Unstamped & Unregistered Documents and Collateral Purpose

Saji Koduvath, Advocate, Kottayam.

Introspection

Does the law allow to use unstamped or insufficiently stamped document in evidence?  NoSec. 35 of the Indian Stamp Act is the relevant provision.
But, it can be used after payment of penalty (except promissory note).
Does the law allow to use unregistered (compulsory registrable) deed in evidence?  NoSec. 49 of the Registration Act bars.
But, it can be used for collateral purposes.
Should the court exclude an unregistered (compulsory registrable) deed even if marked without objection?Yes (2008) 8 SCC 564
But, it can be used for collateral purposes.
Can the court exclude an insufficiently stamped (or unstamped) document once marked without objection?NoSec. 36 Stamp Act governs.
Sirikonda Madhava Rao v. N. Hemalatha (SC), 12 April, 2022; Relied on: Javer Chand v. Pukhraj Surana, 1962-2 SCR 333; Shyamal Kumar Roy v. Sushil Kumar Agarwal, 2006-11 SCC 331.
Is there a duty upon Judge not  to  admit a document that is not duly stamped even if no objection to mark it?Yes2017-3 AIR(Kar)(R) 570;
AIR 2015 Kar 175
Is there a duty upon Judge to impound every document not duly stamped, irrespective of objection to mark it?Yes2017-3 AIR(Kar)(R) 570;
AIR 2015 Kar 175
When does question of using a document for ‘collateral purpose‘ arise?  ….In case of an unregistered (compulsorily registrable)  document: Sec. 49 of the Registration Act.
Can the court allow to use an unstamped or insufficiently stamped document for ‘collateral purpose‘?  NoIt is the duty of every Judge not  to  admit a document that is not duly stamped, even if no objection to other side. 2017-3 AIR(Kar)(R) 570; AIR 2015 Kar 175.
Can a document, required to be registered, but not registered, be used in a suit for specific performance.YesIt may be used in a suit for specific performance under Proviso to Sec. 49 of the Registration Act. And, it can be received as evidence of an oral agreement of sale.
S. Kaladevi v. V.R. Somasundaram, (2010) 5 SCC 401; Ameer Minhaj v. Dierdre Elizabeth (Wright) Issar, 2018 (7) SCC  639.

INSUFFICIENTLY STAMPED DOCUMENTS 

Instruments not duly stamped, inadmissible

Sec. 35, Indian Stamp Act reads as under:

  • “35. Instruments not duly stamped inadmissible in evidence, etc.–No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped:
  • Provided that—(a) any such instrument  shall, be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion;
  • (b) where any person from whom a stamped receipt could have been demanded, has given an unstamped receipt and such receipt, if stamped, would be admissible in evidence against him, then such receipt shall be admitted in evidence against him, then such receipt shall be admitted in evidence against him on payment of a penalty of one rupee by the person tendering it;
  • (c) where a contract or agreement of any kind is effected by correspondence consisting of two or more letters and any one of the letters bears the proper stamp, the contract or agreement shall be deemed to be duly stamped;
  • (d)  nothing herein contained shall prevent the admission of any instrument in evidence in any proceeding in a Criminal Court, other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898 (5 of 1898);
  • (e) nothing herein contained shall prevent the admission of any instrument in any Court when such instrument has been executed by or on behalf of  the Government or where it bears the certificate of the Collector as provided by section 32 or any other provision of this Act.

Unstamped document cannot be looked at even for any collateral purpose

Privy Council in Ram Rattan v. Parma Nath, AIR 1946 PC 51, held that section 35 of the Stamp Act prohibited the unstamped (or inadequately stamped) document from being looked at even for any collateral purpose, as it enacts that no instrument chargeable with duty shall be admitted in evidence ‘for any purpose’. The unstamped (or inadequately stamped) document becomes admissible on payment of penalty under Stamp Act or on payment of the stamp duty after impounding.

In Omprakash v. Laxminarayan, (2014) 1 SCC 618, the Apex Court observed as under:

  • “From a plain reading of the aforesaid provision (S. 35 of the Stamp Act), it is evident that an authority to receive evidence shall not admit any instrument unless it is duly stamped. An instrument not duly stamped shall be admitted in evidence on payment of the duty with which the same is chargeable or in the case of an instrument insufficiently stamped, of the amount required to make up such duty together with penalty. As we have observed earlier, the deed of agreement having been insufficiently stamped, the same was inadmissible in evidence. The court being an authority to receive a document in evidence to give effect thereto, the agreement to sell with possession is an instrument which requires payment of the stamp duty applicable to a deed of conveyance. Duty as required, has not been paid and, hence, the trial court rightly held the same to be inadmissible in evidence.” 

