt does not purport to
extinguish the mortgage; or
(xii) any certificate of sale granted to the purchaser of any
property sold by public auction by a Civil or Revenue-
Officer.
[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
whole or any part of the purchase money.]
(3) Authorities to adopt a son, executed after the 1st day
of January, 1872, and not conferred by a will, shall also
be registered.”
It is thus, clear from the above that Section 17(1) of the Act, 1908
specifies the documents for which Registration is compulsory. Sub-
section (2) of Section 17 carves out the exceptions. The documents/
instruments enumerated in sub-section (2) of section 17 are not
compulsorily registerable. The exemption for decree or order of the
Court is covered under section 17(2)(vi) of the Act, 1908 with a rider.
Under the said provision, any decree or order of a Court (except the
decree or order expressed to be made on compromise and comprising
immovable property other than that which is the subject-matter of
the suit or proceedings) would not require compulsory registration.
Section 17(2)(vi) carves out the distinction between the property
which forms subject-matter of the suit and the property that was
not the subject-matter of the suit, but for which a compromise has
been arrived at. It would be relevant to point out that the provision
permitting the compromise between the parties to include in the
1220 [2024] 12 S.C.R.
Supreme Court Reports
compromise decree, the subject matter not forming part of the suit
property was introduced with effect from 01.02.1977. Prior to that, the
compromise decree can be passed only with respect to properties or
subject matter of suit. If a compromise decree involves immovable
property other than the property for which a decree is prayed for, such
a property would not be exempted and would require registration. This
condition or the exclusion clause was introduced in the Registration
Act, 1908 by Act 21 of 1929 by substituting for “and any award”. To
avail the exemption from the mandate of compulsory registration of
documents conveying immovable property of a value of more that
Rs 100/-, the compromise decree arrived must be only in respect of
the property that is the subject-matter of the suit. The compromise
arrived at before the Lok Adalat and the award passed by the Lok
Adalat thereto assume the character of a decree passed under Order
XXIII Rule 3 and would also come within the ambit and purview of
sub-section (2) of section 17 of the Act, 1908.
8. In the present case, seemingly, the appellant preferred Civil Suit No.
47-A/2013 against the respondents for declaration and permanent
injunction claiming ownership and continuous possession over the
subject land, and the same came to be decreed in favour of him, in
view of the compromise arrived at between the appellant and the
Respondent No.2 on 30.11.2013. For better appreciation, the order
passed in the said suit is extracted below:
Order Dt. 30.11.13
Both parties having presented an application have
requested to take up the case in National Lok Adalat for
disposal.
On the request of both parties this case was taken up
today in National Lok Adalat.
Sh. M.P. Sharma Advocate is present with the plaintiff.
Defendant is present in person.
Compromise application presented on behalf of both parties
was taken into consideration.
Both parties were identified by Sh.M.P. Sharma Advocate.
Case record was perused.
[2024] 12 S.C.R. 1221
Mukesh v. The State of Madhya Pradesh & Anr.
It appears from the perusal of case records that according
to compromise application, this suit is admitted by
Def. No.1. Plaintiff is in possession over Land Survey
No.2087/2088/9/1/1/ measuring 0.076 Ares situated at
Village Kheda. Defendant shall not interfere with the
possession of plaintiff over aforesaid lands. Plaintiff shall
be entitled to get his name recorded in revenue records
over aforesaid lands in place of defendant.
Both parties have expressed to have voluntarily entered
into this compromise. Therefore, this compromise is hereby
allowed as per Ex.P-1. In context of compromise, both
parties have got their statements recorded. Decree be
prepared in accordance with compromise. Compromise
shall be an integral part of this decree.…”
In view of the above, the appellant is entitled to possession of the
subject land and the Respondent No.2 shall not interfere with the
same; and the appellant is entitled to get his name recorded in the
revenue records in respect of the subject land in the place of the
Respondent No.2. Pertinently, it is to be pointed out that the said
compromise decree has not been challenged by the Respondent
No.1 before any Court of law and hence, the same attained finality
and is binding on the parties.
