The Registration Act, 1908:

Critical Analysis of the 1908

Act

Authored by: Shivam Goel, B.Com (H), LL.B. (Delhi University), LL.M. (NUJS);
Author of: Corporate Manslaughter and Corporate Homicide: Scope for a New
Legislation in India, Penguin-Partridge, Bloomington, 2015; and Concept of Rights in
Islam, Lambert Publication, Germany, 2014.
Associate, S.G. & Co. (New Delhi); advocate.shivamgoel@gmail.com

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The Registration Act, 1908: Critical Analysis of the 1908 Act

Introduction:

Registration is deemed to prevent fraud. The object of registering a document is to give

notice to the world that such a document has been executed. Registration of a document does
not confer the title over the property as mentioned in the document registered, but provides an
evidence of such transactions being registered, based on which title over the property could
be established. For registration of documents relating to conveyance of properties belonging
to Government, local bodies or religious institutions, “No Objection Certificate” is required
from the relevant authorities concerned.

Test of Compulsory Registration:

The test for compulsory registration of a document is the intention of parties as expressed in
the document concerned. What is material for the purpose of compulsory registration of a
document under Section 17(1) of the Registration Act, 1908 is that:

 The document (non-testamentary instrument1) must create, assign, declare, extinguish

or limit,
 whether in present or in future,
 any right, title or interest, whether vested or contingent,
 of the value of Rs. 100 and upwards, to or in
 Immovable Property.

Note:

1. Registration of Will is optional. A Will is made to interfere in the line of succession.

2. According to Section 17(1) (a) of the Registration Act, 1908, instrument of gift of
immovable property requires compulsory registration, whatever may be the value of
the gift or the immovable property gifted. Section 123 of the Transfer of Property Act,
1882 requires that gift of immovable property must be registered.
3. Gift is a transfer of certain movable or immovable property voluntarily made and
without consideration by a person called as the donor to a person called as the donee,
and which is accepted by or on behalf of the donee; such acceptance must be given

1
A non-testamentary instrument is a document which is intended to operate immediately and is in nature final
and irrevocable. Where a document does not purport to convey anything in the presenti, it is a Will.

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 within the lifetime of the donor and if the donee dies before acceptance, then the gift
is void.
4. A document or instrument of gift of immovable property requires compulsory
registration and it operates from the date of the execution of the gift deed.
5. Section 122 and Section 123 of the Transfer of Property Act, 1882 read with Section
47 of the Registration Act, 1908 provides that, the gift becomes enforceable from the
date of the signing of the gift deed; it is also pertinent to mention here that mere
registration of the gift deed would not by itself be an evidence of gift having been
made, as the ingredients set forth under Section 122 of the Transfer of Property Act,
1882 are required to be fulfilled.
6. According to Section 129 of the Transfer of Property Act, 1882, a gift of moveable
property in contemplation of death shall not be deemed to have affected any of the
rules under the Muhammadan law. Hence, the law with respect to gift(s) and its
validity have to be understood solely with regards to the Muslim law. Thus, Section
129 of the Transfer of Property Act, 1882 excludes the applicability of Section 123 of
the Transfer of Property Act, 1882 on gift(s) been made by the Muslims. A gift under
the Muslim law is called “Hiba”.
7. In the case of, Hafeeza Bibi & Ors. v. Shaikh Farid, (2011) 5 SCC 654, the Supreme
Court of India held that, the position in regards to gift(s) under Muslim law is well
settled and the same has been stated and restated time and again, that is, there are
three (3) essentials of a gift under the Muhammadan law, these are: (1) Declaration of
the gift by the donor; (2) Acceptance of the gift by the donee; and (3) Delivery of
possession. Though rules of Muhammadan law do not make writing essential to the
validity of a gift, an oral gift fulfilling all the three (3) essentials makes the gift
complete and irrevocable. However, the donor may record the transaction of gift in
writing.
8. If a Muslim gifts an immovable property to a Hindu by way of a written document,
does it require registration? No.

