Andhra HC (Pre-Telangana)
A. Kishore @ Kantha Rao vs G. Srinivasulu on 22 April, 2004
Equivalent citations: AIR 2004 (NOC) 483 (AP), 2004 A I H C 3187, (2004) 97 REVDEC 502, (2004) 3 ANDHLD 817, (2004) 20 ALLINDCAS 448 (AP), (2004) 2 ANDHWR 1
Author: Bilal Nazki
Bench: Bilal Nazki
JUDGMENT Bilal Nazki, J.
1. This reference has been made by a learned Single Judge of this Court, referring the following question :
"Whether, the document in question is admissible in evidence, for collateral purpose in the facts and circumstances of the case."
In a suit for permanent injunction, a document was pressed into service by the defendant, which was a Deed of Lease. An objection was taken to its admissibility on the ground that it was not registered. The contention was that in terms of Section 49(c) of the Registration Act, 1908, the document though unregistered, could be used for collateral purpose. Since one of the parties had denied the jural relationship of landlord and tenant, the other party had justified his possession on the ground that he was a tenant and as such was in possession. Therefore the Court had to decide whether such a document could be taken into consideration for the purpose of establishing the possession. The learned Single Judge took note of the following three judgments:
(1) Hussain Begum and Ors. v. Madu Ranga Rao and Ors., .
(2) Relangi Nageswara Rao and Anr. v. Tatha Chiranjeeva Rao, .
(3) Satish ChandMakhan v. Govardhan Das Byas, .
After noting these decisions, the learned Single Judge felt that such questions were cropping up off and on therefore it was better if the matter was decided by a Division Bench.
2. Before going to the arguments and the judgments which have been cited at the bar, it will be profitable to reproduce Section 49(c) of the Registration Act, 1908.
"49. Effect of non-registration of documents required to be registered:--
(a) .....
(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, 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, or as evidence of part performance of a contract for the purposes of Section 53-A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction nor required to be effected by registered instrument.]"
3. Now, the contention of the learned Counsel for petitioner is that Section 49(c) empowers the Courts to rely on unregistered documents for collateral purpose and the nature of the possession of the petitioner would be a collateral purpose in the suit, whereas the learned Counsel for the other side submits that in a suit for injunction, the question of possession is a principal question and not a collateral question. In a lease, it is submitted what is transfer, is possession alone and if it is held to be a collateral purpose, then there won't be any principal purpose. It is submitted that if a sale deed is unregistered, possession may be collateral purpose because in a sale, the total interest in the property is transferred, whereas lease by definition, transfers only the possession. Therefore in a lease deed, the possession would be the principal purpose and not collateral purpose. This question has cropped up on many occasions before this Court as well as Supreme Court. Let us have a look at the judgments of this Court and the Supreme Court, which have also been noted by the learned Single Judge.
(1) Hussain Begum and Ors. v. Madu Ranga Rao and Ors., . This also pertain to a lease and in Para 15, this Court held:
"The only document upon which reliance has been placed very much by the plaintiffs is Ex.B-1. Ex.B-1 is an unregistered lease said to have been executed by the 1st defendant in favour of the plaintiffs and said to have been attested by the second defendant. Second defendant is not obviously a party thereto. Now it is the plea of the plaintiffs further that after the expiry of the term of lease under Ex.B-1, the defendants have taken the other hit of the suit property promising to enhance the rent and thereby both the defendants continued to be in possession of whole of the suit property as lessees. To prove the plea against the second defendant Ex.B-1 will not help. In view of the fact that Ex.B-1 is an unregistered lease deed it is not admissible according to Section 49 of the Registration Act. No doubt, in the explanation appended thereto document, which per se is not admissible, for want of registration can be considered by the Court for collateral purpose. The factum of lease being the contentious issue I do not think Ex.B-1 can be pressed into service to prove the possession of the defendants otherwise independent of the document. I see every force in the contention of the learned Counsel for the respondents in this regard that Ex.B-1 is not available to the plaintiff's even for collateral purpose to prove the possession of the defendants. The possession of the defendants over the suit property is an undisputed fact. The dispute only being in what capacity."
(2) Relangi Nageswara Rao and Anr. v. Tatha Chiranjeeva Rao, .
In Para 26, this Court held:
"The learned Senior Counsel Mr. Veerabhadraiah submits that it can be used for collateral purpose to establish the nature of the possession and consequential status of the person in possession of the property can be determined. In this case, the respondent asserted that the property belonged to him and that he was in possession of the property as owner. On the other hand, the petitioner contended that the property was leased out to respondent. In such a situation, the status of the parties, existence of lease apart from terms and conditions of lease form basic and integral transactions. Under those circumstances, can it be said that the relationship could be decided as collateral issue ?"
(3) Satish Chand Makhan v. Govardhan Das Byay, .
The Supreme Court in this case held:
"The unregistered draft lease agreement Exhibit B-2 was clearly inadmissible in evidence under Section 49 of the Registration Act, except for the collateral purpose of proving the nature and character of possession of the defendants. The proviso to Section 49 was however not applicable in the present case inasmuch as the terms of a lease are not a "collateral purpose" within its meaning. It follows that the unregistered draft lease agreement Exhibit B-2 was inadmissible in evidence to prove the transaction of lease. It was also ineffectual to create a valid lease for a renewed term of nine years for want of registration as required under Section 17(1)(d) of the Registration Act."
