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IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 20TH DAY OF MARCH 2014

BEFORE

THE HON’BLE MR.JUSTICE N KUMAR

WRIT PETITION NO.22528/2012 (GM-CPC)

BETWEEN:

RAJAPPA,
S/O MUNIVENKATAPPA,
AGED ABOUT 49 YEARS,
R/O CHOWDADENAHALLI VILLAGE,
VALLABI POST,
NARASAAPURA HOBLI,
KOLAR TALUK & DISTRICT.

…PETITIONER
(BY SRI: S.N. ASWATHANARAYANA, ADV.)

AND:

RAJAPPA,
S/O MUNISWAMAPPA,
AGED ABOUT 51 YEARS,
R/O CHOWDADENAHALLI VILLAGE,
VALLABI POST,
NARASAAPURA HOBLI,
KOLAR TALUK & DISTRICT.
…RESPONDENT
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(BY SRI: T.E.SRINIVASA, ADV. FOR

B.N. MURALIDHAR, ADV.)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226

AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
SET ASIDE THE ORDER PASSED ON 07/02/2012 BY THE
II ADDL. CIVIL JUDGE AT KOLAR IN OS.NO.328/2007 VIDE
ANNEXURE-D ALLOWING EX.D.10 TO BE MARKED
WITHOUT IMPOSING STAMP DUTY AND PENALTY AND
ETC.
THIS PETITION COMING ON FOR PRELIMINARY
HEARING IN “B” GROUP THIS DAY, THE COURT MADE THE
FOLLOWING:

ORDER

The plaintiff has preferred this writ petition

challenging the order of the Trial Court admitting an

insufficiently stamped document holding that it can be

looked into for collateral purpose i.e., for the purpose of

contract.

2. The plaintiff has filed a suit against the

defendant for recovery of possession claiming that he is the

absolute owner of the property in dispute.

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3. The defendant filed the written statement

contending that the property belonged to one Chikka

Venkatesha Bovi who sold the northern half portion to one

Somanna and he has purchased the same from Somanna

under a registered sale deed 14.06.2006. In the southern

half portion there is a stone roofed house measuring 12x24

ft. and Somanna was residing in the said house.

Subsequently, the said Somanna agreeing to sell the said

house in his favour, put him in possession thereof. After

Somanna’s death, his son Manjunatha and the wife of

Chikka Venkatesha Bovi, have also agreed to sell the said

property in his favour and he is in actual possession and

enjoyment of the same under an agreement of sale.

4. To substantiate his case, the defendant during

the course of evidence, has produced an agreement of sale.

Marking of the same as an exhibit in evidence was objected

to by the plaintiff on the ground that stamp duty ought to

have been paid on it as if it were a conveyance in view of

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Article 5(i) (e) of the Karnataka Stamp Act as the defendant

claims that the possession is delivered in his favour under

the said agreement of sale.

5. The trial court has negatived the plaintiff’s

contention holding that an insufficiently stamped document

can be looked into for collateral purpose i.e., for the purpose

of contract and proceeded to mark the same as Ex.D10.

Aggrieved by the said order, the present writ petition is filed.

6. I heard the learned counsel for the parties.

7. There appears to be some confusion in the

minds of the trial Court as to the documents that could be

marked for collateral purpose.

8. Section 33 of the Karnataka Stamp Act, 1957,

mandates that when an unstamped or insufficiently

instrument is tendered in evidence before a Civil Court and if

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the marking of the same is objected to by the opposite party,

the court is duty bound to examine such instrument and

decide whether it is duly stamped or not. If the Court comes

to the conclusion that the instrument is not duly stamped,

then it has to impound such instrument. Section 34

mandates that a document which is not duly stamped shall

not be admitted in evidence. In other words, it shall not be

marked as exhibit in the case. However, the proviso to

Section 34 makes it clear, if the party tendering the

instrument in evidence pays the stamp duty or deficit stamp

duty and also ten times the duty payable as penalty or

deficient portion thereof, as the case may be, then the

instrument becomes admissible in evidence. Section 35 of

the Stamp Act makes it clear that if no objection is taken by

the opposite party at the time of marking the document

which is insufficiently stamped and it is admitted in

evidence, such admission shall not be called in question at

any stage of the same suit or other proceeding on the ground

that the instrument has not been duly stamped. The

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opposite party thus, loses a right to challenge the judicial act

of admitting such document in evidence.