9. It is further seen that on the strength of the compromise decree
passed by the civil court, the appellant approached the Tehsildar for
mutation of the subject land in his favour. However, the Tehsildar
referred the case to the Collector of Stamps, who after examination,
determined the stamp duty under Article 22 of Schedule IA of the
Indian Stamp Act, 1899 and directed the appellant to pay a sum of
Rs.6,67,500/- in the Government Treasury. The said order of the
Collector of Stamps was affirmed by the Board of Revenue, in the
revision filed by the appellant. The High Court has also upheld the
orders so passed by the authorities below, by order dated 06.12.2019,
which is impugned in this appeal.
10. Evidently, the High Court passed the impugned order by observing
that the compromise decree needs registration and stamp duty is also
required to be paid for mutation of the subject land. While so, reliance
was made on its earlier order dated 24.07.2019 in M.P.No.3634 of
2019 (Siddhulal case), in which, two decisions were referred to, viz.,
1222 [2024] 12 S.C.R.
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(i)the order of this Court in Bhoop Singh (supra) and (ii)the order
passed by the High Court dated 13.02.2017 in W.P.No.2170 of 2015
in Mohd. Yusuf (supra). It is worth mentioning at this juncture that
the said order of the High Court dated 13.02.2017 in W.P.No.2170 of
2015 was subsequently, challenged by filing Civil Appeal No.800 of
20208 and this Court vide judgment dated 05.02.20109, after having
found that pre-existing right through adverse possession existed,
has categorically held that a compromise decree does not require
registration and accordingly, set aside the said order of the High
Court. While so, the decision of this Court in Bhoop Singh (supra)
was also elaborately discussed. The relevant portions of the said
judgment are reproduced below for ready reference:
“6. Under Section 17(1)(b), 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 requires registration. The word “instrument” is
not defined in the Registration Act, but is defined in the
Stamp Act, 1899 by Section 2(14).
7. A compromise decree passed by a court would ordinarily
be covered by Section 17(1)(b) but sub-section (2) of
Section 17 provides for an exception for 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. Thus, by virtue of sub-section (2)
(vi) of Section 17 any decree or order of a court does
not require registration. In sub-clause (vi) of sub-section
(2), one category is excepted from sub-clause (vi) i.e. 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. Thus, by
conjointly reading Section 17(1)(b) and Section 17(2)
(vi), it is clear that a compromise decree comprising
8 Arising out of SLP (C) No.32799 of 2019)
9 Mohammade Yusuf & others v. Rajkumar & others (2020) 10 SCC 264
[2024] 12 S.C.R. 1223
Mukesh v. The State of Madhya Pradesh & Anr.
immovable property other than which is the subject-
matter of the suit or proceeding requires registration,
although any decree or order of a court is exempted
from registration by virtue of Section 17(2)(vi). A copy
of the decree passed in Suit No. 250-A of 1984 has been
brought on record as Annexure P-2, which indicates that
decree dated 4-10-1985 was passed by the Court for the
property, which was subject-matter of the suit. Thus, the
exclusionary clause in Section 17(2)(vi) is not applicable
and the compromise decree dated 4-10-1985 was not
required to be registered on plain reading of Section 17(2)
(vi). The High Court referred to judgment of this Court in
Bhoop Singh Vs. Ram Singh Major and Others, (1995)
5 SCC 709, in which case, the provision of Section 17(2)
(vi) of Registration Act came for consideration. This Court
in the above case while considering clause (vi) laid down
following in paragraphs 16, 17 and 18:-
“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.
1224 [2024] 12 S.C.R.
Supreme Court Reports
18. The legal position qua clause (vi) can, on the basis of
the aforesaid discussion, be summarised as below:
(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.
