Tilak Jain vs Bala Saheb Deceased Thr Lrs Uday Shinde on 6 September, 2019

[Cites 16, Cited by 1]

Madhya Pradesh High Court

Tilak Jain vs Bala Saheb Deceased Thr Lrs Uday Shinde on 6 September, 2019

Equivalent citations: AIR 2020 MADHYA PRADESH 22

The present petition has been filed challenging the order dated 24.11.2017 passed by the learned trial Court in Civil Suit No. 84-A/13 whereby the learned Court has refused to mark the exhibit on the agreement to sell dated 6.9.2010 on the count that it is required to be registered, therefore, it cannot be exhibited under the provision of Section 49 of the Registration Act, 1908.

Counsel for the petitioner has argued that the aforesaid order is contrary to the law laid down by the Hon'ble Supreme Court in the case of S. Kaladevi vs. B. R. Soma Sundaram, reported in 2010 (III) MPLJ 500 wherein, it has been held that a document required to be registered, if unregistered, can be admissible in evidence in a suit for specific performance for collateral purposes. He has again relied upon the judgment passed by the Hon'ble Court as reported in 2017 (III) MPLJ 97. It is alleged by the counsel for the petitioner that an application for impounding the document was also filed by him and he is ready to pay the remaining stamp duty and penalty as per the provisions contained under Section 35 of the Stamp Act but the trial Court without considering the aforesaid preposition has rejected the application on the ground that in terms of the amended provisions in the Registration Act with respect to compulsory registration of a 2 THE HIGH COURT OF MADHYA PRADESH M.P. No.1213/2018 (Tilak Jain vs. Bala Saheb deceased through LRs. and Ors.) document relating to an immovable property which was effected from 14.01.2010 the document cannot be taken on record and marked as an exhibit. Further more Section 49 of Registration Act, 1908 provides that an unregistered document cannot be taken into consideration even for collateral purpose. It is submitted that the learned trial Court has committed a grave error in rejecting the application. He has prayed for setting aside of the impugned order with a direction to the learned trial Court to consider the aforesaid document and also send the document to the learned Collector for impounding the same in terms of Section 49 of the Registration Act, 1908.

Per contra, the learned Panel Lawyer has given his appearance in the matter and has argued that the learned trial Court has committed an error in not sending the document to the learned Collector for impounding. It is contended that the petitioner has rightly filed the application for impounding the document which should have been allowed by the learned trial Court. He has relied upon Section 49 of the Registration Act and has argued that in terms of the aforesaid provisions the documents should have been sent to the competent authority for impounding as the petitioner is also ready for impounding of the document, therefore, the impugned order to the aforesaid effect is illegal and has prayed for sending the document to the competent authority for impounding purpose.

Heard the learned counsel for the parties and perused the record. It is seen from the order sheet dated 8.3.2018 that this Hon'ble 3 THE HIGH COURT OF MADHYA PRADESH M.P. No.1213/2018 (Tilak Jain vs. Bala Saheb deceased through LRs. and Ors.) Court was pleased to stay the further proceedings of the trial Court. Thereafter, the matter has been adjourned continuously. From the record, it is seen that a civil suit has been filed for specific performance of contract before the trial Court with respect to an agreement to sale dated 6.9.10. The case was fixed for recording of plaintiff evidence before the learned trial Court and at the time of exhibiting of the agreement dated 6.9.10, an objection was raised with respect to the document before the trial Court to the effect that the same is an unregistered document and cannot be marked as an exhibit. The learned trial Court after considering the objections filed by the defendants has refused to take the aforesaid document on record and mark as an exhibit. Thereafter, an application was filed by the petitioner before the trial Court under Section 33 and 35 of the stamp Act and has prayed for sending the document before the Stamp Collector for payment of insufficient stamp duty. The application was filed on 9.1.2018. No reply to the aforesaid application was filed by the defendants. The learned trial Court without considering the legal aspect in this regard regarding Section 49 of the Registration Act and Section 35 of the Stamp Act has passed the impugned orders vide Annexures P/1 and P/2 whereby the learned trial Court has rejected the applications. The Hon'ble Supreme Court in the case of S. Kala Devi (supra) has considered the aforesaid preposition with respect to admissibility of an unregistered document with respect to an immovable property in a suit for specific performance of agreement to 4 THE HIGH COURT OF MADHYA PRADESH M.P. No.1213/2018 (Tilak Jain vs. Bala Saheb deceased through LRs. and Ors.) sale and the Hon'ble Supreme Court has held that an unregistered sale deed can also be admitted in evidence as an evidence of any collateral transaction not required to be effected by the registered document. The Hon'ble Supreme Court in the case of Kaladevi (supra) has held as under:-

"11. The main provision in Section 49 provides that any document which is required to be registered, if not registered, shall not affect any immovable property comprised therein nor such document shall be received as evidence of any transaction affecting such property. Proviso, however, would show that an unregistered document affecting immovable property and required by 1908 Act or the Tranfer 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 effected by registered instrument. By virtue of 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 1908 Act."