It is the document and not the transaction that is required to be registered. Similarly a
document which does not create interest in any immovable property is not required to be
registered. A document in question if it is not an operative document, and it does not contain
all the essentials of the transaction, then it does not require registration. Non-registration of

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documents as required to be registered makes them unacceptable to be read into evidence of
any transaction affecting such property or conferring such power.

The registration work is carried out by the Sub-Registrars in their sub-areas according to their
jurisdictional or territorial sub-divisions in each district under the control of the Registrar
posted for the aforesaid purpose at the district headquarters. If the Sub-Registrar refuses the
registration or lingers it for no cogent reason or the person affected otherwise feels aggrieved
from the treatment of the meted out to him at the office of the Sub-Registrar, then he may
make a complaint thereof to the Registrar of the district for redressal of his grievance.

Important Terms:

Doctrine of Res Nullius: This doctrine states that, no property can be without an owner at
any point of time.

Moveable Property: According to Section 2(9) of the Registration Act, 1908, moveable
property includes standing timber, growing crops and grass, fruit upon and juice in trees, and
property of every other description, except immovable property.

Immovable Property: The term immovable property includes: land; benefits arising out of
land; and things attached to the earth, or permanently fastened to anything attached to the
earth (See: Section 3(26) of the General Clauses Act, 1897). For the purposes of the Transfer
of Property Act, 1882, immovable property does not include: standing timber, growing crops
and grass.

Document: The term document has not been defined under the Registration Act, 1908, but, it
has been defined under Section 3(16) of the General Clauses Act, 1897 as follows:
“document” shall include any matter written, expressed or described upon any substance by
means of letters, figures or marks or by more than one of these means, which is intended to
be used or which may be used, for the purpose of recording that matter.

According to Section 3 of the Indian Evidence Act, 1872, a document shall mean any matter
expressed or prescribed upon any substance by means of letters or marks intended to be used
for the purpose of recording that matter. Section 29 of the Indian Penal Code, 1860 provides a
similar definition of the term ‘document’.

Instrument: The term ‘instrument’ has not been defined under the Registration Act, 1908;
however, the same has been defined under Section 2(14) of the Indian Stamp Act, 1899 to

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include every document by virtue of which any right or liability is, or, purports to be, created,
transferred, extended, extinguished or recorded.

Important Case-Laws:

1. Suraj Lamps & Industries Pvt. Ltd. v. State of Haryana, AIR 2012 SC 206: It was
held as follows:
a. That an immovable property can be legally and lawfully transferred/ conveyed
only by a registered deed of conveyance.
b. Transactions in the nature of ‘General Power of Attorney Sales’ or ‘Sale by
Agreement to Sell’ or ‘Transfer by Will’ are incapable of conveying title and do
not amount to transfer, nor can they be recognised as valid mode of transfer of
immovable property. The Courts are not to treat such transactions as completed or
concluded transfers or conveyances as they neither convey title nor create any
interest in an immovable property. They cannot be recognised as deeds conferring
title except to the limited extent of Section 53-A of the Transfer of Property Act,
1882. Such transactions cannot be relied upon or made the basis for mutations in
Municipal or Revenue Records.
c. This rule applies not only to the deeds of conveyance in regards to freehold
property but also to transfer of leasehold property. A lease can be validly
transferred only vide a registered “Assignment of Lease”.
d. An ‘Agreement to Sell/General Power of Attorney/ Will’ transaction neither
conveys any title nor creates any interest in an immovable property.
e. Court Held: Observations made by the High Court of Delhi in the case of, Asha
M. Jain v. Canara Bank, 94 (2001) DLT 841, that the concept of ‘Power of
Attorney Sales’ has become, over a period of time, a recognised mode of transfer
apropos transactions concluded by way of Agreement to Sell or General Power of
Attorney or Will, are unwarranted, unjustified and misleading.
2. Hansia v. Bakhtawarmal, AIR 1958 Raj 102: The question of law that arose for
adjudication in this case was this- how far a non-registered document, which is
compulsorily required to be registered under Section 17 of the Registration Act, 1908,
can be used in a proceeding. The document in question in the present case was a
mortgage deed which was not registered, although registration of such documents is
obligatory under Section 17(1) of the Registration Act, 1908. In this case, it was held
that, a suit for redemption based on an un-registered mortgage deed is bound to fall,

