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2022 DIGILAW 1100 (AP)

Nerusu Ramesh v. Polavarapu Venkata Krishna Rao

2022-10-20

B.S.BHANUMATHI

body2022
ORDER : 1. This civil revision petition, under Article 227 of the Constitution of India, by the plaintiff is directed against the orders, dated 31.12.2019, passed in OS.No.192 of 2015 on the file of the Court of V Additional District Judge, Vijayawada. 2. Heard Sri Yellabandi Ramatirtha, learned counsel appearing for the revision petitioner/plaintiff. Notice sent to the respondents to the same address as given before the trial Court returned un-served. 3. The facts, in brief, are that the 1st defendant entered into an agreement of sale, dated 02.07.2013, in favour of the 2nd defendant for a total consideration of Rs.15,00,000/-. In pursuance of the said agreement, the 2nd defendant paid Rs.7,50,000/- towards part of consideration. However, the 1st defendant failed to comply his part of contractual obligation as per the sale agreement. Hence, the 2nd defendant filed a suit for specific performance of the agreement, dated 02.07.2013, in O.S.No.82 of 2014 on the file of XIII Additional District Judge, Vijayawada, against the 1st defendant and the same is pending. When the said agreement of sale, dated 02.07.2013, is sought to be marked in the present suit, O.S.No.192 of 2015, the plaintiff raised an objection on the ground that it is inadmissible in evidence for want of sufficient stamp duty and registration. (b) The 2nd defendant filed counter stating that he intend to produce the said document to put forth his defence and that under the sale agreement, dated 02.07.2013, he is not claiming any rights in the suit and filing of the said document is intended only to establish that there is an agreement between himself and the 1st defendant and therefore, it does not require registration and stamp duty. 4. The trial Court, by the order impugned in this revision, overruled the objection of the plaintiff and permitted the 2nd defendant to mark the document, dated 02.07.2013. 5. Aggrieved thereby, the plaintiff filed this revision contending that the agreement of sale, dated 02.07.2013, relied on by the 2nd defendant is a compulsorily registerable document in view of Section 17(1)(g) of the Registration Act, as the 2nd defendant failed to show the purpose for which the document is sought to be marked. 5. Aggrieved thereby, the plaintiff filed this revision contending that the agreement of sale, dated 02.07.2013, relied on by the 2nd defendant is a compulsorily registerable document in view of Section 17(1)(g) of the Registration Act, as the 2nd defendant failed to show the purpose for which the document is sought to be marked. The trial Court failed to consider the A.P Amendment Act IV of 1999, i.e., Section 17(1)(g) which does not make any distinction between possessory or non possessory agreements and making all agreements of sale compulsorily registerable with effect from 01.04.1999. The reasons assigned by the trial Court are unsustainable. The order impugned is liable to be set aside. 6. The main contention of the revision petitioner is that an unregistered agreement of sale can be used as evidence even for the main purpose only in a suit for specific performance, whereas the 2nd defendant wants to file an unregistered agreement of sale as evidence on his behalf to establish his defence based on the agreement of sale and thereby, it is the main purpose for which he wants to file the same in evidence, and therefore, the trial Court committed error in receiving it as evidence for collateral purpose which is permitted under Section 49 of the Registration Act, 1908. 7. There is no dispute as to the fact that the unregistered agreement of sale which is sought to be filed by the 2nd defendant requires registration as per Section 17(1)(g) of the Registration Act. Section 49 of the Registration Act deals with the effect of a document which is not registered, though it requires registration under Section 17 of the Registration Act or under any provisions of the Transfer of Property Act, 1882 and it prohibits its receipt in evidence while providing exceptions. 8. For better appreciation, Section 49 of the Registration Act is excerpted hereunder: “49. 8. For better appreciation, Section 49 of the Registration Act is excerpted hereunder: “49. Effect of non-registration of documents required to be registered – No document required by Section 17 or by any provisions of the Transfer of Property Act, 1882 to be registered shall: (a) Effect 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 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 under Chapter II of the Specific Relief Act, 1877, or as evidence of any collateral transaction not required to be effected by registered instrument.” 9. Thus, it is clear that if a document which requires registration, is not registered, it cannot be received in evidence for the purpose of showing the transaction which requires registration, but the same can be received in evidence in respect of a collateral transaction, that too if it does not require registration. 10. Learned counsel for the petitioner placed reliance on the decision of this Court in Lakkoji Mohana Rao v. Lakkoji Viswanadham and others, [ 2012 (3) ALT 476 (S.B)] wherein the principles for marking documents have been set out after referring to various decisions of this High Court and other High Courts. It was held as follows: “From the principles laid down in the various decisions of this Court and the High Courts, as referred to hereinabove, it is evident that : 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 affect 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. 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 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.” 