Omprakash vs Ganesh Shankar Mehta

Gurpal Singh Ahluwalia, J

This petition under Article 227 of the Constitution of India has been filed against the order dated 4.12.2011 passed by Second Civil Judge Class-II Sheopur, District Sheopur in Civil Suit No. 16A/2011 by which the application filed by the petitioner under Section 33 of the Stamp Act, 1899 has been rejected.

It is submitted by the counsel for the petitioner that the Trial Court has come to a conclusion that considering the contents of the document, it does not appear to be an agreement but it is a mortgage deed and, therefore, it is required to be registered. As the instrument is not a registered document, therefore, there is no question for sending the same to Collector (Stamps). Since the mortgage deed is unregistered document, therefore, it is not admissible in evidence. It is submitted by the counsel for the petitioner that it is true that an unregistered mortgage deed is not admissible in evidence but the same can be read for collateral purposes and, therefore, the Claims Tribunal committed a material illegality by holding the instrument as not admissible even for collateral purposes. To buttress his contentions, the counsel for the petitioner has relied upon the order passed by a Co-ordinate Bench of this Court in the case of Narendra Prasad Soni vs. Manjulata reported in MANU/MP/0601/2001 : 2002 (1) MPWN 14.

It is fairly conceded by the counsel for the petitioner that earlier by order dated 24.8.2012 this Court had granted interim stay of the further proceedings but in the light of the judgment passed by the Supreme Court in the case of Asian Resurfacing of Road Agency Pvt. Ltd. & Anr. vs. Central Bureau of Investigation in Criminal Appeal Nos. 1375-1376 of 2013, trial has reached to the stage of defence evidence.

Heard the learned counsel for the petitioner.

During the course of arguments, the petitioner has not challenged the findings of the Trial Court regarding the nature of the document. His only contention is that even the document might be an unregistered mortgage deed but it still can be read for collateral purposes.

The contention of the counsel for the petitioner is no more res integra.

The Supreme Court in the case of Avinash Kumar Chauhan vs. Vijay Krishna Mishra by order dated 17.12.2008 passed in Civil Appeal No. 7350/2008 has held that an unregistered document cannot be read even for collateral purposes. It has been held by the Supreme Court in the case of Avinash Kumar Chauhan (supra) as under:-

"19. The contention of learned counsel for the appellant that the document was admissible for collateral purpose, in our opinion, is not correct. In Bondar Singh (supra) this Court was not concerned with the provisions of the Act. Only interpretation of the provisions of the Registration Act, 1908 was in question. It was opined:-

"The main question, as we have already noted, is the question of continuous possession of 13 the plaintiffs over the suit lands. The sale deed dated 9-5-1931 by Fakir Chand, father of the defendants in favour of Tola Singh, the predecessor-in-interest of the plaintiffs, is an admitted document in the sense its execution is not in dispute. The only defence set up against the said document is that it is unstamped and unregistered and therefore it cannot convey title to the land in favour of the plaintiffs. Under the law a sale deed is required to be properly stamped and registered before it can convey title to the vendee. However, legal position is clear law that a document like the sale deed in the present case, even though not admissible in evidence, can be looked into for collateral purposes. In the present case the collateral purpose to be seen is the nature of possession of the plaintiffs over the suit land. The sale deed in question at least shows that initial possession of the plaintiffs over the suit land was not illegal or unauthorized..."

In this case, by reason of the statutory interdict, no transfer at all is permissible. Even transfer of possession is also not permissible. [See Pandey Oraon v. Ram Chander Sahu MANU/SC/0045/1992 : 1992 Supp (2) SCC 77 and Amrendra Pratap Singh v. Tej Bahadur Prajapati and Others MANU/SC/0955/2003 : (2004) 10 SCC 65]

The Registration Act, 1908 provides for such a contingency in terms of the proviso appended to Section 49 thereof, which reads as under:-

"49. Effect of non-registration of documents required to be registered.-No document required by section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882), to be registered shall--

(a) affect any immovable property comprised therein, or

(b) confer any power to adopt, or

(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."

Section 35 of the Act, however, rules out applicability of such provision as it is categorically provided therein that a document of this nature shall not be admitted for any purpose whatsoever. If all purposes for which the document is sought to be brought in evidence are excluded, we 15 fail to see any reason as to how the document would be admissible for collateral purposes.

The view we have taken finds support from the decision of the Privy Council in Ram Rattan v. Parmananad, [MANU/PR/0046/1945 : AIR 1946 PC 51] wherein it was held:-

"That the words 'for any purpose' in Section 35 of the Stamp Act should be given their natural meaning and effect and would include a collateral purpose and that an unstamped partition deed cannot be used to corroborate the oral evidence for the purpose of determining even the factum of partition as distinct from its terms."