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 much because the purpose of the mortgage deed is to prove the mortgage. The un-
registered mortgage deed can be used only for collateral purposes as provided for in
the proviso to Section 49 of the Registration Act, 1908. The necessary conclusion is
this, that, the un-registered mortgage deed can be used by the plaintiff in a suit for
possession (and not in a suit for redemption) to prove the “nature of possession”, if
the defendant denies the claim of the plaintiff on the ground of adverse possession.
Thus, proviso to Section 49 of the Registration Act, 1908 cannot be relied upon for
availing any benefit in a suit for redemption. Collateral purpose connotes a purpose
other than that for creating, assigning, declaring, extinguishing or limiting a right to
an immovable property; documents requiring compulsory registration under the
Registration Act, 1908, can be used for collateral purpose.
Note: The property mortgaged is only a security for the payment of the money lent.
The mortgagor is entitled to get back his property on payment of the principal and
interest after the expiry of the due date for the repayment of the mortgagee's money.
This right of the mortgagor is called the Right of Redemption.
Note: The term “collateral transaction” is used not in the sense of an ancillary
transaction to a principal transaction or a subsidiary transaction to a main transaction.
The root meaning of the word “collateral” is running together or running on parallel
lines. The transaction as recorded would be a particular or specific transaction. But it
would be possible to read in that transaction what may be called the purpose of the
transaction and what may be called a collateral purpose, the fulfilment of that
collateral purpose would bring into existence a collateral transaction, a transaction
which may be said to be a part and parcel of the transaction but none the less a
transaction which runs together with or on parallel lines with the same.
3. Tek Bahadur Bhujil v. Debi Singh Bhujil, AIR 1966 SC 292: In this case, it was
held that, where a family arrangement was brought about by a document in writing
with the purpose of using that writing as a proof of what the family had arranged for,
then such a document would require compulsory registration because it is then that
such a document would amount to a document of title declaring for future, what
rights/claims and what properties the parties i.e. each member of the family would
possess or enjoy.
4. Ghulam Ahmad v. Ghulam Qadir, AIR 1968 J. & K. 35: In this case, it was held
that, when the agreement is purely mutual and a family one for the enjoyment of
property without limiting or extinguishing the right of anybody, then it may not be

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registered. It was held that, after examining, whether or not, a document is
compulsorily registrable under Section 17 of the Registration Act, 1908, comes the
stage of examining the document and seeing whether it could be admitted to
registration in view of Section 21 of the 1908 Act, once is it found that the document
is to be compulsorily registered. Thus, the test is, if the document is hit by any of the
provisions of Section 17 of the 1908 Act, the application or non-application of Section
21 of the 1908 Act does not at all arise for consideration, because it is the second-step
in the chain of steps which completes the registration formality.
A document which comes within the terms of Section 17(1) (b) of the 1908 Act is
compulsorily registrable; whatever is saved from the operation of this clause
(that is, clause (b) of sub-section (1) of Section 17 of the 1908 Act) of the Section
is not compulsorily registrable.
Document is any substance having any matter expressed or described upon it by
marks capable of being read. As per the law for time being in force in India, it is the
matter written and not the substance on which the matter is expressed or described
which is said to be a document.
Meaning of the words- creating, declaring, limiting and extinguishing:
 The word “create” in legal terminology means to bring into being, to invest
with a new title, or to produce. Therefore, every non-testamentary instrument
which means to, or has the effect of originating some right, title or interest in
immovable property will be governed by the word “create”.
 The word “declare” is equivalent to “define” or “authoritatively set forth”; a
mere recital of fact does not tantamount to a declaration.
 The word “limit” connotes restriction of some right or interest in immovable
property.
 The word “extinguish” is a counter-part of the word “create”, for it means “to
bring to an end” or to “quench” some right, title or interest in immovable
property.