(3) If the decree were not to attract any of the clauses
of sub-section (1) of Section 17, as was the position in
the aforesaid Privy Council and this Court’s cases, it is
apparent that the decree would not require registration.
(4) If the decree were not to embody the terms of
compromise, as was the position in Lahore case, benefit
from the terms of compromise cannot be derived, even if
a suit were to be disposed of because of the compromise
in question.
(5) If the property dealt with by the decree be not the
“subject-matter of the suit or proceeding”, clause (vi) of sub-
section (2) would not operate, because of the amendment
of this clause by Act 21 of 1929, which has its origin in
the aforesaid decision of the Privy Council, according to
which the original clause would have been attracted, even
if it were to encompass property not litigated.”
8. In the facts of that case, this Court held that the first
suit cannot really be said to have been decreed on the
basis of compromise, as the suit was decreed “in view
of the written statement filed by the defendant admitting
the claim of the plaintiff to be correct”. Further, the earlier
decree was held to be collusive. Two reasons for holding
that the earlier decree in the above said case required
registration have been mentioned in paragraph 19 of the
judgment, which is to the following effect:-
[2024] 12 S.C.R. 1225
Mukesh v. The State of Madhya Pradesh & Anr.
“19. Now, let us see whether on the strength of the decree
passed in Suit No. 215 of 1973, the petitioner could sustain
his case as put up in his written statement in the present
suit, despite the decree not having been registered.
According to us, it cannot for two reasons:
(1) The decree having purported to create right or title in
the plaintiff for the first time that is not being a declaration
of pre-existing right, did require registration. It may also
be pointed out that the first suit cannot really be said to
have been decreed on the basis of compromise, as the
suit was decreed “in view of the written statement filed
by the defendant admitting the claim of the plaintiff to be
correct”. Decreeing of suit in such a situation is covered
by Order 12 Rule 6, and not by Order 23 Rule 3, which
deals with compromise of suit, whereas the former is on
the subject of judgment on admissions.
(2) A perusal of the impugned judgment shows that the first
appellate court held the decree in question as ‘collusive’
as it was with a view to defeat the right of others who
had bona fide claim over the property of Ganpat. Learned
Judge of the High Court also took the same view.”
9. Following the above judgment of Bhoop S Singh (supra),
the High Court held that since the compromise decree
dated 04.10.1985 did not declare any pre-existing right
of the plaintiff, hence it requires registration. The High
Court relied on the judgment of Gurdwara Sahib Vs. Gram
Panchayat Village Sirthala and Another (supra) and made
following observations in paragraphs 10, 11 and 12: -
“10. In the present case, in the earlier suit CS No.250-A/1984
the petitioner had claimed declaration of title on the plea
of adverse possession and the compromise decree was
passed in the suit. The very fact that the suit was based
upon the plea of adverse possession reflects that the
petitioner had no pre-existing title in the suit property. Till
the suit was decreed, the petitioner was a mere encroacher,
at the most denying the title of lawful owner.
1226 [2024] 12 S.C.R.
Supreme Court Reports
11. The Supreme Court in the matter of Gurudwara Sahib
Vs. Gram Panchayat Village Sirthala reported in 2014(3)
MPLJ 36 has settled that declaratory decree based on plea
of adverse possession cannot be claimed and adverse
possession can be used only as shield in defence by the
defendant. It has been held that:- (SCC p.673, paras 7-8)
“7. In the Second Appeal, the relief of ownership by adverse
possession is again denied holding that such a suit is not
maintainable.
8. There cannot be any quarrel to this extent the judgments
of the courts below are correct and without any blemish.
Even if the plaintiff is found to be in adverse possession,
it cannot seek a declaration to the effect that such
adverse possession has matured into ownership. Only
if proceedings filed against the appellant and appellant
is arrayed as defendant that it can use this adverse
possession as a shield/defence.”
