Indian Kanoon - Search engine for Indian Law

"12. 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 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 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 (12 of 30) [CWs-15760/15 & 6437/13] 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."

It is thus trite that exceptions carve out in the proviso to Section 49, shall apply to evidence of a contract in a suit for specific performance by way of an unregistered document affecting immovable property and required by the Registration Act or the Transfer of Property Act to be registered, or as evidence of any collateral transaction, not required to be affected by registered document. The exception to receive a document in evidence for collateral purpose is available only for unregistered document, but not for an unstamped document. In view of the discussion, there was no apparent conflict between the view taken by constitution bench judgement in Javer Chand, supra and Avinash Kumar Chauhan.

"10.......the lease deed Ex. P1 dated 19th May, 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 lessee for residential purposes only". This clearly evinces that the property in question was let out to the tenant for his residence only...."

We shall now deal with the first question formulated by the learned Single Judge in the reference order doubting correctness of the judgement of Single Benches of this Court in (i) Smt. Indu, supra and (ii) Smt. Prembai, supra on the premise that they have been decided without taking note of the Constitution Bench judgement of Supreme Court in Javer Chand & Ors., supra.

The judgement of Single Bench in Smt. Indu, arose out of a suit for specific performance. The dispute was with regard to an agreement to sell, both unstamped and unregistered, which was accepted in evidence by the trial court for collateral purposes. During the pendency of the suit, the defendant filed an application before the trial court under Order 12 Rule 3 CPC read with Sections 17 and 49 of the Registration Act and Sections 33 and 35 of the Indian Stamps Act. In the application, it was mentioned that document dated 11.5.1969 written on plain paper was neither properly stamped nor registered and therefore the same is inadmissible in evidence. The trial court allowed the said application and declared the document aforementioned filed by the plaintiff-respondent to be inadmissible in evidence. The plaintiff-respondent preferred writ petition before this Court, but (17 of 30) [CWs-15760/15 & 6437/13] the same was dismissed, though keeping it open for the plaintiff- respondent, if he so desired, to make a prayer to the trial court to consider the document for collateral purpose. The plaintiff- respondent pursuant to that liberty granted by this Court, moved such application before the trial court with the prayer that the document may be admitted in evidence for collateral purposes for establishing the nature of possession over the disputed plot. The defendant by filing the reply to the application contested the same. The trial court allowed the application filed by the plaintiff- respondent and admitted the document in evidence for collateral purposes. It was this order, which was challenged by the defendant in the writ petition before this Court on the ground that the learned trial court has wrongly allowed the application ignoring the judgement of the Supreme Court in Avinash Kumar Chauhan, supra. The learned Single Judge of this Court relying on the judgement in Avinash Kumar Chauhan, supra held that the document being unstamped and unregistered, in view of Section 35 of the Registration Act, which bars such document for evidence "for any purpose whatsoever", was not admissible in evidence even for collateral purposes. It may be noted that in Indu's case, the question with regard to payment of deficient stamp duty and penalty was not raised and therefore this question was not at all considered. The only issue that was raised was whether an unstamped and unregistered document can be taken into consideration even for collateral purposes. It was held that the proviso to Section 49 of the Registration Act carves out an exception to Section 17 of the Act, in that an unregistered agreement to sell to be read in evidence in a suit for specific (18 of 30) [CWs-15760/15 & 6437/13] performance. But if it is unstamped or inadequately stamped, Section 35 of the Stamp Act, 1895, which is in pari materia with Section 39 of the Rajasthan Stamp Act, gets attracted, which bars admissibility of the same for any purpose whatsoever. The learned Single Judge in taking that view has relied on the judgement of the Supreme court in Avinash Kumar Chauhan, supra, which has discussed the complete law on interpretation of Section 35 of the Stamp Act. The Constitution Bench judgement of the Supreme Court in Javer Chand, supra was however decided on applicability of Section 36 of the Stamp Act, which provides that "when an instrument has been admitted in evidence, such admission shall not except provided in Section 61, be called in question at any stage of the same suit or proceeding on the ground the instrument has not been duly stamped." There is thus no conflict of opinion between these two Supreme Court judgements. The judgement of learned Single Judge in Indu (Smt.), supra, in our view, has been correctly decided.