A non-testamentary instrument which varies the right or interest made by an earlier

instrument, has as much the effect of creating some new right or extinguishing an old
one as an absolutely fresh document would do- such a document also requires
registration.

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 A compromise is a settlement of disputed claim and applies to demands of all sorts.
Where it merely contains a recital of a previous agreement, it does not require
registration, but where the compromise itself declares a right to immovable property
then it operates as a contract and requires registration.

5. Ram Sewak Jaiswal v. Abdul Majeed, AIR 1980 All. 262: In this case it was held as
follows:
i. In case of an agricultural lease, a registered kabuliyat coupled with acceptance
of the same by the landlord is sufficient to constitute a lease in the eyes of law.
ii. A rent-note or kabuliyat is executed unilaterally by the lessee alone, by which,
the lessee agrees to take some immovable property on lease from the lessor. A
rent-note or kabuliyat comes within the definition of the term ‘lease’ for the
purposes of Section 2(7) of the Registration Act, 1908, though it cannot be
termed as ‘lease’ sensu stricto for the purposes of Section 107 of the Transfer
of Property Act, 1882, however, it shall require compulsory registration if it is
executed for a period stated in Section 17(1) (d) of the Registration Act, 1908.
iii. A rent-note or kabuliyat is inadmissible in evidence if it is not registered,
though it requires compulsory registration under Section 17(1) of the
Registration Act, 1908.
iv. Note: The period for which the house was taken according to the terms of the
rent-note was for 11 months and the rent reserved was Rs. 5/- per month, it
was held that, no compulsory registration was required as regards Section
17(1) (d) of the Registration Act, 1908, although the above arrangement shall
constitute a lease within the mischief of Section 2(7) of the Registration Act,
1908. Thus, no registration was required, neither within the mandate of
Section 17 of the Registration Act, 1908, nor within the mandate of any of the
provisions of the Transfer of Property Act, 1882, as the lease was for a period
which was less than one-year.
(Note: Section 2(7) of the Registration Act, 1908: “lease” includes a
counterpart, Kabuliyat, as undertaking to cultivate or occupy, and an
agreement to lease)
6. Naran Das Karsan Das v. S.A. Kamtam, AIR 1977 SC 774:
a. Section 59 of the Transfer of Property Act, 1882 provides that where the principal
money secured is Rs. 100/- or upwards, a mortgage other than a mortgage by

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 deposit of title-deeds can be effected only by a registered instrument signed by the
mortgagor (that is, the person who mortgages the property) and attested by at least
two witnesses.
(Note: Section 59 of the Transfer of Property Act, 1882: Mortgage when to be by
assurance)
b. A mortgage by deposit of title-deeds may be created without any writing and
merely by delivery of title-deeds with the intention of creating a security for a
debt; no question of registration arises in such a transaction.
c. In case of a simple mortgage there must be a registered document. A document
would require registration if independently of the provisions of Section 58(f) of
the Transfer of Property Act, 1882, it creates a mortgage.
(Note: Section 58(f) of the Transfer of Property Act, 1882: Mortgage by deposit of
title-deeds)
d. A document specifying that in case the mortgagor fails to repay the loan amount
within the stipulated period, then the mortgagor would be entitled to sell the
mortgaged property for recovering the loan amount, would be compulsorily
registrable, as the title in the property was created in favour of the mortgagee by
virtue of the said document. Mortgagor has a right to redeem until the sale of the
mortgaged property is complete. By registration the mortgagor does not lose right
of redemption.
e. Conferment of power to sell the mortgaged property by the mortgagee without
intervention of the court in a mortgage-deed by itself will not deprive the
mortgagor of his right to redemption. The equity of redemption is not
extinguished by mere contract for sale by the mortgagee of the mortgaged
property; the mortgagor’s right to redeem will survive until there has been
completion of sale by the mortgagee by a registered deed.
7. Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra, AIR 2004 SC 4342:
It was held that the essential conditions which are required to be fulfilled if a
transferee (the one to whom the property has been transferred by the transferor) wants
to defend or protect his possession under Section 53-A of the Transfer of Property
Act, 1882, are as follows:
I. There must be a contract for transfer of any immovable property for
consideration;