The Apex Court upheld the observation of the MP High Court in Writ Petition No. 6464 of 2008, overruling the impugned judgment (Laxminarayan v. Omprakash 2008 (2) MPLJ 416). The MP High Court had observed as under:

  • “8. A document would be admissible on basis of the recitals made in the document and not on basis of the pleadings raised by the parties. ….
  • 9. It would be trite to say that if in a document certain recitals are made then the Court would decide the admissibility of the document on the strength of such recitals and not otherwise. In a given case, if there is an absolute unregistered sale deed and the parties say that the same is not required to be registered then we don’t think that the Court would be entitled to admit the document because simply the parties say so. The jurisdiction of the Court flows from Sec. 33, 35 and 38 of the Indian Stamp Act and the Court has to decide the question of admissibility. With all humility at our command we overrule the judgment in the matter of Laxminarayan (supra).”

  • 33. Examination and impounding of instruments—(1) Every person having by law or consent of parties, authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.
  • (2) For that purpose every such person shall examine every instrument so chargeable and so produced or coming before him, in order to ascertain whether it is stamped with a stamp of the value and description required by the law in force in 62 [India] when such instrument was executed or first executed: Provided that—
  • (a) nothing herein contained shall be deemed to require any Magistrate or Judge of a Criminal Court to examine or impound, if he does not think fit so to do, any instrument coming before him in the course of any proceeding other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898 (5 of 1898);
  • (b) in the case of a Judge of a High Court, the duty of examining and impounding any instrument under this section may be delegated to such officer as the Court appoints in this behalf.
  • (3) For the purposes of this section, in cases of doubt,—
  • (a) the State Government may determine what offices shall be deemed to be public offices; and
  • (b)  the  State Government may determine who shall be deemed to be persons in charge of public offices.

Section 36 of the Stamp ActOnce admitted shall NOT be called in question

Section 36 of the Stamp Act provides as under:

  • “36. Admission of instrument where not to be questioned – Where an instrument has been admitted in evidence such admission shall not except as provided in Section 61, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped “.
    • Note: Sec. 61 of the Indian stamp act reads as under:
    • 61. Revision of certain decisions of Courts regarding the sufficiency of stamps— (1) When any Court in the exercise of its civil or revenue jurisdiction of any Criminal Court in any proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898 (5 of 1898), makes any order admitting any instrument in evidence as duly stamped or as not requiring a stamp, or upon payment of duty and a penalty under section 35, the Court to which appeals lie from, or references are made by, such first-mentioned Court may, of its own motion or on the application of the Collector, take such order into consideration.
    • (2) …  (3) …. (4) …..

Order Admitting Document, Not liable to be Reviewed or Reversed in Appeal

The Apex Court held in Javer Chand v. Pukhraj Surana, AIR 1961 SC 1655, as under:

  • “Where a question as to the admissibility of a document is raised on the ground that it has not been stamped, or has not been properly stamped, it has to be decided then and there when the document is tendered in evidence. 
  • The Court has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case. …
  • Once a document has been marked as an exhibit in the case and the trial has proceeded all along on the footing that the document was an exhibit in the case and has been used by the parties in examination and cross-examination of their witnesses, S. 36 of the Stamp Act comes into operation. Once a document has been admitted in evidence, as aforesaid, it is not open either to the Trial Court itself or to a Court of Appeal or revision to go behind that order.
  • Such an order is not one of those judicial orders which are liable to be reviewed or revised by the same Court or a Court of superior jurisdiction.”

