2015 (10) TMI 2768 - SC - Indian Laws

Partition of immovable property - admissibility of evidence - Whether the Courts below were right in holding that Exhibits B21 and B22 are not admissible in evidence as they are compulsorily registerable documents? - Whether Exhibits B-21 and 22 are admissible in evidence for collateral purpose? HELD THAT - Section 17 (1) (b) of the Registration Act mandates that any document which has the effect of creating and taking away the rights in respect of an immovable property must be registered and Section 49 of the Act imposes bar on the admissibility of an unregistered document and deals with the documents that are required to be registered u/s 17 of the Act. It is well settled that the nomenclature given to the document is not decisive factor but the nature and substance of the transaction has to be determined with reference to the terms of the documents and that the admissibility of a document is entirely dependent upon the recitals contained in that document but not on the basis of the pleadings set up by the party who seeks to introduce the document in question. A thorough reading of both Exhibits B-21 and B-22 makes it very clear that there is relinquishment of right in respect of immovable property through a document which is compulsorily registerable document and if the same is not registered becomes an inadmissible document as envisaged under Section 49 of the Registration Act - Hence Exhibits B-21 and B-22 are the documents which squarely fall within the ambit of section 17 (i) (b) of the Registration Act and hence are compulsorily registerable documents and the same are inadmissible in evidence for the purpose of proving the factum of partition between the parties. Whether these can be used for any collateral purpose? - HELD THAT - In a suit for partition an unregistered document can be relied upon for collateral purpose i.e. severancy of title nature of possession of various shares but not for the primary purpose i.e. division of joint properties by metes and bounds. An unstamped instrument is not admissible in evidence even for collateral purpose until the same is impounded. Hence if the appellants/defendants want to mark these documents for collateral purpose it is open for them to pay the stamp duty together with penalty and get the document impounded and the Trial Court is at liberty to mark Exhibits B-21 and B- 22 for collateral purpose subject to proof and relevance. Exhibits B-21 and B-22 are admissible in evidence for collateral purpose subject to payment of stamp duty penalty proof and relevancy. Appeal allowed in part.

Summary

Issues Involved:
1. Admissibility of Exhibits B21 and B22 as evidence.
2. Whether Exhibits B21 and B22 can be used for collateral purposes.

Issue-wise Detailed Analysis:

1. Admissibility of Exhibits B21 and B22 as Evidence:

The case revolves around the admissibility of Exhibits B21 and B22, which are claimed to be a Deed of Memorandum and an Agreement, respectively. The plaintiff/respondent No.1 objected to these exhibits on the grounds that they should be considered relinquishment deeds, which are compulsorily registerable under Section 17(b) of the Registration Act, 1908. Both the Trial Court and the High Court upheld this objection, concluding that these documents were not evidencing past transactions but rather partition of property and relinquishment of rights, thus requiring registration and stamp duty under the Indian Stamp Act, 1899, and the Registration Act, 1908. Since Exhibits B21 and B22 were unregistered and unstamped, they were deemed inadmissible in evidence.

2. Whether Exhibits B21 and B22 Can Be Used for Collateral Purposes:

The appellants argued that even if the documents required registration, they should still be admissible for collateral purposes. The Supreme Court referred to Section 49 of the Registration Act, 1908, which allows unregistered documents to be received as evidence of any collateral transaction not required to be effected by registered instruments. The Court noted that the larger Bench of the Andhra Pradesh High Court in Chinnappa Reddy Gari Muthyala Reddy Vs. Chinnappa Reddy Gari Vankat Reddy held that in a suit for partition, an unregistered document could be relied upon for collateral purposes such as severance of title and nature of possession, but not for the primary purpose of dividing joint properties by metes and bounds. The Supreme Court concluded that Exhibits B21 and B22 could be used for collateral purposes if the appellants paid the required stamp duty and penalty to get the documents impounded.

Conclusion:

The Supreme Court partly allowed the appeal, holding that Exhibits B21 and B22 are admissible in evidence for collateral purposes, subject to the payment of stamp duty, penalty, proof, and relevance. The Trial Court was given the liberty to mark these exhibits for collateral purposes once the conditions were met.