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 II. The contract must be writing, signed by the transferor, or by someone on his
behalf;
III. The writing must be in such words from which the terms necessary to construe
the transfer can be ascertained;
IV. The transferee must in part-performance of the contract take possession of the
property, or any part thereof;
V. The transferee must have done some act in furtherance of the contract; and,
VI. The transferee must have performed or be willing to perform his part of the
contract.

If these conditions are fulfilled then in a given case there is equity in favour of the
proposed transferee who can protect his possession against the proposed transferor
even though a registered-deed conveying the title is not executed by the proposed
transferor. In such a situation, equitable doctrine of part-performance provided under
Section 53-A of the Transfer of Property Act, 1882 comes into play.

Protection provided under Section 53-A of the Transfer of Property Act, 1882 to the
proposed transferee is a shield only against the transferor. It disentitles the transferor
from disturbing the possession of the proposed transferee who is put in possession in
pursuance of the contract in writing between the transferor and the transferee. It has
nothing to do with the ownership of the proposed transferor who remains the
absolute owner of the property until it is legally conveyed by executing a
registered sale-deed in favour of the transferee.

Such a right to protect possession by the proposed transferee against the proposed
vendor (or proposed transferor) cannot be pressed into service if the proposed vendor
(or proposed transferor) is not the title-holder of the immovable property in question
and is just a third-party.

As per Section 54 of the Transfer of Property Act, 1882, the title in an immovable
property valued at more than Rs. 100/- can be conveyed only by executing a
registered sale deed.

8. State of Rajasthan v. Basant Nahata, (2005) 12 SCC 77: In this case it was held as
follows:

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 i. A grant of power of attorney is essentially governed by Chapter X of the
Contract Act, 1872;
ii. A power of attorney is not an instrument of transfer in regard to any right, title
or interest in an immovable property;
iii. A power of attorney is creation of an agency where by the grantor authorises
the grantee to do the acts specified therein, on behalf of grantor, which when
executed will be binding on the grantor as if done by him (See: Section 1-A
and Section 2 of the Powers of Attorney Act, 1882);
iv. A power of attorney is revocable or terminable at anytime unless it is made
irrevocable in a manner known to law;
v. Even an irrevocable power of attorney does not have the effect of transferring
title to the grantee;
vi. A power of attorney is nothing but a document of convenience;
vii. An attorney-holder may execute a deed of conveyance in exercise of the
power granted under the power of attorney and thereby convey title on behalf
of the grantor.
9. Bina Murlidhar Hemdev v. Kanhaiyalal Lokram Hemdev, AIR 1999 SC 2171:
In this case, it was held that, after a document is registered, the Sub-Registrar ceases
to have jurisdiction over the matter. It is only before the registration of the document
that, for reasons to be recorded, the Sub-Registrar can refuse to register the document
within the mandate of Section 71 of the Registration Act, 1908. However, such an
order of the Sub-Registrar, refusing the registration of the document in question can
be appealed before the Registrar under Section 72 of the Registration Act, 1908.
The question that arose for adjudication in this case was the following: Whether a
person admitting the execution of series of documents before the Sub-Registrar can
afterwards raise a question that his initials were there only on some of the pages and
not on all the pages?
It was held that, a person executing and admitting series of documents before the Sub-
Registrar cannot afterwards deny the existence of some of documents bearing his
signatures, while admitting the others.
10. K. Raghunandan & Ors v. Ali Hussain Sabir & Ors, AIR 2008 SC 2337:
Section 17(2) (vi) of the Registration Act, 1908 states that, nothing in clauses (b) and
(c) of Section 17(1) shall apply to: “any decree or order of a court except a decree or

