Mohammade Yusuf & Ors. v. Rajkumar & Ors.
Background
In an earlier suit from 1984, a compromise decree had declared the appellants' predecessor entitled to a portion of disputed land, with the rest going to the defendants. Decades later, in fresh litigation over adjoining land, the appellants tried to produce that 1985 compromise decree as evidence, but the trial court held it inadmissible because it was never registered, and the Madhya Pradesh High Court upheld that view, relying on the reasoning that a decree based on an adverse-possession claim could not reflect a pre-existing title and so required registration.
Decision Breakdown
The Supreme Court clarified that under Section 17(2)(vi) of the Registration Act, a court decree, including a compromise decree, does not require registration unless it creates a new right in property that was not already the subject-matter of the suit, or is shown to be collusive. Since the 1985 decree concerned only the very land that was the subject of that earlier suit and there was no allegation it was collusive, it fell squarely within the exemption and did not need registration. The Court also noted that the High Court's reliance on an older ruling restricting adverse-possession claims had since been overruled by a later three-judge bench decision (Ravinder Kaur Grewal), which held that a person who perfects title through 12 years of adverse possession can use it as a "sword," not just a "shield." It set aside the High Court's judgment and the trial court's order, and directed that the compromise decree be formally exhibited as evidence.
Lesson Learnt
A compromise decree over property that was already the actual subject of the lawsuit generally does not need separate registration to be used as evidence: registration is required only when such a decree creates an entirely new right in property beyond what was being litigated.