The Exceptions in Section 17(2) of the Registration Act, 1908: Documents Creating Only a Right to Obtain Another Document, Decrees and Compromise Decrees, Government Grants, Court Sale Certificates, and How Narrowly the Exceptions Are Read

Section 17(2) takes a list of documents out of clauses (b) and (c) of Section 17(1). It does not touch gifts under clause (a), leases under clause (d), instruments assigning decrees under clause (e), contracts under Section 17(1A), or authorities to adopt under Section 17(3). Two of its twelve clauses do nearly all the work in practice. Clause (v) exempts a document that creates only a right to obtain another document, which is why an ordinary agreement to sell needs no registration. Clause (vi) exempts a decree or order of a court, but not a compromise decree that travels beyond the subject-matter of the suit. Both have been read narrowly, because their purpose is not to provide an escape from Section 17.

The twelve clauses in outline, and the two that matter in practice

1. What the Sub-Section Does

Section 17(2), Registration Act, 1908, opening words and the principal clauses

Nothing in clauses (b) and (c) of sub-section (1) applies to:

(v) any document 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;

(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;

and, among the others, composition deeds; instruments relating to shares in a joint stock company; debentures and endorsements on them; grants of immovable property by government; instruments of partition made by a revenue officer; certain orders granting loans under agricultural improvement and land improvement legislation; certificates of sale granted to the purchaser of property sold by public auction by a civil or revenue officer; and endorsements on a mortgage deed acknowledging payment of the mortgage money.

2. Clause (v): A Right to Obtain Another Document

The document must create no present interest. It must do no more than oblige a party to execute a further document that will create the interest.
The ordinary agreement to sell is the standard example: it creates a right to obtain a conveyance, not an interest in the land, which is why Section 54 of the Transfer of Property Act says that a contract for sale does not of itself create any interest in or charge on the property.
But the exemption is lost if the document goes further, for example by transferring possession and title in praesenti, in which case it is a conveyance whatever it is called.
And it is now qualified by Section 17(1A). Since 2001, a contract to transfer immovable property for consideration must be registered if it is to be relied on for Section 53A of the Transfer of Property Act. Clause (v) still exempts it from clause (b), but an unregistered agreement can no longer support the defence of part performance.

3. Clause (vi): Decrees and Orders

The general rule is that a decree or order of a court needs no registration. The court's adjudication is a public act and the decree is a public record.
The exception is a decree or order expressed to be made on a compromise and comprising immovable property other than that which was the subject-matter of the suit. That exception was introduced because parties were using consent decrees to transfer property never in issue, and so to sidestep registration and stamp duty.
Bhoop Singh adds a second filter. Even within the exemption, a decree that creates a right in praesenti for the first time, rather than declaring a pre-existing right, falls within Section 17(1)(b).
The practical questions are therefore two: was the property the subject-matter of the suit, and did the decree recognise a right the party already had?

📖 Mohammade Yusuf v. Rajkumar (2020)

Facts: A compromise decree had been passed in a suit, and a party sought to rely on it in later proceedings. The High Court held that the decree required registration and could not be relied on. The property covered by the decree had been the subject-matter of the suit.

Held: The Supreme Court held that the decree did not require registration. Reading Section 17(1)(b) with Section 17(2)(vi), a compromise decree requires registration only where it comprises immovable property other than that which was the subject-matter of the suit. As the decree related to the property in suit, the exclusionary part of clause (vi) did not apply.

Ratio: A compromise decree confined to the subject-matter of the suit falls squarely within the exemption in Section 17(2)(vi). Citation to be verified before publication.

📖 Khushi Ram v. Nawal Singh (2021)

Facts: Family members settled their disputes by a compromise recorded in a decree, which covered land that had not been the subject-matter of the suit. It was contended that the decree was compulsorily registrable and, being unregistered, of no effect.

Held: The Supreme Court upheld the arrangement. A family settlement only recognises rights the members already have, so where the decree gives effect to such a settlement among persons having a pre-existing right or some semblance of a right in the property, it does not create a new right, and registration is not required.