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 order expressed to be made on a compromise and comprising immovable property
other than that which is the subject-matter of the suit or proceeding”.
Thus, the exception contained in Section 17(2) (vi) of the Registration Act, 1908
states that, if a suit is filed by the plaintiff in respect of immovable property ‘X’, then,
a decree in that suit in respect of immovable property ‘Y’ (which was not the subject
matter of the suit at all) will require registration.
It was held that, if a right is created or extinguished by virtue of a compromise decree,
then such a decree would require compulsory registration, however, Section 17(2) (vi)
of the Registration Act, 1908 stands as an exception to this.
The legal position as regards Section 17(2) (vi) of the Registration Act, 1908 can be
summarised as follows:
a. A compromise decree, if bona fide, in the sense that the compromise is not a
device to obviate payment of stamp duty and/or frustrate the law relating to
registration, then, it would not require compulsory registration;
b. If the compromise decree was to create for the first time, any right, title or interest
in an immovable property of value of Rs. 100/- or upwards in favour of any party
to the suit, then such a decree or order of the court would require compulsory
registration;
c. If the decree or the order of the court does not attract any of the clauses as regards
Section 17(1) of the Registration Act, 1908, then such decree or order of the court
would not require compulsory registration;
d. If decree of a court does not embody the terms of the compromise, then, the
benefit from the terms of the compromise cannot be derived, even if, a suit were
to be disposed of because of the compromise in question. Thus, where a suit is
disposed of stating, “Suit compromised and accordingly dismissed”, it could not
be said to have embodied the terms of the compromise. However, where the suit is
disposed of stating, “Suit decreed in terms of the compromise” or “Suit dismissed
in terms of the compromise”, it can be said that the terms of the compromise are
embodied in the decree of the court.
e. A decree or order of the court including a decree or order expressed to be made on
a compromise which declares the pre-existing right and does not by itself create
any new right, title or interest in praesenti in immovable property of value of Rs.
100/- or upwards, does not require registration.
11. Bhoop Singh v. Ram Singh Major, AIR 1996 SC 196:

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 It was held that, if a decree is passed regarding some immovable property which is not
the subject matter of the suit, then, it (that is, the decree) will require compulsory
registration. That is, if a suit is filed in respect of property ‘A’, but, the decree is in
respect of immovable property ‘B’, then the decree so far as it relates to immovable
property ‘B’, will require compulsory registration; this is the plain meaning of Section
17(2) (vi) of the Registration Act, 1908.
12. S.M.S. Tea Estates Pvt. Ltd. v. Chandmari Tea Co. Pvt. Ltd., 2011 All SCR 1722:
2011 AIR SCW 4484:
It was held that, insufficiently stamped documents and unregistered documents, which
are required under law to be compulsorily registered, are not admissible in evidence.
The Supreme Court of India directed all the Courts across the country to adopt the
following procedure where an arbitration clause is contained in a document which is
not registered (but requires to be compulsorily registered) and which is not duly
stamped:
i. The court should, before admitting any document into evidence or acting upon
such document, examine whether the instrument/document is duly stamped
and whether it is an instrument which requires compulsory registration.
ii. If the document is found to be not duly stamped, then, Section 35 of the Stamp
Act, 1899 bars the said document from being acted upon, and consequently
even the arbitration clause therein cannot be acted upon. The court should then
proceed to impound the document under Section 33 of the 1899 Act and
follow the procedure under Sections 35 and 38 of the 1899 Act respectively.
iii. If the document is found to be duly stamped, or if the deficit stamp duty and
penalty is paid, either before the court or before the collector (as contemplated
under Section 35 and Section 40 of the Stamp Act, 1899) and the defect with
reference to deficit stamp duty is cured, then, the court may treat the document
as duly stamped.
iv. Once the document is found to be duly stamped, the court shall proceed to
consider whether the document is compulsorily registrable. If the document is
found to be compulsorily registrable, and is in fact a registered document,
then, the court can act upon the arbitration agreement, without any
impediment.
v. If the document is not registered, but is compulsorily registrable, then, having
regard to Section 16(1) (a) of the Arbitration and Conciliation Act, 1996, the