Objection be raised when Document Tendered

Our Apex Court held in Sirikonda Madhava Rao v. N. Hemalatha, 12 April, 2022 (referring Javer Chand v. Pukhraj Surana, (1962-2 SCR 333 and Shyamal Kumar Roy v. Sushil Kumar Agarwal, 2006-11 SCC 331) that after marking a document unopposed, it is not open to the parties, or even the court, to reexamine the order or issue. In this case. a document purporting to be an unregistered and insufficiently-stamped sale deed was marked as an Exhibit. The High Court directed that the aforesaid document should be de-marked and not be treated as an exhibit.It is said by the Supreme Court –

  • Once a document has been admitted in evidence, such admission cannot be called in question at any stage of the suit or proceedings on the ground that the instrument has not been duly stamped. Objection as to admissibility of a document on the ground of sufficiency of stamp, has to raised when the document is tendered in evidence. Thereafter, it is not open to the parties, or even the court, to reexamine the order or issue.”

In Lothamasu Sambasiva Rao v. Thadwarthi Balakotiah, AIR 1973 AP 342, and several other decisions it was held that Section 35 was only a bar to the admissibility of an unstamped or insufficiently stamped document; and that when it had been admitted in evidence it could not have been, afterwards, withdrawn. See also:

  • Pankajakshan Nair v. Shylaja: ILR 2017-1 Ker 951;
  • Dundappa v. Subhash Bhimagouda Patil: 2017-3 AIR(Kar)(R) 570;
  • Savithramma R. C. v. Vijaya Bank; AIR 2015 Kar 175;
  • Jayalakshmamma v. Radhika: 2015 4 KarLJ 545;
  • K. Amarnath v. Smt. Puttamma: ILR 1999 Kar. 4634
  • Nanda Behera v. Akhsaya Kumar Behera, 2017AIR (CC) 1893.

However, it was observed by the Supreme Court in 2001 in Bipin Shantilal Panchal v. State of Gujarat, AIR 2001 SC 1158, that that ‘it is an archaic practice that during the evidence collecting stage, whenever any objection is raised regarding admissibility of any material in evidence the court does not proceed further without passing order on such objection’. And the Court directed as under:

  • “When so recast, the practice which can be a better substitute is this: Whenever an objection is raised during evidence taking stage regarding the admissibility of any material or item of oral evidence the trial court can make a note of such objection and mark the objected document tentatively as an exhibit in the case (or record the objected part of the oral evidence) subject to such objections to be decided at the last stage in the final judgment.”

But, the subsequent decisions in R.V.E. Venkatachala Gounder: AIR 2004 SC 4082; Dayamathi Bai (2004) 7  SCC 107 took a contra view. It was held that the objection as to ‘mode of proof’ should be taken at the time of marking of the document as an exhibit, so that the defect can be cured by the affected party.

Shall not Admit Unless Duly Stamped Vs. Once Admitted Immune from Challenge

The following forceful propositions stand paradoxical and incongruent.

  1. Section 33 of the Stamp Act casts a duty on every authority including the Court to examine the document to find out whether it is duly stamped or not, irrespective of the fact whether an objection to its marking is raised or not. There is a duty upon every Judge under Sec. 35 of the Indian Stamp Act not  to  admit a document that is not duly stamped even if no objection to mark it.
  2. The court should not exclude an insufficiently stamped (or unstamped) deed once marked without objection under Sec. 36 of the Indian Stamp Act.

The Karnataka High Court held in Smt. Savithramma R.C v. M/s. Vijaya Bank, AIR 2015 Kar 175, as under:

  •        “6. From the aforesaid statutory provisions and the decisions, it is clear that a duty is cast upon every judge to examine every document, which is produced or comes before him in the performance of his functions. On such examination, if it appears to the Judge that such instrument is not duly stamped, an obligation is cast upon him to impound the same. This duty is to be performed by the Judge irrespective of the fact whether any objection to its marking is raised or not. Hence, there is a need for diligence on the part of the Court having regard to the statutory obligation under Section 33 of the Karnataka Stamp Act. Section 34 of the Karnataka Stamp Act* mandates that an instrument, which is not duly stamped shall not be admitted in evidence. If any objection is taken to the admissibility of the evidence, it shall be decided then and there. If this document is found to be insufficiently stamped, then in terms of the proviso(a) to Section 34, the Court shall call upon the person, who is tendering the said document to pay duty and ten times penalty and thereafter admit the document in evidence. If duty and penalty is not paid, the document shall not be admitted in evidence.
    • *Corresponding to Sec. 35, Indian Stamp Act
  • If such an objection is not taken at the time of admitting the said instrument in evidence, and the insufficiently stamped document is admitted in evidence then Section 35** of the Act provides that such admission shall not be called in question at any stage of the same suit or proceedings on the ground that the instrument has not been duly stamped.
    • **Corresponding to Sec. 36, Indian Stamp Act
  • It has nothing to do with impounding the document. A duty is cast upon every judge to examine every document that is sought to be marked in evidence. The nomenclature of the document is not decisive. The question of admissibility will have to be decided by reading the document and deciding its nature and classification. Even while recording ex parte evidence or while recording evidence in the absence of the Counsel for the other side, the Court should be vigilant and examine and ascertain the nature of the document proposed to be marked and ensure that it is a document which is admissible. The Court should not depend on objections of the other Counsel before considering whether the document is admissible in evidence or not. Section 33 of the Stamp Act casts a duty on the Court to examine the document to find out whether it is duly stamped or not, irrespective of the fact whether an objection to its marking is raised or not”