11. He further placed reliance on the decision of this Court in Ranga Reddy v. Sadhu Padamma and others, [ 2003 (1) ALT 228 (S.B)] wherein an unregistered gift deed is sought to be filed in evidence for collateral purpose. After analyzing Section 49 of the Registration Act, this Court held that an unregistered document not required to be affected by registered instrument can only be used for collateral purposes and that if a transaction, which affects immovable property and requires registration either under the Registration Act or under the Transfer of Property Act cannot be proved by a document marked for a collateral purpose. In the context of the proposition set out, it was held that the document in question, which is a gift deed evidences a transaction affecting immovable properties and is required to be registered under Section 17(1)(a) of the Registration Act, and therefore it does not fall under the third exception which deals with collateral transaction. 12. Learned counsel for the revision petitioner further placed reliance on the decision of this Court in Sakalabhaktula Lalitha W/o Simhachalam v. Nandana Ranga Rao (died) by LRs., [ 2012 (3) ALT 1 ], wherein, it was held that ‘collateral purpose’ means not for the main purpose i.e. it can be used only for the purpose of proving the possession or status of the parties, but when the recitals of the document are very clear and the purpose of filing a document is only to establish tenancy rights accrued to a party, that means creating rights in a party or to establish rights created under a document, it cannot be said that such document can be used for collateral purpose. In that case, an unregistered lease deed was sought to be adduced in evidence stating that the document contemplates a covenant to execute a regular lease deed to be registered on a fixed date. In that case, an unregistered lease deed was sought to be adduced in evidence stating that the document contemplates a covenant to execute a regular lease deed to be registered on a fixed date. However, the Court declined to receive the document in evidence as it is a lease deed but not an agreement to enter into a lease deed and that it is being used for main purpose of establishing the right of tenancy under the said document. 13. In this backdrop, learned counsel for the revision petitioner contends that in the present case, the defendants relied on the agreement of sale for the main purpose of establishing that there is an agreement of sale between the 1st defendant and the 2nd defendant in various items of property involved in the present suit. 14. The 2nd defendant filed another suit in O.S.No.82 of 2014 for specific performance of the agreement which document is now proposed to be filed in evidence, against not only the 1st defendant but also the plaintiff herein. It is pertinent to note that the plaintiff also filed the present suit for specific performance based on the unregistered possessory agreement of sale, dated 09.06.1993, alleged to have been executed by the 1st defendant. However, the plaintiff contends that since an exception is carved out under Section 49 of the Registration Act, the present suit can be maintained based on an agreement of sale, though unregistered, whereas the 2nd defendant cannot file unregistered agreement of sale between the 2nd defendant and the 1st defendant as it is not being filed in a suit seeking specific performance of that agreement, and further that the same cannot form collateral transaction in the present suit. 15. The trial Court allowed receipt of the said document in evidence holding that it can be used for collateral purpose and that since it is agreement of sale without possession duly executed on stamp worth Rs.100/-, the same does not require more stamp duty and the same can be received in evidence. It further noted that the 2nd defendant intended to prove a fact that he has filed another suit based on the said document and the said purpose is only a collateral purpose. 16. It further noted that the 2nd defendant intended to prove a fact that he has filed another suit based on the said document and the said purpose is only a collateral purpose. 16. As is noted, the proviso to Section 49 of the Registration Act permits an unregistered document as evidence for the purpose of establishing collateral transaction which does not require registration. That apart, another exception permitted in a suit for specific performance, is receipt of an unregistered document of a contract in evidence. It does not say that suit must be for the enforcement of the said contract. There are no other words qualifying or limiting its scope and application. It does not say that it can be filed by the plaintiff alone. Thus, though on a plain reading, it appears to be impermissible, the possibility of even a defendant filing such a contract in suit for specific performance cannot be ruled out in the circumstances, like the present case, which normally does not exist. 17. That apart, collateral purpose is not the purpose which the main transaction covered under the document. Obviously, in an agreement of sale, the main transaction is agreement to sell. But, there is subtle distinction in the present case, as the 2nd defendant proposes to file this document not for establishing the contract of agreement of sale for the purpose of enforcing right there under, but as a matter of fact that there is an agreement of sale for enforcement of which he filed a suit against the 1st defendant in relation to the same property as these facts have already been pleaded in the written statement. Therefore, by bringing this document in evidence, the 2nd defendant wants to establish ‘collateral purpose’ for filing another suit based on this document. Therefore, by allowing this document to read in evidence, it can be limited only to that extent. On a first look, it appears as if the document is said to prove the transaction which needs registration. But, on a careful understanding and noticing the thin line of distinction, it is clear that the purpose of filing the document is distinct. As such, there is no error or illegality committed by the trial Court in allowing the said document to be a part of evidence and there is no merit in the revision. 18. In the result, the Civil Revision Petition is dismissed. As such, there is no error or illegality committed by the trial Court in allowing the said document to be a part of evidence and there is no merit in the revision. 18. In the result, the Civil Revision Petition is dismissed. There shall be no order as to costs. Miscellaneous petitions pending, if any, shall stand closed.