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 court can de-link the arbitration agreement from the main document, as an
agreement independent of the other terms of the document, even if the main
document itself cannot in anyway affect the property and cannot be received
as evidence of any transaction affecting such property. The only exception is
where the respondent in the application demonstrates that the arbitration
agreement is also void and unenforceable, thus, if the respondent raises any
objection that the arbitration agreement was invalid, the court will consider the
said objection before proceeding to appoint an arbitrator.
vi. Where the document is compulsorily registrable, but is not registered,
however, the arbitration clause (or arbitration agreement) is valid and
separable, what is required to be borne in mind is that the arbitrator appointed
in such a matter cannot rely upon the unregistered instrument except for two
purposes, that is: (a) as evidence of contract in a claim for specific
performance, and (b) as evidence of any collateral transaction which does not
require registration.
13. K.B. Saha & Sons Pvt. Ltd. v. Development Consultant Ltd., (2008) 8 SCC 564: It
was held that, there are certain exceptions to the general rule that insufficiently
stamped documents and unregistered documents are not admissible in evidence. The
court summarising the law as regards necessity of affixation of appropriate stamp duty
and compulsory registration of documents held as under:
i. A document required by law to be registered, if unregistered, is not admissible
into evidence by virtue of Section 49 of the Registration Act, 1908;
ii. Such unregistered document can however be used as an evidence for collateral
purpose (for instance, in case of a lease-deed, the term ‘collateral purpose’
would mean proving the nature and character of the possession and the
purpose of leasing out) as provided for in the Proviso to Section 49 of the
Registration Act, 1908;
iii. A collateral transaction must be independent of, or must be divisible from, the
transaction as regards which registration is compulsorily required under law;
iv. A collateral transaction must not be a transaction which: creates, declares,
assigns, limits or extinguishes any right, title or interest in an immovable
property of Rs. 100/- and upwards.
v. If a document is inadmissible in evidence for want of registration, then, none
of its terms can be admitted in evidence and that to use a document for the

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 purpose of proving an important clause would not be using it as a collateral
purpose;
vi. The Indian Stamp Act, 1899 is a fiscal legislation the primary object of which
is to collect revenue for the State and to prevent its evasion. Any ambiguity or
doubt in any of the provisions of the 1899 Act has to be resolved in favour of
the citizen. An objection with respect to the admissibility of a document on
account of insufficiency of stamps or improper cancellation of stamps (See:
Section 12 of the Indian Stamp Act, 1899) cannot be entertained after the
evidence has been adduced and the document has been exhibited on record; in
such cases where a document has been admitted and placed on record as an
exhibit the same cannot be controverted either by trial court or the appellate
court or in revision. However, a mere marking of a document as an exhibit on
record does not dispense with the proof thereof.
Note: If a mortgage-deed is not registered, the mortgagor cannot use it to
prove his right of redemption for that is not a collateral purpose.
14. S. Kaladevi v. V.R. Somasundaram, AIR 2010 SC 1654: It was held that, Proviso to
Section 49 of the Registration Act, 1908 would show that an unregistered document
affecting an immovable property required to be registered may be received as an
evidence to the contract in a suit for specific performance or as an evidence of any
collateral transaction not required to be effected by registered instrument. Therefore,
the court opined that, by virtue of Proviso to Section 49 of the Registration Act, 1908
an unregistered sale-deed can be admitted in evidence of a contract in a suit for
specific performance of the contract. When an unregistered sale-deed is tendered
in evidence not as evidence of a completed sale but as proof of an oral agreement
of sale, the deed can be received in evidence making an endorsement that it was
received only as evidence of an oral agreement of sale under Proviso to Section
49 of the Registration Act, 1908.
15. Bajaj Auto Ltd. v. Behari Lal Kohli, AIR 1989 SC 1806: It was held that, if a
document is inadmissible in evidence for want of registration then all the
terms/stipulations/clauses albeit the unregistered document in question are
inadmissible in evidence including the one dealing with landlord’s permission to his
tenant to sub-let. If a lease-deed is inadmissible in evidence for the want of
registration then to use such an unregistered lease-deed to prove an important clause