The said decision has been followed in a large number of decisions by the said Court. In Bhaskarabhotla Padmanabhaiah and others v. B. Lakshminarayana and others [MANU/AP/0376/1960 : AIR 1962 A.P. 132], it has been held:-

"9. In this case, the learned Subordinate Judge has observed that what the plaintiff was trying to prove was not the division in status but to show that the property was divided under the partition deed. In any case, the fact that the document is inadmissible due to want of being stamped is clear. For, in Ram Rattan v. Parmanand, MANU/PR/0046/1945 : AIR 1946 PC 51, their Lordships of the Privy Council 16 held that the words 'for any purpose' in S. 35 of the Stamp Act should be given their natural meaning and effect and would include a collateral purpose and that an unstamped partition deed cannot be used to corroborate the oral evidence for the purpose of determining even the factum of partition as distinct from its terms."

It was furthermore held:-

"10. In the result, I agree with the learned Munsif-Magistrate that the document is 'an instrument of partition' under Sec. 2(15) of the Indian Stamp Act and it is not admissible in evidence because it is not stamped. But, I further held that if the document becomes duly stamped, then it would be admissible to evidence to prove the division in status but not the terms of the partition."

In Sanjeeva Reddi v. Johanputra Reddi, [MANU/AP/0060/1972 : AIR 1972 A.P. 373], it has been held:-

"9. While considering the scope of Section 35 of the Indian Stamp Act we cannot bring in the effect of non-registration of a document under Section 49 of the Indian Registration Act. Section 17 of the Indian Registration Act deals with documents, the registration of which is compulsory and Section 49 is concerned only with the effect of such non-registration of the documents which require to be registered by Section 17 or by any provision of the Transfer of Property Act. The effect of non-registration is that such a document 17 shall not affect any immovable property covered by it or confer any power to adopt and it cannot be received as evidence of any transaction affecting such property or conferring such power. But there is no prohibition under Section 49 to receive such a document which requires registration to be used for a collateral purpose i.e. for an entirely different and independent matter. There is a total and absolute bar as to the admission of an unstamped instrument whatever be the nature of the purpose or however foreign or independent the purpose may be for which it is sought to be used, unless there is compliance with the requirements of the provisos to Section 35. In other words if an unstamped instrument is admitted for a collateral purposes. It would amount to receiving such a document in evidence for a purpose which Section 35 prohibits. There is nothing in the case of B. Rangaiah v. B. Rangaswamy, (1970) 2 Andh WR 181 which supports the contention of the petitioner. That was a case as pointed out by Kuppuswami, J., where there were two instruments though contained in one document one a settlement in favour of the 4th defendant therein and the other a will. It was therefore held that part of the instrument which constitutes a will did not require any stamp and will be admissible in evidence for proving the bequest contained therein. It was for that reason that the learned Judge said that Sec. 35 of the Stamp Act has no application to a case where one of the separate instruments relating to one such matters would not at all be chargeable under the Act as in the case before him."

In T. Bhaskar Rao v. T. Gabriel and others, [MANU/AP/0081/1981 : AIR 1981 A.P. 175], it has been held:-

"5. Section 35 of the Stamp Act mandates that an instrument chargeable with duty should be stamped so as to make it admissible in evidence. Proviso A to Section 35 of the Stamp Act enables a document to be received in evidence on payment of stamp duty and penalty if the document is chargeable, but not stamped or on payment of deficit duty and penalty, if it is insufficiently stamped. The bar against the admissibility of an instrument which is chargeable with stamp duty and is not stamped is of course absolute whatever be the nature of the purpose, be it for main or collateral purpose, unless the requirements of proviso (A) to Section 35 are complied with. It follows that if the requirements of proviso (A) to Section 35 are satisfied, then the document which is chargeable with duty, but not stamped, can be received in evidence."

It was further held:-

"7. It is now well settled that there is no prohibition under Section 49 of the Registration Act, to receive an unregistered document in evidence for collateral purpose. But the document so tendered should be duly stamped or should 19 comply with the requirements of Section 35 of the Stamp Act, if not stamped, as a document cannot be received in evidence even for collateral purpose unless it is duly stamped or duty and penalty are paid under Section 35 of the Stamp Act."

(See also Firm Chuni Lal Tukki Mal v. Firm Mukat Lal Ram Chanda and others, [MANU/UP/0041/1968 : AIR 1965 All. 164] and Chandra Sekhar Misra v. Gobinda Chandra Das, [MANU/OR/0008/1966 : AIR 1966 Ori. 18]).

