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HIGH COURT OF RAJASTHAN - RAJASTHAN HIGH COURT PRINCIPAL SEAT JODHPUR
Pushpendra Singh Bhati, J
Baldev Acharya – Appellant
Versus
Shiv Kumar Acharya – Respondent
S.B. Civil Writ Petition No. 5754/2018|S.B. Civil Writ Petition No. 7926/2018



Advocates:
For the Appellants/Petitioners: Rakesh Arora
For the Respondents: Suresh Shrimali, Rishabh Shrimali, Abhimanyu Singh Rathore, Sandeep Shah

Unregistered documents that are mandatorily registrable under the Registration Act are inadmissible to prove title in a suit for declaration. They can only be admitted for collateral purposes if the transaction is independent and divisible from the primary transfer, and stamp duty payment does not cure the lack of registration.

Headnote:(A) Registration Act, 1908 - Sections 17(1)(b) and 49 - Transfer of Property Act, 1882 - Section 54 - Admissibility of unregistered documents - Compulsory registration - Documents pertaining to transfer of immovable property worth one hundred rupees and upwards require mandatory registration - Unregistered documents affecting such property are inadmissible in evidence for main purpose of proving title - Proviso to Section 49 allows use for collateral purposes only if transaction is independent of and divisible from primary transaction required to be registered. (Paras 26, 27, 28, 30)

(B) Indian Stamp Act, 1899 - Sections 33, 35 - Procedures for impounding and admission - Unstamped or insufficiently stamped instruments are inadmissible in evidence and shall not be acted upon unless proper stamp duty and penalty are paid - Impounding is mandatory, but payment of stamp duty does not cure the defect of lack of registration for a document that is compulsorily registrable. (Paras 15, 19, 20, 30)

(C) Evidence - Admissibility - Principles of collateral purpose - A transaction cannot be termed 'collateral' if it is not independent of or divisible from the document's primary purpose. (Paras 27, 30)

Facts of the case:
The litigation involves competing challenges to a trial court's order concerning the admissibility of three documents related to property transfers in a suit for declaration and permanent injunction. One party challenged the rejection of an agreement to sell, while another challenged the admission of a sales deed and an agreement to sell, all of which remained unregistered.

Findings of Court:
The court held that all documents purporting to transfer ownership of immovable property valued above one hundred rupees are mandatorily registerable. Since the suit involved title declaration, the unregistered nature of these instruments rendered them inadmissible. Their primary purpose (proof of sale/title) could not be camouflaged as a 'collateral purpose'.

Issues: Whether unregistered documents, which are compulsorily registrable for transferring property, are admissible in evidence in a suit for declaration and permanent injunction, and whether such documents can be admitted for collateral purposes after payment of stamp duty.

Ratio Decidendi: Registration under the Act is a conclusive legal mandate; failure to register renders a transfer document inadmissible for proving title. The collateral purpose exception in the Act applies only to transactions divisible and independent of the primary purpose for which the law requires registration. Payment of stamp duty does not cure the lack of registration for documents mandatorily requiring it under the law.

Result: Impugned orders modified; documents held inadmissible.

Table of Content
1. dispute regarding admissibility of unregistered sale-related documents. (Para 1 , 2 , 3 , 4)
2. plaintiff arguments on collateral purpose and impounding for stamp duty. (Para 5 , 6 , 7 , 8 , 9 , 10)
3. defendant arguments against admissibility due to mandatory registration requirements. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23)
4. analysis of section 17 registration act and section 54 tpa. (Para 24 , 25 , 26 , 27 , 28 , 29)
5. unregistered, compulsorily registrable documents are inadmissible in evidence. (Para 30 , 31)

Judgment

Reportable

12/11/2021

1. These writ petitions have been preferred claiming the following reliefs:

S.B. Civil Writ Petition No. 5754/2018:

“It is, therefore, most respectfully prayed that this writ petition may kindly be allowed with costs and by issuing an appropriate writ, order or direction the impugned order dated 8.3.2018 (Annx.3) to the extent of declining to exhibit the document i.e. agreement to sale dated 5.6.1998 (Annx.4) in evidence, may be quashed and the petitioner may be allowed to exhibit the said documents in evidence before the learned trial court.”

S.B. Civil Writ Petition No. 7926/2018:

“It is, therefore, most respectfully prayed that this Hon’ble Court may very graciously be pleased to accept and allow this writ petition and by an appropriate writ, order or direction in the nature thereof thereby, the impugned order dated 08.03.2018 (Annexure-7) passed by the learned Additional District Judge No.2, Bhilwara in Civil Suit No.122/2014 while rejecting the objection raised by the petitioner in regard documents dated 15.02.1971 and 09.09.1988 may kindly be quashed and set aside and the objection raised by the petitioner may kindly be allowed and documents dated 15.02.1971 and 09.09.1988 may kindly be treated not admissible in evidence.”

2. Both the present petitions are having a common issue i.e. admissibility of certain documents supporting the sale in a suit for declaration and permanent injunction.

3. The impugned order dated 08.03.2018 passed by the learned trial court has dealt with admissibility of the three documents, namely, sale deed dated 15.02.1971 and agreements to sell dated 09.09.1988 & 05.06.1998.

4. Vide the impugned order, the learned trial court has allowed the admissibility of the aforementioned documents dated 15.02.1971 and 09.09.1988, and thus, the defendant has challenged the same by filing CWP No.7926/2018; whereas, the admissibility of the agreement to sell dated 05.06.1998 has been denied by the learned trial court vide the impugned order, and thus, the plaintiff has challenged the same in CWP No.5754/2018.

5. Mr. Rakesh Arora, learned counsel for the plaintiff submits that the documents in question do not require registration or stamping so as to become admissible in evidence.

6. Learned counsel for the plaintiff, while referring to proviso to Section 49 of the Registration Act, 1908 (hereinafter referred to as ‘the Registration Act’), tries to impress upon the Court that the document in question is pertaining to evidence for collateral purposes, and thus, falls under the exception of mandatory requirement of registration and stamping.

7. Learned counsel for the plaintiff further submits that at best, the learned trial court could have directed the document in question to be impounded, and after payment of proper stamp duty, the same ought to be declared admissible.

8. Learned counsel for the plaintiff relied on the judgment rendered by this Hon’ble Court in Munna Lal Vs. Prem Bai & Ors. (S.B. Civil Writ Petition No.8970/2008, decided on 06.01.2017), relevant portion of which reads as under:

“12. From above, it is seen that Section 17 (1) (b) of the Act of 1908 mandates that any document which has the effect of granting or taking away the right in an immovable property must be registered, where as Section 49 of the Act of 1908 imposes a ban on the admissibility of an unregistered documen

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