Should Court Sit Silent and Question Unstamped Documents Afterwards

Though Smt. Savithramma R.C v. M/s. Vijaya Bank (supra) clarified the position with great clarity. As shown above, it pointed out-

  • “6. …. The Court should not depend on objections of the other Counsel before considering whether the document is admissible in evidence or not. Section 33 of the Stamp Act casts a duty on the Court to examine the document to find out whether it is duly stamped or not, irrespective of the fact whether an objection to its marking is raised or not”

Therefore, it is not definite-

  • whether the court should be unfailingly diligent enough not to mark an unstamped or insufficiently stamped document,or
  • whether the court should sit silent and mark the document if it is not opposed, or
  • whether the court should raise its eye-brows after marking it unopposed.

It is yet to be solved after considering all relevant aspects.

Referring Sec. 36 of the (Indian) Stamp Act, Karnataka High Court pointed out in Nanda Behera v. Akhsaya Kumar Behera, 2017AIR (CC) 1893, relying on Javer Chand v. Pukhraj Surana, AIR 1961 SC 1655, and Yellapu Uma Maheswari v. Buddha Jagadheeswara Rao, (2015) 16 SCC 787, as under:

  • “12. Thus where a question as to the admissibility of a document is raised on the ground that it has not been stamped or has not been properly stamped, it has to be decided then and there when the document is tendered in evidence. Once the Court, rightly or wrongly, decides to admit the document in evidence, so far as the parties are concerned, the matter is closed. Parties to a litigation, where such a controversy is raised, have to be circumspect and the party challenging the admissibility of the document has to be alert to see that the document is not admitted in evidence by the Court. The Court has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit. Once a document has been admitted in evidence, it is not open either to the trial court itself or to a Court of Appeal or revision to go behind that order. Such an order is not one of those judicial orders which are liable to be reviewed or revised by the same Court or a Court of superior jurisdiction. An unregistered document can be relied upon for collateral purpose i.e. severancy of title, nature of possession of various shares but not for the primary purpose i.e. division of joint properties by metes and bounds. An unstamped instrument is not admissible in evidence even for collateral purpose, until the same is impounded. If the petitioner wants to mark the documents for collateral purpose, it is open to him to pay the stamp duty together with penalty and get the document impounded. Thereafter the trial court shall consider the same for collateral purpose subject to proof and relevance.”

Is ‘Impounding’ totally Independent from ‘Admissibility’

Karnataka High Court (N. Kumar, J.), in Rekha S. Chandru v. Chikka Venkatappa (2015), authoritatively held relying on Javer Chand v. Pukhraj Surana, AIR 1961 SC 1655, that when a document was already marked by the trial Court in evidence, the objection regarding stamp duty cannot be raised at a later stage.

It further observed (obiter) by the Karnataka High Court that the impounding the document was totally different from admissibility; and therefore, an insufficiently stamped document, if admitted by mistake, was liable to be impounded by the Court and the procedure prescribed in the Stamp Act was to be followed in so far as collection of stamp duty and penalty were concerned.

It appears that the above proposition of the Karnataka High Court has to be evaluated on the touchstone of the Apex Court verdict, Javer Chand v. Pukhraj Surana, AIR 1961 SC 1655, which reads as under:

  • “Once a document has been admitted in evidence, as aforesaid, it is not open either to the Trial Court itself or to a Court of Appeal or revision to go behind that order. Such an order is not one of those judicial orders which are liable to be reviewed or revised by the same Court or a Court of superior jurisdiction.”

Should an opportunity be given to cure defect, by paying deficit Stamp Duty?