For the reasons aforementioned, there is no merit in this appeal which fails and is dismissed. However, in the facts and circumstances of the case, there shall be no order as to costs."

The Supreme Court in the case of K.B. Saha & Sons Private Limited vs. Development Consultant Limited reported in MANU/SC/7679/2008 : (2008) 8 SCC 564 has held as under:

"29. As we have already noted that under the proviso to Section 49 of the Registration Act, an unregistered document can also be admitted into evidence for a collateral fact/collateral purpose, let us now look at the meaning of "collateral purpose" and then ascertain whether Clause 9 of the lease agreement can be looked into for such collateral purpose.

In Haran Chandra Chakravarti v. Kaliprasanna Sarkar it was held that the terms of a compulsorily registrable instrument are nothing less than a transaction affecting the property comprised in it. It was also held that to use such an instrument for the purpose of proving such a term would not be using it for a collateral purpose and that the question as to who is the tenant and on what terms he has been created a tenant are not collateral facts but they are important terms of the contract of tenancy, which cannot be proved by admission of an unregistered lease deed into evidence.

The High Court in the impugned judgment relied on a decision of the Allahabad High Court in Ratan Lal v. Hari Shanker to hold that since the appellant wanted to extinguish the right of the respondent with the help of the unregistered tenancy, the same was not a collateral purpose. In Ratan lal case while discussing the meaning of the term "collateral purpose", the High Court had observed as follows: (AIR pp. 180-81, para 4)

"4. The second contention was that the partition deed, even if it was not registered could certainly be looked into for a collateral purpose.... but the collateral purpose has a limited scope and meaning. It cannot be used for the purpose of saying that the deed created or declared or assigned or limited or extinguished a right to immovable property. ... term 'collateral purpose' would not permit the party to establish any of these acts from the deed."

In Bajaj Auto Ltd. v. Behari Lal Kohli this Court observed that if a document is inadmissible for non-registration, all its terms are inadmissible including the one dealing with landlord's permission to his tenant to sub-let. It was also held in that decision that if a decree purporting to create a lease is inadmissible in evidence for want of registration, none of the terms of the lease can be admitted in evidence and that to use a document for the purpose of proving an important clause in the lease is not using it as a collateral purpose. Again this Court in Rai Chand Jain v. Chandra Kanta Khosla reiterated the above and observed in para 10 as under: (SCC p. 429, para 10)

"10. ... the lease deed, Ext. P-1 dated 19-5-1978 executed both by the appellant and the respondent i.e. the landlady and the tenant, Rai Chand Jain, though unregistered can be considered for collateral purposes and as such the findings of the appellate authority to the effect that the said deed cannot be used for collateral purposes, namely, to show that the purpose was to lease out the demised premises for residential purposes of the tenant only is not at all legally correct. It is well settled that unregistered lease executed by both the parties can be looked into for collateral purposes. In the instant case the purpose of the lease is evident from the deed itself which is as follows: 'The lessor hereby demises House No. 382, Sector 30-A, Chandigarh, to the lessee for residential purposes only'. This clearly evinces that the property in question was let out to the tenant for his residence only."

In Rana Vidya Bhushan Singh v. Ratiram the following has been laid down:

"A document required by law to be registered, if unregistered, is inadmissible as evidence of a transaction affecting immovable property, but it may be admitted as evidence of collateral facts, or for any collateral purpose, that is for any purpose other than that of creating, declaring, assigning, limiting or extinguishing a right to immovable property. As stated by Mulla in his Indian Registration Act, 7th Edn., at p. 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 of 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.' "

*. From the principles laid down in the various decisions of this Court and the High Courts, as referred to hereinabove, it is evident that:

A document required to be registered, if unregistered 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.

A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration.

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.

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.

In our view, the particular clause in the lease agreement in question cannot be called a collateral purpose. As noted earlier, it is the case of the appellant that the suit premises were let out only for the particular named officer of the respondent and accordingly, after the same was vacated by the said officer, the respondent was not entitled to allot it to any other employee and was therefore, liable to be evicted which, in our view, was an important term forming part of the lease agreement. Therefore, such a clause, namely, Clause 9 of the lease agreement in this case, cannot be looked into even for collateral purposes to come to a conclusion that the respondent was liable to be evicted because of violation of Clause 9 of the lease agreement. That being the position, we are unable to hold that Clause 9 of the lease agreement, which is admittedly unregistered, can be looked into for the purpose of evicting the respondent from the suit premises only because the respondent was not entitled to induct any other person other than the named officer in the same."

Accordingly, the petition fails and is hereby dismissed.