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Andhra High Court · body

2019 DIGILAW 32 (AP)

V. Madhusudhan Rao v. S. Nirmala Bai

2019-03-06

D.V.S.S.SOMAYAJULU

body2019
JUDGMENT : 1. This civil revision petition is filed questioning the order dated 4-1-2018 in I.A.No.839 of 2017 in O.S.No.241 of 2009 passed by the Additional Senior Civil Judge, Mandanapalle. 2. The suit O.S.No.241 of 2009 is filed for partition of the plaint schedule property and to allot a share to the plaintiffs. In the said suit, the plaintiffs have taken a plea by way of amendment that a sale deed dated 31-1-1987 which is executed in favour of defendant No.4 is not valid. The sale deed dated 31-1-1987 is an unregistered document executed on stamp paper worth Rs.5/-. The plaintiffs filed a petition under Order 13 Rule 3 read with Sections 17 and 49 of the Registration Act, read with Section 151 CPC., for a direction that the said document cannot be accepted in evidence as it is not registered and is not adequately stamped. Respondents filed a counter in this application I.A.No.839 of 2017 stating that they are ready to pay the stamp duty and penalty on the document. They also admit that the unregistered sale deed is admissible for a collateral purpose of proving the possession of the suit schedule property by the defendants. This application came to be allowed and the impugned order came to be passed on 4-1-2018. 3. The Court below held that the unregistered sale deed can only be received for the collateral purpose of proving the possession of defendant No. 4 and for no other purpose. Questioning the same, the present civil revision petition is filed. 4. This Court has heard Sri N. Pramod, learned counsel for the petitioner and Sri R. Radha Krishna Reddy, learned counsel for the respondents. 5. Learned counsel for the respondents argued that the lower Court committed a serious error in receiving the document for a collateral purpose. According to him, the documents is admittedly unregistered, and that a patent error was committed by the trial Court in receiving the document. Learned counsel relies upon judgments of the Hon’ble Supreme Court of India reported in Sita Ram Bhama v. Ramvatar Bhama, Laws (SC) 208 (3) 36 and Yellapu Uma Maheswari v. Buddha Jagadheeswararao, Laws (SC) 2015 (10) 30. He argues that the substance of the transaction has to be determined with reference to the terms of the document and that as the suit is filed for partition, the document should not have been received in evidence. He argues that the substance of the transaction has to be determined with reference to the terms of the document and that as the suit is filed for partition, the document should not have been received in evidence. It is his contention that in the counter filed, the respondents have agreed that the document suffers from registration and lack. of stamp duty. The contention of the learned counsel is that the respondents in the revision and the petitioners in the interlocutory application are using the said document to prove their title to the property. Therefore, the counsel contends that the lower Court committed a serious error in allowing the application. 6. On the other hand, the respondents contend that the document can be received, for establishing the collateral purpose of the possession. Learned counsel relies upon judgment reported in Annamadevulu Chandrarao v. M Veera Raghavulu 2015 (4) ALT 463 and argues that the document can be received for a collateral purpose. 7. The question that arises for consideration is: whether the Court below committed any error in passing the impugned order. 8. A reading of the order shows that the lower Court held that the document could be received for the collateral purpose of proving the possession of defendant No. 4, but riot for the title. In view of the fact that this is an issue that arises frequently, this Court heard both learned counsel at length. 9. A document which is not stamped as required under law cannot be received in any evidence for any purpose. Section 35 of the Indian Stamp Act, 1899 makes this very clear. However, this is a curable defect and if the stamp duty and penalty is paid thereafter, the document becomes admissible. The proviso to Section 35 of the Indian Stamp Act, deals with this. Thus, the defect of stamp duty or deficit stamp duty is a curable defect, but till the stamp duty/penalty is paid, the document is totally inadmissible for any purpose (main or collateral). The following cases are relevant for this. Tatineni Venkata Subba Rao v. Kodali Jayalaxmi Devi 2018 (4) ALT 1 and Mandati Srinivas v. Gatla Raji Reddy, 2017 (3) ALT 699. 10. This Court is Tatineni Venkata Subba Rao’s case (supra) held as follows: 22. The following cases are relevant for this. Tatineni Venkata Subba Rao v. Kodali Jayalaxmi Devi 2018 (4) ALT 1 and Mandati Srinivas v. Gatla Raji Reddy, 2017 (3) ALT 699. 10. This Court is Tatineni Venkata Subba Rao’s case (supra) held as follows: 22. Therefore, on a review of the entire case law available on record, this Court is of the opinion that an insufficiently stamped document cannot be received in evidence for any purpose (main or collateral). If an insufficiently stamped document comes before a Court, a duty is cast upon the Court to impound the document by following the procedure under the Stamp Act and ensure that the requisite stamp duty is paid. Only after the requisite stamp duty is paid, the document becomes admissible in evidence. If the duty/penalty is not paid, it is wholly inadmissible. 