In Kalaivani @ Devasena v. J. Ramu, 2010(1) CTC 27,  it was held that an opportunity should be given to the party who produces the document with insufficient stamp, to pay the deficit stamp duty and penalty so that the document could be exhibited; and that if penalty is not paid, the document should be impounded. It is held as under:

  • “24. .. It is well settled that even an unregistered document is admissible in evidence for collateral purpose provided it is adequately stamped under the Stamp act. If the document is both unstamped and unregistered, as the document in question here, it is no doubt true that it cannot be looked into for collateral purpose also. But such a document should not be thrown out at the threshold itself and an opportunity must be extended to the party who wants to mark the document on his side by directing him to pay the deficit stamp duty along with the penalty upto date, then the document could be admitted in evidence for collateral purpose. If the person does not pay the Court, then the document is to be impounded and sent to the Collector for taking action under the law.”

Unstamped or Insufficiently Stamped Pro-note

Unstamped or insufficiently stamped promissory note cannot be marked in evidence. The weight of authority is on the side that says it is incurable. Hence no secondary evidence can also be lead on the same. It cannot be used for collateral purpose also. But the creditor can prosecute a suit upon ‘original consideration’.

See Blog: (CLICK): Adjudication as to Proper Stamp under Stamp Act

Impounding of Documents – When Produced or when Exhibited

In Yogesh Kumar Sikka v. Monika (2019) the P & H High Court held as under:

  • “12. Court cannot say that it would impound the document only when the document is tendered in evidence for marking. There may be instances where duty and penalty payable may be very high and the party may not choose to rely upon such insufficiently stamped document in order to avoid stamp duty and penalty. In such circumstances, it would result in loss of revenue to the exchequer. The power of impounding a document is to collect stamp duty and penalty whenever there is an escape of duty. Therefore, when it is brought to the notice of the Court that a document is insufficiently stamped, the Court exercising its power under S. 33 of the Act has to pass an order at the first instance for impounding the document. Though there is a discretion vested in the Court to exercise powers under S. 33 and 34 of the Act, no Court can hold that it would wait till the document is tendered in evidence. In such circumstances, there may be chances of loss of revenue to the exchequer.”

Copy of a Deed Cannot be Impounded; it cannot be Validated by Impounding

In Hariom Agrawal v. Prakash Chand Malviya , AIR 2008 SC 166, it is held as under:

  • “8. It is clear from the decisions of this Court and a plain reading of Ss. 33, 35 and 2(14) of the Act (Madhya Pradesh Stamp Act) that an instrument which is not duly stamped can be impounded and when the required fee and penalty has been paid for such instrument it can be taken in evidence under Sec. 35 of the Stamp Act. Ss. 33 or 35 are not concerned with any copy of the instrument and party can only be allowed to rely on the document which is an instrument within the meaning of Sec. 2(14). There is no scope for the inclusion of the copy of the document for the purposes of the Indian Stamp Act. Law is now no doubt well settled that copy of the instrument cannot be validated by impounding and this cannot be admitted as secondary evidence under the Indian Stamp Act, 1899.”

See Blog: No Adjudication Needed If Power of Attorney is Sufficiently Stamped

Can Unregistered Agreement be admitted in a suit for specific performance?

  • It is held in S. Kaladevi Vs. V.R. Somasundaram, (2010) 5 SCC 401, that a document required to be registered, if unregistered, can be admitted in evidence as evidence of a contract in a suit for specific performance.
  • It is followed in Ameer Minhaj v. Dierdre Elizabeth (Wright) Issar, 2018 (7) SCC  639.

Relevant Provisions in the Registration Act:

Sec. 17(1) (g) and 49 are the relevant provisions. They read as under:

  • “17. Documents of which registration is  compulsory- (1) The following documents shall be registered, …, namely:
  • (State Amendment -AP) Agreement of sale of immovable property of the value of one hundred rupee and upwards. (Similar State Amendment in Tamil Nadu and Kerala also.)
  • “49. Effect of non-registration of documents required to be  registered.– No document required by section 17 …. to be registered shall-
  • (a) affect any immovable property comprised therein
  • (b) ….
  • (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:
    • Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (3 of 1877), or as evidence of any collateral transaction not required to be effected by registered instrument.”