4. The judgments of this Court which have been referred to above, are clearly in conflict with the judgment of Supreme Court, which we have mentioned hereinabove Satish Chand Makhan v. Govardhan Das Byas (supra). The Supreme Court was of the view that even an unregistered sale deed can be taken into consideration in terms of proviso to Section 49 for the purpose of establishing possession and nature of possession. The terms of the lease would be primary purpose and the possession and nature of possession would be the collateral purpose.
5. The learned Counsel for petitioner relied upon a judgment reported in Rana Vidya Bhushan Singh v. Shri Rati Ram, (1969) 1 SCWR 341.
6. This judgment is also very clear that an unregistered agreement of lease though inadmissible in evidence to prove right to immovable property, can be taken into consideration and can be admitted in evidence for collateral facts or purposes like character of possession. The agreement before Supreme Court was also an unregistered agreement, creating a lease for 15 years and was clearly held to be inadmissible under Section 49 of the Registration Act. The Supreme Court while noting the earlier judgments of various High Courts, held:
"It may be sufficient to refer to the judgment of this Court in Padma Vithoba Chakkava v. Mohd. Multani . In that case one R executed a usufructuary mortgage of the certain lands in favour of M. He later executed a sale deed of the same lands in favour of Rajanna, Rajanna found it difficult to obtain possession. Rajanna, R & M entered into an agreement under which the sale deed was cancelled by making endorsements on the deed and the lands were thereafter sold by R to M. After the death of Rajanna his legal representative filed a suit against M for possession of lands. M pleaded that the sale deed of 1923 was cancelled. The plaintiff urged that the endorsement was ineffective, as it was not registered and the sale deed in favour of M passed no title to him. In dealing with the question that the endorsement of cancellation was inadmissible in evidence, Venkatarama Aiyar, J., observed at p.236.
"The endorsement of cancellation on the back of the sale deed in favour of Rajanna dated December 21, 1923, has been held. x x x to be inadmissible in evidence as it is not registered. The result of it is only that there was no retransfer of title by Rajanna to the second defendant, and the family would in consequence continue to be the owner, and that is why the appellant is entitled to redeem But the endorsement taken along with the sale deed by the second defendant in favour of the first defendant is admissible in evidence to show the character of possession of the latter."
7. The respondent on the other hand submit that in later judgments by larger Benches, the Supreme Court has taken a different view. In this connection, reference is made to Anthony v. K.C. Ittoop and Sons and Ors., . This case was between a landlord and a tenant. The question before the Court was whether there was on facts a lease and if there was a lease, the jurisdiction of the Civil Court would stand excluded as the landlord had to approach the Rent Control Court to get an order of eviction. The High Court held that the appellant had failed to prove that independent of the void lease, there existed a landlord-tenant relationship. Accordingly, it decreed the owner's suit for recovery of possession and the matter went to Supreme Court. The three-Judge Bench of the Supreme Court while considering the matter, in Paras 11, 12 and 13 held:
"11. The resultant position is insurmountable that so far as the instrument of lease is concerned there is no scope for holding, that the appellant is a lessee by virtue of the said instrument. The Court is disabled from using the instrument as evidence and hence it goes out of consideration in this case, hook, line and sinker (vide Shantabai v. State of Bombay, , Satish Chand Makhan v. Govardhan Das Eyas and Bajaj Auto Ltd. v. Behari Lal Kohli, .
12. But the above finding does not exhaust the scope of the issue whether the appellant is a lessee of the building. A lease of immovable property is defined in Section 105 of the TP Act, A transfer of a right to enjoy a property in consideration of a price paid or promised to be rendered periodically or on specified occasions is the basic fabric for a valid lease. The provision says that such a transfer can be made expressly or by implication. Once there is such a transfer of right to enjoy the property a lease stands created. What is mentioned in the three paragraphs of the first part of Section 107 of the TP Act are only the different modes of how leases are created. The first para has been extracted above and it deals with the mode of creating the particular kinds of leases mentioned therein. The third para can be read along with the above as it contains a condition to be complied with if the parties choose to create a lease as per a registered instrument mentioned therein. All other leases, if created, necessarily fall within the ambit of the second para. Thus, dehors the instrument parties can create a lease as envisaged in the second para of Section 107 which reads thus:
"All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession."
13. When lease is a transfer of a right to enjoy the property and such transfer can be made expressly or by implication, the mere fact that an unregistered instrument came into existence would not stand in the way of the Court to determine whether there was in fact a lease otherwise than through such deed."
8. The learned Counsel for respondent also relied on a judgment reported in Bondar Singh and Ors. v. Nihal Singh and Ors., . This case deals with an unregistered sale deed and in para 5, the Supreme Court noted:
"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 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 plaintiff 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."
9. Therefore, there is no judgment as such from the Apex Court, which in our view, lays down that an unregistered lease deed which is compulsorily registerable, cannot be admitted in evidence even for the purpose of proving the nature of possession. True, such lease deeds cannot be used for the purpose of providing the terms of such lease or the lease itself, but they can certainly be used for the purpose of proving the nature of possession.
10. In our view, therefore, the judgments of the learned Single Judges of this Court referred to above, do not lay down the correct law. The reference is answered accordingly. The matter be listed before learned Single Judge.