12. The plea of the petitioner based upon Sec.27 of the
Limitation Act is found to be devoid of any merit since it
relates to the extinction of the right of the lawful owner after
expiry of the Limitation Act, but in view of the judgment
of the supreme court in the matter of Gurudwara Sahib
(supra), the petitioner cannot claim himself to be the owner
automatically after the expiry of the said limitation.”
10. The judgment of Gurdwara Sahib Vs. Gram Panchayat
Village Sirthala and Another (supra) has now been
expressly overruled by a Three Judge Bench judgment
in Ravinder Kaur Grewal and Others Vs. Manjit Kaur and
Others, (2019) 8 SCC 729. This Court held in the above
case in paragraph 62 that once 12 years’ period of adverse
possession is over, even owner’s right to eject him is lost
and the possessory owner acquires right, title and interest
possessed by the outgoing person/owner.
11. In para 62, following has been laid down: (Ravinder
Kaur Grewal case, SCC pp.778-78)
“62. We hold that a person in possession cannot be ousted
by another person except by due procedure of law and
[2024] 12 S.C.R. 1227
Mukesh v. The State of Madhya Pradesh & Anr.
once 12 years’ period of adverse possession is over,
even owner’s right to eject him is lost and the possessory
owner acquires right, title and interest possessed by
the outgoing person/owner as the case may be against
whom he has prescribed. In our opinion, consequence
is that once the right, title or interest is acquired it can
be used as a sword by the plaintiff as well as a shield
by the defendant within ken of Article 65 of the Act and
any person who has perfected title by way of adverse
possession, can file a suit for restoration of possession in
case of dispossession. In case of dispossession by another
person by taking law in his hand a possessory suit can be
maintained under Article 64, even before the ripening of
title by way of adverse possession. By perfection of title
on extinguishment of the owner’s title, a person cannot
be remediless. In case he has been dispossessed by the
owner after having lost the right by adverse possession,
he can be evicted by the plaintiff by taking the plea of
adverse possession. Similarly, any other person who might
have dispossessed the plaintiff having perfected title by
way of adverse possession can also be evicted until and
unless such other person has perfected title against such
a plaintiff by adverse possession. Similarly, under other
articles also in case of infringement of any of his rights, a
plaintiff who has perfected the title by adverse possession,
can sue and maintain a suit.”
12. In para 61, this Court has expressly overruled the
Gurdwara Sahib Vs. Gram Panchayat Village Sirthala and
Another (supra).
13. In view of the pronouncement of this Court by the three-
Judge Bench judgment in Ravinder Kaur Grewal v. Manjit
Kaur [(2019) 8 SCC 729: (2019) 4 SCC (Civ) 453], the very
basis of the High Court for holding that compromise deed
dated 4-10-1985 requires registration is knocked out. The
present is not a case where there is any allegation that the
decree dated 4-10-1985 is a collusive decree. The decree
dated 4-10-1985 was in favour of the plaintiff of 7 biswa
land, Survey No. 203 and for remaining land of Survey
No. 203, it was held that it belonged to the defendants.
1228 [2024] 12 S.C.R.
Supreme Court Reports
14. In Bhoop Singh (supra), this Court held that the earlier
decree required registration for the reasons as mentioned
in paragraph 19. The reasons given in paragraph 19 of
the above case has no application in the facts of the
present case.
15. This Court in Som Dev v. Rati Ram [(2006) 10 SCC
788] while explaining Section 17(2)(vi) and Sections 17(1)
(b) and (c) held that all decrees and orders of the Court
including compromise decree subject to the exception as
referred that the properties that are outside the subject-
matter of the suit do not require registration. In para 18,
this Court laid down the following: (SCC p. 800)
“18. … 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.”