Pay Duty With Penalty to Admit Unstamped Deed for Collateral Purpose

In Yellapu Uma Maheswari v. Buddha Jagadheeswararao, (2015) 16 SCC 787, the Apex Court held in the suit for declaration of title that an unregistered document can be relied upon for collateral purposes i.e. to prove his possession, payment of sale consideration and nature of possession; but not for primary purpose i.e. sale between the plaintiff and defendant or its terms. It is held as under:

  • “In a suit for partition, an unregistered document can be relied upon for collateral purpose i.e. severancy of title, nature of possession of various shares but not for the primary purpose i.e. division of joint properties by metes and bounds. An unstamped instrument is not admissible in evidence even for collateral purpose, until the same is impounded. Hence, if the appellant-defendant wants to mark these documents for collateral purpose it is open for them to pay the stamp duty together with penalty and get the document impounded and the trial court is at liberty to mark Exts. B-21 and B-22 for collateral purpose subject to proof and relevance.” 

Section 49 of the Registration Act expressly states admissibility of unregistered documents  in evidence for collateral purposes. The word ‘collateral’ signifies something beyond or parallel. According to Law Lexicon it means “that which is by the side, and not the direct line; that which is additional to or beyond a thing” (Amit Khanna.  Vs Suchi Khanna, 2008-10 ADJ 426; 2009-75 AllLR 34; 2009-1 AWC 929).

The Apex Court in K.B. Saha and Sons Private Limited v. Development Consultant Ltd., (2008) 8 SCC 564: 2008 AIR SCW 4829, has laid down the principle in respect of the collateral purpose.

  •        “34. From the principles laid down in the various decisions of this Court and the High Courts, as referred to here-in-above, it is evident that :-
  1.        A document required to be registered is not admissible into evidence under section 49 of the Registration Act.
  2.       Such unregistered document can however be used as an evidence of collateral purpose as provided in the Proviso to section 49 of the Registration Act.
  3.        A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration.
  4.       A collateral transaction must be a transaction not itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immovable property of the value of one hundred rupees and upwards.
  5.      If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose.

Collateral Purpose‘ under Sec. 49 Registration Act

Section 49 of the Registration Act expressly states admissibility of unregistered documents  in evidence for collateral purposes. The word ‘collateral’ signifies something beyond or parallel. According to Law Lexicon it means “that which is by the side, and not the direct line; that which is additional to or beyond a thing” (Amit Khanna.  Vs Suchi Khanna, 2008-10 ADJ 426; 2009-75 AllLR 34; 2009-1 AWC 929).

The Supreme  Court observed in Sri Venkoba Rao Pawar v. Sri S. Chandrashekar, that the collateral purpose/transaction must be independent of, or divisible from the transaction which requires registration. In Yellapu Uma Maheswari v. Buddha Jagadheeswararao, (2015) 16 SCC 787, the Apex Court held that in the suit for declaration of title, an unregistered document can be relied upon for collateral purposes i.e. to prove his possession, payment of sale consideration and nature of possession; but not for primary purpose i.e. sale between the plaintiff and defendant or its terms.

In S. Kaladevi Vs. V.R. Somasundaram, (2010) 5 SCC 401, Our Apex Court held as under:

  • “11. The main provision in Section 49 provides that any document which is required to be registered, shall not affect any immovable property comprised therein nor such document shall be received as evidence of any transaction affecting such property. The proviso, however, would show that an unregistered document affecting immovable property and required by the 1908 Act or the Transfer of Property Act, 1882 to be registered may be received as an evidence to the contract in a suit for specific performance or as evidence of any collateral transaction not required to be affected by registered instrument. By virtue of the proviso, therefore, an unregistered sale deed of an immovable property of the value of Rs.100 and more could be admitted in evidence as evidence of a contract in a suit for specific performance of the contract. Such an unregistered sale deed can also be admitted in evidence as an evidence of any collateral transaction not required to be effected by registered document. When an unregistered sale deed is tendered in evidence, not as evidence of a completed sale, but as proof of an oral agreement of sale, the deed can be received in evidence making an endorsement that it is received only as evidence of an oral agreement of sale under the proviso to Section 49 of the 1908, Act.”
  • 12. Recently in the case of K.B. Sahaand Sons Private Limited v. Development Consultant Limited ,(2008) 8 SCC 564, this Court noticed the following statement of Mulla in his Indian Registration Act, 7th Edition, at page 189:
    • “……The High Courts of Calcutta, Bombay, Allahabad, Madras, Patna, Lahore, Assam, Nagpur, Pepsu, Rajasthan, Orissa, Rangoon and Jammu & Kashmir; the former Chief Court of Oudh; the Judicial Commissioner’s Court at Peshawar, Ajmer and Himachal Pradesh and the Supreme Court have held that a document which requires registration under Section 17 and which is not admissible for want of registration to prove a gift or mortgage or sale or lease is nevertheless admissible to prove the character of the possession of the person who holds under it……”
  • “This Court then culled out the following principles: (K.B. Saha case, SCC p.577, para 334)
    • “1. A document required to be registered, if unregistered is not admissible into evidence under Section 49 of the Registration Act.
    • 2. Such unregistered document can however be used as an evidence of collateral purpose as provided in the proviso to Section 49 of the Registration Act.
    • 3. A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration.
    • 4. A collateral transaction must be a transaction not itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immovable property of the value of one hundred rupees and upwards.
    • 5. If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose.
  • To the aforesaid principles, one more principle may be added, namely, that a document required to be registered, if unregistered, can be admitted in evidence as evidence of a contract in a suit for specific performance.”

It is held in Ameer Minhaj v. Dierdre Elizabeth (Wright) Issar, 2018 (7) SCC  639, after quoting Sec. 17 Registration Act, as under:

  • 10. On a plain reading of this provision, it is amply clear that the document containing contract to transfer the right, title or interest in an immovable property for consideration is required to be registered, if the party wants to rely on the same for the purposes of Section 53A of the 1882 Act to protect its possession over the stated property. If it is not a registered document, the only consequence provided in this provision is to declare that such document shall have no effect for the purposes of the said Section 53A of the 1882 Act.
  • The issue, in our opinion, is no more res integra. In S. Kaladevi Vs. V.R. Somasundaram and Ors., (2010) 5 SCC 401, this Court has restated the legal position that when an unregistered sale deed is tendered in evidence, not as evidence of a completed sale, but as proof of an oral agreement of sale, the deed can be received as evidence making an endorsement that it is received only as evidence of an oral agreement of sale under the proviso to Section 49 of the 1908 Act. 

After quoting Sec. 49 Registration Act it is observed by the Apex Court as under:

  • 11. In the reported decision (i.e. S. Kaladevi Vs. V.R. Somasundaram, (2010) 5 SCC 401), this Court has adverted to  the principles delineated in K.B. Saha and Sons Private Limited  v. Development Consultant Limited, (2008) 8 SCC 564 and has added one more principle  thereto that a document is required to be registered, but  if unregistered, can still be admitted as evidence of a contract in a suit for specific performance. In view of this exposition, the conclusion recorded by the High Court in the impugned judgment that the sale agreement dated 9th July, 2003 is inadmissible in evidence, will have to be understood to mean that the document though exhibited, will bear an endorsement that it is admissible only as evidence of the agreement to sell under the proviso to Section 49 of the 1908  Act and shall not have any effect for the purposes of  Section 53A of the 1882 Act. In that, it is received as evidence of a contract in a suit for specific performance and nothing more. The genuineness, validity and binding nature of the document or the fact that it is hit by the provisions of the 1882 Act or the 1899 Act, as the case may be, will have to be adjudicated at the appropriate stage as noted by the Trial Court after the parties adduce oral and documentary evidence.”

Basis of the Erudite Decision In S Kaladevi (as stated in Para 11 of the decision)

  1. Proviso in Section 49:
    • “The proviso, however, would show that an unregistered document affecting immovable property and a document ‘required to be registered, but  if unregistered’, may, still, be received as an evidence to the contract in a suit for specific performance …. “
  2. Admitted as proof of an oral agreement of sale
    • “Such an unregistered sale deed … can be received in evidence ….. as evidence of an oral agreement of sale.”

Unregistered Agreement can be used in Specific performance Even After the Amendment on Sec. 17

In C.  Ramya Vs. C.  Ganambal, 2020-5 Mad LJ 416 the Madras Court pointed out that the Madras and Andhra High Courts took the view that even after the amendment on Sec. 17 (Agreement of sale of immovable property is a compulsorily registrable document), non-registration of an agreement of sale does not operate as a total bar to look into the contract, since proviso to Section 49 has carved out two exceptions –

  • (i) a document ‘required to be registered, but  if unregistered,’ may, still, be received as an evidence to the contract in a suit for specific performance, and
  • (ii) it can be used for any ‘collateral purpose’.