9. Section 17 of the Registration Act, 1908 deals

with documents, the registration of which is compulsory and

it reads as under:

17. Documents of which registration is

compulsory-

(1) The following documents shall be registered, if

the property to which they relate is situate in a
district in which, and if they have been executed
on or after the date on which, Act No. XVI of
1864, or the Indian Registration Act, 1866, or the
Indian Registration Act, 1871, or the Indian
Registration Act, 1877, or this Act came or comes
into force, namely:-

(a) instruments of gift of immovable property;

(b) other non-testamentary instruments which

purport or operate to create, declare, assign, limit
or extinguish, whether in present or in future, any
right, title or interest, whether vested or
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contingent, of the value of one hundred rupees

and upwards, to or in immovable property;

(c) non-testamentary instruments which

acknowledge the receipt or payment of any
consideration on account of the creation,
declaration, assignment, limitation or extinction of
any such right, title or interest; and

(d) leases of immovable property from year to

year, or for any term exceeding one year, or
reserving a yearly rent;

(e) non-testamentary instruments transferring

or assigning any decree or order of a court or any
award when such decree or order or award
purports or operates to create, declare, assign,
limit or extinguish, whether in present or in
future, any right, title or interest, whether vested
or contingent, of the value of one hundred rupees
and upwards, to or in immovable property;

Provided that the State Government may, by

order published in the Official Gazette, exempt
from the operation of this sub-section any lease
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executed in any district, or part of a district, the

terms granted by which do not exceed five years
and the annual rent reserved by which do not
exceed fifty rupees.

(A) The documents containing contracts to

transfer for consideration, any immovable
property for the purpose of Section 53-A of the
Transfer of Property Act, 1982, shall be registered
if they have been executed on or after the
commencement of Registration and Other Related
Laws (Amendment) Act, 2001 and if such
documents are not registered on or after such
commencement, then, they shall have no effect for
the purposes of said Section 53A.

10. The effect of non-registration of documents

required to be registered is dealt under Section 49 of the

Registration Act, 1908, which is as under:

49. Effect of non-registration of documents

required to be registered
No document required by section 17 or by any
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provision of the Transfer of Property Act, 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 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.

11. A reading of the above provisions makes it clear

that a document which is compulsorily registerable under

Section 17 of the Registration Act, if not registered, shall not

affect the rights in the immovable property. In other words,

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it would not have the effect of transfer of any interest in an

immovable property. Clause (c) of Section 49 of the

Registration Act mandates that such a document shall not

be received as evidence of any transaction effecting the said

property or conferring of such power. Therefore, it is the

registration of the document which creates interest in an

immovable property in favour of the person to whom the

property is transferred. Unless duly registered, no title or

interest in the property is transferred in favour of the

purchaser under an instrument irrespective of it being duly

stamped and executed. Once the document is registered,

transfer takes place and it dates back to the date of making

the instrument, as per Section 47 of the Registration Act.

12. The proviso to Section 49 is in the nature of an

exception which provides for admissibility of a document

which is not duly registered. Two instances where a

document which is not registered could be looked into are

provided therein. They are,

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(a) Firstly, an unregistered document, namely a “sale deed”

could be received as evidence of a contract in a suit for

specific performance under Chapter II of the Specific Relief

Act, 1877. A sale deed is a compulsorily registerable

document. If a sale deed is duly executed and duly stamped,

but not registered, it would not affect the property which is

covered under the document. It does not create any interest

in favour of the purchaser because it is not registered. When

a sale deed is executed and not registered, that sale deed

could be used as an agreement of sale and a suit for specific

performance could be filed on the basis of the said sale deed

so that if a decree is passed the seller could be compelled to

execute the sale deed.

(b) Secondly, unregistered documents could be looked

into for any collateral transaction also. The collateral

purpose would be any purpose other than that of creating,

declaring, assigning, limiting or extinguishing a right to

immovable property. However, the collateral purpose has a

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limited scope and meaning. For example, an unregistered

lease deed could be looked into for ascertaining or showing

that the occupation of the premises is permissive and the

occupant is not a trespasser. An unregistered document

which is impeached as a forgery by the alleged executant

may be admitted in evidence to compare the handwriting of

the alleged executant with his admitted handwriting. It

could be admitted as evidence of an acknowledgement to

save limitation. Normally, an unregistered partition deed

produced before the court, cannot be looked into to find out

whether there is any partition as stipulated in the deed.

However, such a deed can still be looked into to find out as

to who is in possession of the property and that would be a

collateral purpose.

13. Therefore, marking of a document for the

purpose of collateral purposes necessarily means that it is a

document which is compulsorily registerable, but not

registered. This has nothing to do with the stamp duty or

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penalty payable under the provisions of the Stamp Act.

Unless a document is duly stamped or sufficient duty and

penalty as provided under law is paid thereon, it can never

be admitted in evidence. Of course, if the objection is not

taken at the time of marking and the Court were to mark the

same as an exhibit, then no objection to that effect can be

taken subsequently. The Courts have to bear this distinction

in mind.

14. In the instant case, the document which was

sought to be produced in evidence and marked is an

agreement of sale. An agreement of sale is not a compulsorily

registerable document under Section 17 of the Registration

Act. Therefore, the question of marking such a document for

collateral purpose would not arise. The learned Trial Judge,

by admitting an insufficiently stamped document in evidence

for collateral purpose has acted contrary to Sections 33 and

34 of the Karnataka Stamp Act. Therefore the impugned

order cannot be sustained.

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16. In the result I pass the following:

/.ORDER

(i) Writ Petition is allowed.

(ii) The impugned order of Marking of

Ex.D10 is hereby set aside. However it is

open to the defendant to pay duty and

penalty and then get the document marked.

Sd/-
JUDGE

JT/-