The Hon'ble Supreme Court in the case of K.B. Saha and Sons Private Limited vs. Development Consultant Limited, reported in (2008) 8 SCC 564 has noticed the following statement of Mulla in his Indian Registration Act, 7th Addition and the principle laid down therein which are as under:-

"......The High Courts of Calcutta, Bombay, Allahabad, Madras, Patna, Lahore, Assam, Nagpur, Pepsu, Rajasthan, Orissa, Rangoon and Jammu and Kashmir; the form 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 5 THE HIGH COURT OF MADHYA PRADESH M.P. No.1213/2018 (Tilak Jain vs. Bala Saheb deceased through LRs. and Ors.) character of the possession of the person who holds under it......"

This Court then culled out the following principles :-

"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."

The Hon'ble High Court in the case of Radu s/o Balu Bhilwal Bhil and others vs. Jhitra s/o Badiya Meda Bhil and others. reported in 2017 (3) MPLJ 96 has held as under:-

5. After framing the issue evidence of the plaintiffs started and during cross-examination of the plaintiff defendants put the agreement dated 10-6-2002 before the witness and tried to get the said agreement to sale marked as exhibit. Such a conduct was objected by the plaintiffs that the said document cannot be taken on record and marked as exhibit as the same was not registered and properly stamped. Learned trial Court has accepted the objection taken by the plaintiff by the impugned order, hence the present petition.

10. Trial Court has only directed that the said agreement to sale cannot be marked as exhibit unless the same is impounded under the provisions of the Indian Stamp Act. Admittedly, the agreement to sale dated 10.06.2002 contains a recital that possession has been handed over to the defendants, therefore, it is 6 THE HIGH COURT OF MADHYA PRADESH M.P. No.1213/2018 (Tilak Jain vs. Bala Saheb deceased through LRs. and Ors.) a "conveyance" as provided under Article 23 of Schedule-IA chargeable with the duty of seven and half percent of market value of the property and penalty maximum up to ten time. This Court in the case of Umesh Kumar vs. Rajaran, reported in 2010(2) M.P.L.J. 104 and Atmaram vs. Anil Kumar (supra) has specifically held that party is required to pay the duty as well as penalty in accordance with sections 33, 35 and 38 of the India Stamp Act over the agreement to sell in a suit for specific performance when the possession was handed over at the time of execution of agreement. In view of the above discussion, impugned order passed by the trial Court is just and proper and does not suffer from any procedural infirmity or material irrgularity or jurisdictional error so as to warrant interference in exercise of extra ordinary jurisdiction conferred by Article 227 of the Constitution of India. Accordingly, writ petition fails and is hereby dismissed.

The relevant provisions of the Registration Act and Stamp Act are required to be seen. Section 49 Section 33 and 35 are reproduced hereinbelow:-

"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) 2,3 [***] or as evidence of any collateral transaction not required to be effected by registered instrument.]"

"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 a 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 India when such instrument was executed or first 7 THE HIGH COURT OF MADHYA PRADESH M.P. No.1213/2018 (Tilak Jain vs. Bala Saheb deceased through LRs. and Ors.) executed :

(3) 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.

(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.

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;

(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."

From the perusal of the aforesaid, it is apparently clear that if an 8 THE HIGH COURT OF MADHYA PRADESH M.P. No.1213/2018 (Tilak Jain vs. Bala Saheb deceased through LRs. and Ors.) unregistered document is placed before the learned trial Court for marking as an exhibit or for consideration in evidence the aforesaid document should have been taken into the custody of the Court and should have been sent to the Collector of Stamps for impounding purpose. In the present case the document which was required to be considered in evidence and marked as an exhibit is an agreement to sale dated 6.9.10 for which the civil suit has been filed. The document is insufficiently stamped. An application was filed by the plaintiff for impounding of the document showing his willingness to pay the deficient stamp duty on the document along with the penalty. The application was not considered by the learned trial Court. It is true that the unregistered document cannot be marked as an exhibit but until and unless it is impounded under the provisions of Indian Stamp Act. Therefore, in terms of Article 23 of Schedule I A chargeable with the duty of seven and half percent of the market value of the property and penalty maximum upto 10 times the document should have been impounded. The Hon'ble High Court in the case of Umesh Kumar S/o Prakashchandra Sharma vs. Rajaram, reported in 2010 (2) MPLJ 104 has specifically held that the party is required to pay the duty as well as the penalty in accordance with Sections 33, 35 and 38 of the Indian Stamp Act over the agreement to sell and a suit for specific performance when the possession was handed over at the time of execution of the agreement. Thus, the learned trial Court has committed an error in not taking over the unregistered document in his 9 THE HIGH COURT OF MADHYA PRADESH M.P. No.1213/2018 (Tilak Jain vs. Bala Saheb deceased through LRs. and Ors.) custody and sending it to the Collector of stamps for impounding purpose rather has rejected the application. The documents should have been taken into custody by the learned trial Court and should have been sent to the Collector of stamps. To the aforesaid aspect there is an illegality committed by the trial Court and the order impugned is unsustainable and is hereby set aside. The learned trial Court is directed to comply with the provisions of Indian Stamp Act and the Registration Act and take the unregistered document in its custody and send it to the Collector of Stamps for impounding as per the provisions provided under the Registration Act and the Stamp Act. Once the document is properly registered only thereafter the same can be marked as an exhibit in the trial or else the document can only be used for a collateral purposes.

Accordingly, the petition is allowed. No order as to cost.

(Vishal Mishra) Judge van VANDANA VERMA 2019.09.18 10:52:21 +05'00'

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