The following are the cases referred to by the Madras High Court:

  • G. Veeramani Vs. N. Soundaramoorthy, 2019(6) CTC 580;
  • D. Devarajan v. Alphonsa Mary, 2019 (2) CTC 290;
  • Minor Ravi Bharathi Vs. P. Balasubramani, 2014(3) MWN (Civil) 578.

Unregd. Partition Deed Admissible to see Severance & No Suit for Partition lie

In Chinnapareddigari Pedda Muthyalareddy v. Chinnappareddigari Venkatareddy, AIR 1969 AP 242, unregistered partition lists were drawn up showing the properties allotted to the respective sharers. The lists were construed as partition deeds and were held by the trial Court to be inadmissible in evidence for proving division by metes and bounds. No oral evidence was held to be admissible under section 91 of the Evidence Act to prove the factum of partition or the nature of possession. In appeal the Andhra Pradesh High Court (FB-Jaganmohan Reddy, C.J.) held that the unregistered partition deed was admissible not for proving terms of the partition or as the source of title, but for the purpose of showing that there was a disruption (division/severance) in status and that no suit for partition would lie on the basis that the properties were still joint family properties. This decision is relied on in Booraswami v. Rajakannu, 1978-1 MLJ 248; and held further, relying on K. Kanna Reddy v. K. Venkata Reddy, AIR 1965 AP 274, that for determining status and the nature of the possession oral evidence was also admissible (for proving the factum of partition).

Effect of Marking a Document Without Objection

Unregistered (Compulsorily Registrable) Documents:

With respect to unregistered documents it is held by the Apex Court in K.B. Saha and Sons Private Limited v. Development Consultant Ltd, (2008) 8 SCC 564: 2008 AIR SCW 4829, held as under:

  • “34. From the principles laid down in the various decisions of this Court and the High Courts, as referred to here-in-above, it is evident that :
  • A document required to be registered is not admissible into evidence under section 49 of the Registration Act.
  • Such unregistered document can however be used as an evidence of collateral purpose as provided in the Proviso to section 49 of the Registration Act. ….”

In the light of the Supreme Court decision in K.B. Saha and Sons Private Limited , it appears that the observation of the Karnataka High Court in Nanda Behera v. Akhsaya Kumar Behera, 2017AIR (CC) 1893, that once the Court, rightly or wrongly, decides to admit the documents in evidence, so far as the parties are concerned, the matter is closed, is not applicable to unregistered (compulsorily registrable) documents.

However, the Calcutta High Court in Dipak Kumar Singh v. Park Street Properties (P) Limited, AIR 2014 Cal 167, distinguished K.B. Saha & Sons Private Limited, (2008) 8 SCC 564, and other decisions saying that ‘the question of admissibility of a document, which had been admitted in evidence, was not taken up for consideration’ in those decisions. The High Court relied on Javer Chand v. Pukhraj Surana, AIR 1961 SC 1655 (question as to admissibility on the ground that it has not been stamped), which held that once a document had been marked as an exhibit in a case and the trial had proceeded all along on the footing that the document was an exhibit in the case and had been used by the parties in examination and cross-examination of their witnesses, it was not open either to the trial court itself or to a court of appeal or revision to go behind that order.

The other decisions referred to and distinguished in Dipak Kumar Singh v. Park Street Properties (P) Limited are the following:

  • Ram Kumar Das v. Jagdish Chandra Deo, Dhabal Deb: AIR 1952 SC 23,
  • Satish Chand Makhan v. Govardhan Das Byas: (1984) 1 SCC 369,
  • Anthony v. K.C. Ittoop: (2000) 6 SCC 394,
  • Surya Kumar Manji v. Trilochan Nath: AIR 1955 Cal 495,
  • Kunju Kesavan v. M.M. Philip: AIR 1964 SC 164,
  • Prasanta Ghosh  v. Pushkar Kumar Ash: 2006 (2) CHN 277.

See Blog: EFFECT OF MARKING DOCUMENTS WITHOUT OBJECTION

See Blog: PRODUCTION, ADMISSIBILITY & PROOF OF DOCUMENTS

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