Ratio: A compromise decree giving effect to a family settlement among persons with pre-existing rights declares rather than creates, and so escapes Section 17(1)(b). Citation to be verified before publication.

4. Composition Deeds, Shares and Debentures

A composition deed is an arrangement by which a debtor and his creditors agree that they will accept part of what is due in satisfaction of the whole. It deals with debts and not with land, and the clause removes any doubt about it.
Instruments relating to shares in a joint stock company are exempt, even where the company owns immovable property. The shareholder deals in shares, which are movable property, and not in the land of the company.
Debentures issued by such a company, and endorsements on or transfers of such debentures, are exempt, provided the debenture does not itself create, declare, assign, limit or extinguish a right in specified immovable property. A debenture that charges identified land falls outside the exemption.
The common thread is that all of these are dealings in movable property or in obligations, in which a register of immovable property has no interest.

5. The Other Clauses

Clause	What it exempts	Point to note
Composition deeds	A deed by which a debtor compounds with his creditors	It deals with debts, not with land as such
Shares and debentures	Instruments relating to shares in a joint stock company, debentures, and endorsements on them	Movable property is outside Section 17 in any event; the clauses remove doubt
Government grants	Instruments of grant of immovable property by government	The grant is itself a public act and is separately recorded
Revenue partitions	Instruments of partition made by a revenue officer	A private partition deed is not exempt and must be registered
Court sale certificates	Certificates of sale granted to the purchaser of property sold by public auction by a civil or revenue officer	The certificate declares a title acquired by the sale; it does not create it
Mortgage endorsements	Endorsements on a mortgage deed acknowledging payment of the mortgage money	Contrast clause (c) of Section 17(1), which catches acknowledgments of consideration for a transfer

6. Four Questions the Exceptions Raise

Does a consent decree require registration? Only where it comprises immovable property outside the subject-matter of the suit, or where, within Bhoop Singh, it creates a right in praesenti for the first time. A consent decree recording a settlement of what was already in issue does not.
Does an arbitral award require registration? Section 17(2) does not exempt awards. An award that itself creates, declares, assigns, limits or extinguishes a right of Rs. 100 or more in immovable property falls within Section 17(1)(b) and must be registered, and an unregistered award of that kind cannot be relied on to affect the property. An award directing only the payment of money does not.
Does a family arrangement require registration? It may be made orally and then needs no registration at all. A document that itself effects the arrangement does require it; a memorandum recording one already made does not, as Kale v. Deputy Director of Consolidation holds.
Does a memorandum of family settlement require registration? No, provided it genuinely records a completed arrangement and is not the instrument by which the rights are created. The recital is not conclusive, and the court reads the document as a whole.

7. How the Exceptions Are Read

Narrowly, because Section 17 is the rule and Section 17(2) the exception. Bhoop Singh treated clause (vi) as confined to decrees that declare existing rights.
By substance. A document is not brought within clause (v) by calling itself an agreement, nor taken out of Section 17 by being embodied in a consent decree.
With the sanction in view. The consequence of getting it wrong is Section 49: the document does not affect the property and is not evidence of the transaction, though the proviso preserves a suit for specific performance, Section 53A, and a collateral purpose.
State amendments matter. Several States have amended Section 17 and its exceptions, and the local text should be checked before relying on any clause.

8. The Position Stated Shortly

Section 17(2) exempts documents from clauses (b) and (c) of Section 17(1) only.
Clause (v) exempts a document creating no present interest but only a right to obtain another document.
An ordinary agreement to sell is exempt, but since 2001 it must be registered if relied on for Section 53A.
Clause (vi) exempts a decree or order of a court, except a compromise decree comprising property outside the subject-matter of the suit.
Bhoop Singh: even within clause (vi), a decree creating a right in praesenti for the first time requires registration.
A compromise decree confined to the property in suit, or giving effect to a family settlement among persons with pre-existing rights, is not compulsorily registrable.
The other clauses cover composition deeds, shares and debentures, government grants, revenue partitions, court sale certificates and mortgage endorsements.
The exceptions are read narrowly and by substance, with Section 49 as the sanction.