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2020 Supreme(Telangana) 832

IN THE HIGH COURT OF STATE OF TELANGANA
A. Rajasekhar Reddy, J.
P. Srinivas Reddy – Appellant
Versus
P. Madhav Yadav and Ors. – Respondents
CRP No. 2165 of 2019
Decided On : 13-03-2020

Important Points

Point of law: 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

Subject

Contract Law - Specific Performance

Act Referred

REGISTRATION ACT : S.17, S.49
STAMP ACT : Art.47(a)

Headnote

Registration Act, 1908 - Section 17 , 49 - Indian Stamp Act, 1899 - Section 35 - Specific performance of agreement of sale - Original agreement of sale impounded and deficit stamp duty paid - Supplementary agreement of sale – Petitioner submits supplementary agreement of sale not in continuation of original agreement of sale - It is a separate agreement, to which both plaintiffs are parties and same is liable for stamp duty and registration – Respondent submits that multiple payments of stamp duty pertaining to very same transaction cannot be ordered and it is sufficient if principle document is stamped, since source of delivery of possession is original agreement –

Finding of the court : contention of petitioner that the document cannot be admitted in evidence for want of registration, cannot be accepted - As far as registration of said document is concerned, it is compulsorily registrable under Section 17 of the Registration Act, 1908 and unless same is registered, it cannot be admitted in evidence - As per the proviso to Section 49 of the Registration Act, the said document can be received as evidence of a contract in a suit for specific performance –

Result :Revision allowed.

Judgement Key Points

Key Points: - An unregistered document affecting immovable property required to be registered may be received as evidence of a contract in a suit for specific performance under Section 49 of the Registration Act, 1908 (!) . - Where an agreement of sale is impounded and deficit stamp duty paid, a supplementary agreement referring to delivery of possession is liable for stamp duty under Article 47-A of the Indian Stamp Act (!) . - In a suit for specific performance, the unregistered supplementary agreement can be admitted as evidence under the proviso to Section 49 of the Registration Act, 1908 (!) . - Section 35 of the Indian Stamp Act requires instruments chargeable with duty to be duly stamped to be admissible in evidence (!) . - The fact that both plaintiffs are parties to the supplementary agreement does not prevent it from being a separate agreement liable for stamp duty and registration (!) . - The original agreement of sale was impounded and stamp duty paid, but the supplementary agreement remained unregistered and improperly stamped (!) . - The schedule property in both the original and supplementary agreements is the same, and the supplementary agreement forms part of the transaction (!) . - As the suit is for specific performance, the unregistered document can be received as evidence under Section 49 of the Registration Act, 1908 (!) . - The contention that the supplementary agreement cannot be admitted in evidence for want of registration cannot be accepted in a suit for specific performance (!) . - The impugned order dismissing the impoundment application is set aside, and the revision is allowed to the extent of ordering impoundment of the supplementary agreement (!) (!) .

What is the effect of non-registration of a document required to be registered under the Registration Act, 1908 in a suit for specific performance?

What are the stamp duty implications for a supplementary agreement of sale that refers to delivery of possession?

What is the right of a party relying on an unregistered document in a suit for specific performance under Section 49 of the Registration Act, 1908?


Advocates:
Advocate Appeared:
For the Appellant : Gaddam Srinivas
For the Respondent: P. Shashi Kiran

ORDER :

A. Rajasekhar Reddy, J.

1. Respondents 1 and 2 herein are the plaintiffs. They filed the suit in OS No. 121 of 2009 on the file of Principal Senior Civil Judge, Rangareddy District at L.B. Nagar for specific performance of agreement of sale dated 7.5.2002 followed by supplementary agreement dated 17.4.2003. The agreement of sale was marked as Ex. A1 and the supplementary agreement was marked as Ex. A3 during the course of evidence of PW1, who is the 1st plaintiff. On the ground that Exs. A1 and A3 are not properly stamped and registered, the defendants in the suit filed LA No. 64 of 2015 in OS No. 121 of 2009 for expelling the said documents from marking. The Trial Court by order and decree dated 18.4.2019, dismissed the said interlocutory application. Aggrieved by the same, the 6th defendant in the suit, filed the present revision.

2. From the material on record and from the impugned order it could be seen that Ex. A1, is the original agreement of sale, which was impounded and deficit stamp duty was paid. Now the dispute is only with regard to Ex. A3 i.e., the supplementary agreement of sale dated 17.4.2003.

3. Learned Counsel for the petitioner submits that even under Ex. A3 supplementary agreement dated 17.4.2003, there are recitals to the effect that possession was delivered and hence the same is liable for stamp duty and registration. He submits that to the original agreement of sale dated 7.5.2002, only the 1st plaintiff is party, and to the supplementary agreement of sale dated 17.4.2003, both the plaintiffs are parties. Learned Counsel further submits that the supplementary agreement of sale is not in continuation of the alleged original agreement of sale, and it is a separate agreement, to which both the plaintiffs are the parties, and hence the same is liable for stamp duty and registration. As the said supplementary agreement is not properly stamped, it cannot be marked and the Trial Court oblivious of this fact, marked the said document as Ex. A3, and the same cannot be sustained. Therefore, the learned Counsel seeks to set aside the impugned order and submits that the supplementary agreement cannot be taken into consideration.

4. On the other hand, learned Counsel appearing for the contesting respondents 1 and 2 submits that the schedule property in both the agreements is one and the same. As there are recitals in the original agreement of sale with regard to delivery of possession, and as the document was not properly stamped, it was impounded and stamp duty and penalty was paid. The supplementary agreement is in continuation of the original agreement, and it is a verbatim of the earlier agreement and in the supplementary agreement, payment details and necessary permissions/clearances to be obtained by the parties, are agreed upon. Therefore, he submits that multiple payments of stamp duty pertaining to the very same transaction, cannot be ordered and it is sufficient if the principle document is stamped, since the source of delivery of possession is the original agreement. Learned Counsel further submits that it is a suit for specific performance and in the said suit, the unregistered documents can be admitted in evidence in view of the proviso to Section 49 of the Registration Act, 1908. Learned Counsel submits that the Court below considering all the facts and circumstances of the case, dismissed the present interlocutory application filed by the defendants, and the same may not be interfered with by this Court.

5. In this case it is to be seen that to the original agreement, only one of the plaintiffs is the party, and it is stated that the same has already been impounded, and to the supplementary agreement, both the plaintiffs are parties and in the supplementary agreement, there are recitals with regard to delivery of possession. When once party to litigation relies on a document, which is liable to be stamped as per the provisions of the Indian Stamp Act, 1899 (for short 'the Act') the same cannot be adm

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