16. In the facts of the present case, the decree dated
4-10-1985 was with regard to the property, which was
the subject-matter of the suit, hence not covered by
exclusionary clause of Section 17(2)(vi) and the present
case is covered by the main exception crafted in Section
17(2)(vi) i.e. “any decree or order of a court”. When
registration of an instrument as required by Section
17(1)(b) is specifically excluded by Section 17(2)(vi) by
providing that nothing in clauses (b) and (c) of sub-section
(1) applies to any decree or order of the court, we are of
the view that the compromise decree dated 4-10-1985
did not require registration and the learned Civil Judge
as well as the High Court erred in holding otherwise. We,
thus, set aside the order of the Civil Judge dated 7-1-
2015 as well as the judgment of the High Court dated
13-2-2017 [Mohd. Yusuf v. Rajkumar, 2017 SCC OnLine
MP 2056]. The compromise decree dated 4-10-1985 is
directed to be exhibited by the trial court. The appeal is
allowed accordingly.”
[2024] 12 S.C.R. 1229
Mukesh v. The State of Madhya Pradesh & Anr.
10.1. The judgments in Mohd Yusuf case (supra)10 and Bhoop Singh
(supra) were followed by this court in the following subsequent
decisions:
(i) Khushi Ram v. Nawal Singh:11
“30. This Court in Rajkumar case [Mohd. Yusuf v. Rajkumar,
(2020) 10 SCC 264 : (2021) 1 SCC (Civ) 45] held that since
the decree which was sought to be exhibited was with regard
to the property which was subject-matter of suit, hence, was
not covered by exclusionary clause of Section 17(2)(vi) and
decree did not require registration. The issue in the present
case is squarely covered by the above judgment. We, thus,
conclude that in view of the fact that the consent decree dated
19-8-1991 relates to the subject-matter of the suit, hence it was
not required to be registered under Section 17(2)(vi) and was
covered by exclusionary clause. Thus, we, answer Question 1
that the consent decree dated 19-8-1991 was not registrable
and the courts below have rightly held that the decree did not
require registration.”
(ii) Ripudaman Singh v. Tikka Maheshwar Chand12
16. The judgments of this Court in Bhoop Singh [Bhoop Singh
v. Ram Singh (1995) 5 SCC 709] and K. Raghunandan [K.
Raghunandan v. Ali Hussain Sabir (2008) 13 SCC 102] were
found to be inconsistent in an order reported in Phool Patti v.
Ram Singh [Phool Patti v. Ram Singh (2009) 13 SCC 22] and
the matter was thus referred to a larger Bench. The larger Bench
in the judgment reported as Phool Patti v. Ram Singh [Phool
Patti v. Ram Singh (2015) 3 SCC 465: (2015) 2 SCC (Civ)
312] did not find inconsistencies between the two judgments.
17. Bhoop Singh [Bhoop Singh v. Ram Singh (1995) 5 SCC 709]
was a case dealing with both the situations, decree between the
parties where the decree-holder does not have any pre-existing
right in the property and also the situation where decree-holder
has a pre-existing right. It was the second situation where the
10 (2020) 10 SCC 264
11 [2021] 4 SCR 1019 : (2021) 16 SCC 279
12 [2021] 6 SCR 562 : (2021) 7 SCC 446
1230 [2024] 12 S.C.R.
Supreme Court Reports
decree-holder has a pre-existing right in the property, it was found
that decree does not require registration. In K. Raghunandan
case [K. Raghunandan v. Ali Hussain Sabir (2008) 13 SCC
102], the dispute was not amongst the family members but
between neighbours regarding right over passage. Obviously,
none of them had any pre-existing right over the immovable
property in question.
18. In view of enunciation of law in Bhoop Singh case [Bhoop
Singh v. Ram Singh (1995) 5 SCC 709], we find that the judgment
[Tikka Maheshwar Chand v. Ripudaman Singh, 2016 SCC
OnLine HP 3808] and decree of the High Court holding that
the decree requires compulsory registration is erroneous in law.
The compromise was between the two brothers consequent to
death of their father and no right was being created in praesenti
for the first time, thus not requiring compulsory registration.