11. Coming to the aspect of registration, Section 49 of the Registration Act, states that no document which has to be registered shall be received in evidence of any transaction effecting such property unless it is registered. Section 49 is to the following effect: 49. Effect of non-registration of documents required to be registered:- No document required by Section 17 I[or by any provision of the Transfer of Property Act, 1882 (4 of 1882)], to be registered shall- (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered: Provided that an un registered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 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 any collateral transaction not required to be effected by registered instrument. (emphasis supplied) 12. Thus, it is clear that as per the proviso to Section 49 of the Act, an unregistered document could be received in the following two circumstances, (1) as evidence of a contract in a suit for specific performance (2) as evidence of a collateral transaction not required to be effected by a registered instrument. 13. The next question therefore that falls for consideration is, what exactly is a collateral transaction. 14. 13. The next question therefore that falls for consideration is, what exactly is a collateral transaction. 14. The Hon’ble Supreme Court of India in a case reported in K.B. Saha and Sons (P) Ltd., v. Development Consultant Ltd. (2008) 8 SCC 564 : 2009 (5) ALT 32.1 (DN SC) reviewed the law on the subject and enunciated following five (5) principles: “1. A document required to be registered, if unregistered is not admissible into evidence under Section 49 of the Registration Act. 2. Such unregistered document can however be used as an evidence of collateral purpose as provided in the proviso to Section 49 of the Registration Act. 3. A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration. 4. A collateral transaction must be a transaction not itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immovable property of the value of one hundred rupees and upwards. 5. If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose.” 15. Therefore, it is now clear that (1) a collateral transaction is a transaction which is independent of, or divisible from, the transaction which by law requires registration. (2) a term of a document cannot be proved by using the document which is inadmissible for want of registration. Proving a term in a document cannot be really called as a collateral purpose, particularly, in a case like this. In the case on hand, the document that is sought to be marked is styled as a sale deed. The recitals in the document refer to it as sale deed only. The body of the document clearly mentions that the property is being sold for a total sale consideration of Rs.79,000/- and having received the said amount the possession is delivered to the purchaser. Therefore, the payment of sale consideration, transfer of title and delivery of possession are an integral part of the same transaction. This delivery of possession which the petitioner wants to prove is not a transaction independent of, or divisible from the other part of the transaction in the document. Therefore, the payment of sale consideration, transfer of title and delivery of possession are an integral part of the same transaction. This delivery of possession which the petitioner wants to prove is not a transaction independent of, or divisible from the other part of the transaction in the document. The law on the subject has been succinctly laid down by the Hon’ble Supreme Court of India. It clearly states that if the transaction is separate and distinct from the main transaction, it is a collateral transaction. Similarly, if the document itself is inadmissible for want of registration, none of the terms of the document can be used for a collateral purpose also. In Annamadevulu Chandrararo’s case (3 supra) cited by the respondent, the suit was filed for partition. In the course of examination of D.W.1, a document was sought to be filed which has an enumeration of the shares allotted to each sharer in an earlier oral partition. This is clear from para 2 of the judgment. In those circumstances, i.e., an earlier partition and the later enumeration of the shares, the learned single Judge of this Court held that the document was admissible and it can be received in evidence for a ‘collateral’ purpose. In Para 12 of the judgment, the learned single Judge clearly cautioned that the document can be received by making an endorsement on the face of it that it is marked for a collateral purpose of proving the possession of the defendant. Learned single Judge also cautioned that the document shall not be looked into for the purpose of establishing the share of the respective parties. 16. I n the case on hand, if the circumstances are taken into consideration, the case of defendant No.4 is that they have purposed the property under a sale deed dated 31-8-1997 and that their predecessor in title was put in possession of the property pursuant to the said sale deed. It is very clearly mentioned in para 8 of the written statement that Raja Bai sold away Ac. 1.80 cents of land along with her share in the well, electric motor etc., to Boyapati Padmavathamma under a sale deed dated 31-1-1987 for valid consideration of Rs.79,000/- and put her in possession of the property. The contents of the document are also to the same effect. 17. 1.80 cents of land along with her share in the well, electric motor etc., to Boyapati Padmavathamma under a sale deed dated 31-1-1987 for valid consideration of Rs.79,000/- and put her in possession of the property. The contents of the document are also to the same effect. 17. In that view of the matter, this Court is of the opinion that the sale deed in question cannot be received in evidence as it is not registered. It cannot also be received for a collateral purpose for the simple reason that the possession is not a collateral transaction that is independent or divisible from transfer recorded in the sale deed. As the document is not registered, none of its terms can also be looked into. 18. Hence, for all these reasons, this Court is of the opinion that the lower Court committed an error in allowing the document to be marked for a collateral purpose. The impugned order is therefore set aside and the civil revision petition is allowed. No order as to costs. 19. As a sequel, miscellaneous petitions, if any, pending in this revision shall stand closed.