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“11. Section 49 makes it clear that a document which is compulsorily registrable, if not registered, will not affect the immovable property comprised therein in any manner. It will also not be received as evidence of any transaction affecting such property, except for two limited purposes. First is as evidence of a contract in a suit for specific performance. Second is as evidence of any collateral transaction which by itself is not required to be effected by registered instrument. A collateral transaction is not the transaction affecting the immovable property, but a transaction which is incidentally connected with that transaction. The question is whether a provision for arbitration in an unregistered https://www.mhc.tn.gov.in/judis document (which is compulsorily registrable) is a collateral transaction, in respect of which such unregistered document can be received as evidence under the proviso to Section 49 of the Registration Act.
“16. Then the next question that falls for consideration is whether these can be used for any collateral purpose. The larger Bench of the https://www.mhc.tn.gov.in/judis Andhra Pradesh High Court in Chinnappareddigari Peda Mutyala Reddy v. Chinnappareddigiri Venkata Reddy has held that the whole process of partition contemplates three phases i.e. Severancy of status, division of joint property by metes and bounds and nature of possession of various shares. In a suit for partition, an unregistered document can be relied upon for collateral purpose i.e., severency 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 want 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.

On careful perusal of the above said judgments, it is crystal clear that as per Section 49 of Registration Act, it makes clear that the document https://www.mhc.tn.gov.in/judis which is compulsorily registrable, if not registered, will not affect the immovable property comprised therein in any manner and it will also not be received as evidence of any transaction affecting such property, except for evidence of a contract in a suit for specific performance and evidence of any collateral transaction which by itself is not required to be effected by registered instrument. In the case on hand, Ex.A.4 and Ex.A.5 are said to be release deeds which are compulsorily registrable under Section 17 of Registration Act and thereby, those documents cannot be received as evidence, which is affecting immovable property. Moreover, the said documents are unstamped. Further, as per proviso of Section 49 of Registration Act, unregistered documents can be received for collateral purpose. However, in the present case, the Plaint averments shows that the Suit is filed for declaration and injunction based on those documents Ex.A.4 and Ex.A.5 as main purpose. Therefore, those documents cannot be received even for collateral purpose. Moreover, there is no pleadings in the Plaint that those documents can be relied upon for the collateral purpose. Per contra, the pleadings shows that those documents relied on for the main purpose of relinquishment of rights by the parties in respect of immovable properties. Therefore, those judgments are noway helpful to decide the case https://www.mhc.tn.gov.in/judis in favour of the petitioner / plaintiff.

On careful perusal of the above said judgments, it is clear 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 comply with the requirements of Section 35 of the Stamp Act, if not stamped, as a document cannot be https://www.mhc.tn.gov.in/judis 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. In the case on hand also, the documents are unregistered and unstamped release deeds. As per Section 49 of the Registration Act, the said documents can be received for collateral purpose provided they have to be stamped / penalty has to be paid. The Suit is filed for the relief of declaration in respect of immovable property based on the documents Ex.A.4 and Ex.A.5 and thereby, the documents are for that main purpose and not for collateral purpose and thereby, the said documents cannot be received, even if the stamp duty and penalty is paid. Therefore, it is unnecessary to direct to make payment of stamp duty penalty and thereafter, to receive the documents as evidence. The above said exercises are only empty formalities and purpose will not be served. Therefore, this Court is of the opinion that even if payment of stamp duty penalty is paid due to non-registration, the documents cannot be received as evidence, as there is no any collateral purpose. The Trial Court, also in its order rightly held that unregistered and unstamped documents cannot be received as evidence and thereby, the order passed by the Trial Court is in order and warrants no interference. https://www.mhc.tn.gov.in/judis