Consequently, the appeal is allowed and the suit is decreed.”
Thus, it could be discernible that in order to fall under the exception
of Section 17(2)(vi) of the Act, 1908, the following conditions must
be satisfied:
(i) There must be a compromise decree as per the terms of the
compromise without any collusion;
(ii) The compromise decree must pertain to the subject property
in the suit; and
(iii) There must be a pre-existing right over the subject property,
and the compromise decree should not create a right afresh.
11. There cannot be any doubt that in the civil suit filed by him, the
appellant categorically stated that he is the owner of the subject
land and is in long and continuous possession by doing cultivation
for several years. When the Respondent No.2 sought to disturb the
possession of the appellant by selling the subject land to third parties,
taking advantage of his name standing in the revenue records, the
appellant prayed for declaration and permanent injunction. It is
settled law that revenue records are not documents of title. Any entry
therein will not ipso facto confer ownership. In the present case, the
possession is continuously with the appellant. As per the judgement
of this Court in Ravinder Kaur Grewal and Others v. Manjit Kaur
[2024] 12 S.C.R. 1231
Mukesh v. The State of Madhya Pradesh & Anr.
and Others,13 continuous and uninterrupted adverse possession
would confer right, title and interest and the same can be used as
a sword. Admittedly, the suit has been filed by the appellant seeking
a declaration asserting his pre-existing right, title and interest and
for permanent injunction. Thereafter, in terms of the compromise
entered into between the parties, the suit was decreed in favour of
the appellant. Hence, it is clear that through the said compromise
decree, the appellant did not obtain any new right, but he has
asserted his pre-existing right/ title/ interest over the subject land.
The Judgment in Ravinder Kaur Grewal’s case (supra) was delivered
on 06.08.2019, whereas the order in Siddhulal case was passed by
the High Court on 24.07.2019 relying on the judgment of the High
Court in Mohd. Yusuf and others v. Rajkumar's case rendered on
13.12.2017. The said judgement was reversed by this Court in the
Judgment reported in (2020) 10 SCC 264. In view of the change
in law with regard to the right accrued to a holder in adverse to be
treated as a pre-existing right and since the order in Mohammed
Yusuf’s case was subsequently reversed, the judgment of the High
Court is not sustainable.
12. Though the Respondent No.1 alleged that the suit was filed by the
appellant in collusion with the Respondent No.2 and within a short
time from the date of initiation of the suit, the parties compromised
the matter in order to evade payment of stamp duty, no concrete
evidence was placed before this court to substantiate that the same.
That apart, it is not the case of the Respondent No.1 - State that the
suit itself was collusive as the property was not in possession of the
appellant and that it belongs to any other third party. Such rival claim
by any other person other than the defendant has not been brought
to our knowledge. Obviously, the case before us is not a title dispute,
but rather one relating to registration and payment of stamp duty and
therefore, we leave the issue there. Under the above circumstances,
we have no option but to hold that the compromise decree is by way
of collusion, cannot be accepted. As already indicated above, the
compromise decree reached finality, as the Respondent No.1 has
not challenged the same. There is no finding of collusion between
the parties in entering into the compromise by any Court as on date.
13 [2019] 11 SCR 74 : (2019) 8 SCC 729
1232 [2024] 12 S.C.R.
Supreme Court Reports
Indisputably, the property is the subject matter of the suit. Thus, the
appellant has satisfied the conditions enumerated in section 17(2)
(vi) of the Act, 1908 and hence, the subject land acquired by him by
way of compromise decree, requires no registration.
13. In respect of the issue relating to payment of stamp duty for mutation
of the subject land, it is the specific plea of the appellant that “consent
decrees” / “decrees” are not chargeable with “stamp duty” under the
Indian Stamp Act, 1899 as applicable to the State of Madhya Pradesh.
Section 3 of the Indian Stamp Act, 1899 provides the instruments
which are chargeable with duty and the same reads as under:
“3. Instrument chargeable with duty— Subject to the
provision of this Act and the exemptions contained is
Schedule I, the following instrument shall be chargeable
with duty of the amount indicated in the schedule as the
proper duty therefore, respectively, that is to say-
(a) Every instrument mentioned in that schedule which,
not having been previously executed by any person, is
executed in India on or after the first day of July 1899;
(b) Every bill of exchange payable otherwise than on
demand or promissory note drawn or made out of on
or after that day and accepted or paid, or presented
for acceptance or payment, or endorsed, transferred or
otherwise negotiable in India; and
(c) every instrument (other than a bill of exchange or
promissory note) mentioned in that schedule, which not
having been previously executed by any property situate,
or to any matter or thing done, or to be done, in India and
is received in India:
Provided that, except as otherwise expressly provided in
this Act, and notwithstanding anything contained in clause
(a), clause (b), or clause (c) of this section or in Schedule
I, the amount indicated in schedule I-A to this Act shall,
subject to the exemptions contained in that Schedule,
be the duty chargeable on the instruments mentioned in
clauses (aa) and (bb) of this proviso, as the proper duty
thereof, respectively, -
[2024] 12 S.C.R. 1233
Mukesh v. The State of Madhya Pradesh & Anr.
(aa) every instrument, mentioned in schedule I-A as
chargeable with duty under that schedule, which not having
been previously executed by any person, is executed in
Madhya Pradesh on or after the commencement of the
Central Provinces and Berar Indian stamp (Amendment)
Act, 1939; and
(bb) every instrument mentioned in Schedule I-A as
chargeable with duty under that schedule, which not having
been previously executed by any person, is executed out
of Madhya Pradesh on or after the commencement of the
Central Provinces and Berar Indian Stamp (Amendment)
Act, 1939 and relates to any property situated or to any
matter or thing done or to be done, in Madhya Pradesh
and is received in Madhya Pradesh:
Provided further that no duty shall be chargeable in respect
of- (1) any instrument executed by, or on behalf of, or in
favour of, the Government in cases where, but for this
exemption, the Government would be liable to pay the
duty chargeable in respect of such instrument; (2) any
instrument for the sale, transfer or other disposition, either
absolutely, or by way of mortgage or otherwise, of any ship
or vessel, or any part, interest, share or property of or in any
ship or vessel registered under the Merchant Shipping Act,
1894 or under Act 19 of 1838, or the Indian Registration
of Ships Act, 1841 as amended by subsequent Acts.”
From the above, it is apparent that stamp duty is not chargeable
on an order/decree of the Court as the same do not fall within the
documents mentioned in Schedule I or I-A read with Section 3 of the
Indian Stamp Act, 1899. Though the Collector of Stamps determined
the stamp duty for the subject land as per Article 22 of Schedule IA
of the Indian Stamp Act, 1899, which states about conveyance, in
this case, we have already held that the compromise decree does
not fall under the instruments mentioned in the Schedule and that
it only asserts the pre-existing rights. Therefore, in the facts of the
case, the consent decree will not operate as conveyance as no
right is transferred and the same does not require any payment of
stamp duty. Since the appellant has only asserted the pre-existing
right and no new right was created through the consent decree, the
1234 [2024] 12 S.C.R.
Supreme Court Reports
document pertaining to mutation of the subject land is not liable for
stamp duty.
14. In the ultimate analysis, we find that the impugned order passed by
the High Court, upholding the orders of the authorities below, has
no legs to stand and is hence, set aside. Accordingly, this appeal
stands allowed and the authority concerned shall make mutation of
the revenue records in respect of the subject land in favour of the
appellant. There is no order as to costs.
15. Consequently, connected Miscellaneous Petition(s), if any, shall
stand disposed of.
Result of the case: Appeal allowed.
†
Headnotes prepared by: Divya Pandey
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