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 as regards such a lease-deed is not using such an unregistered lease-deed for collateral
purposes.
16. State of U.P. v. District Judge & Ors, (1997) 1 SCC 496: It was held that, as per
Section 54 of the Transfer of Property Act, 1882, an immovable property of the value
of Rs. 100 and upwards can be conveyed/transferred only by way of a registered sale-
deed. Further, Section 53-A of the Transfer of Property Act, 1882 provides a shield of
protection to the proposed transferee, enabling him to remain in possession of the
property in question, as against the original owner who has agreed to sell that property
to the proposed transferee; this protection is available to the proposed transferee
provided that the proposed transferee satisfies all other conditions as provided for by
Section 53-A of the Transfer of Property Act, 1882.
This protection under Section 53-A of the Transfer of Property Act, 1882, is available
only as a shield against the proposed transferor (that is, the proposed vendor) and it
would disentitle him (the proposed transferor) from disturbing the possession of the
proposed transferee who is put in possession of the immovable property pursuant to
an agreement entered into between the proposed transferor and the proposed
transferee; but, it has nothing to do with the ownership of the proposed transferor who
remains a full-owner of the property until it is legally conveyed by a registered sale-
deed to the proposed transferee.
17. Meghmala v. G. Narasimha Reddy & Ors, (2010) 8 SCC 383: It was held that, an
agreement to sell does not create any right, title or interest in favour of the intending
buyer. An agreement to sell does not fall within the mischief of Section 53-A of the
Transfer of Property Act, 1882 or Section 17(1A) of the Registration Act, 1908, and
hence, an agreement to sell does not require registration. An agreement to sell, at best,
falls under the mischief of Section 17(2) (v) of the Registration Act, 1908, as an
agreement to sell does not create, declare, assign, limit or extinguish, any right, title or
interest in any immovable property of the value of Rs. 100 and upwards, but rather it
creates a right in favour of the intending buyer of the immovable property to obtain
another document, that is, the registered sale-deed, in future. Thus, an agreement to
sell does not require registration under the mischief of the provisions of the
Registration Act, 1908.
18. M/s. Jiwan Industries (P) Ltd. v. Smt. Kamlesh Rani Budhiraja, 208 (2014) DLT
589: In this case, it was held that, an un-registered lease-deed can be looked into only
for collateral purposes; the term ‘collateral purposes’ cannot mean to include the

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 terms and conditions of tenancy, but rather it shall mean the use of an unregistered
lease-deed to show the nature of the possession, that is, to show that the tenant has not
illegally entered into the possession of the property, but is rather a legal-entrant.
19. Thiruvengada Pillai v. Navaneethammal & Anr, AIR 2008 SC 1541: In this case,
the Hon’ble Supreme Court of India held that, non-judicial stamp papers do not have
any expiry date for being used for a document such as an agreement to sell. In this
case, the Trial Court and the High Court doubted the genuineness of an agreement to
sell dated 05.01.1980, because it was written on two (2) stamp-papers purchased on
25.08.1973 and 07.08.1978 respectively. The counsel for the first respondent
submitted that, apart from the authenticity of the stamp-papers being doubtful, the use
of such old stamp-papers per se invalidated the agreement, as the stamp-papers used
in the agreement to sell were more than six (6) months old; thus, the counsel for the
first respondent stated that, the agreement prepared on such “expired” stamp-papers
was not a valid agreement.
The Supreme Court of India opined that, the Indian Stamp Act, 1899, nowhere
prescribes any expiry date for the use of a stamp-paper. Section 54 of the 1899 Act,
merely provides that, a person possessing a stamp-paper for which he has no
immediate use and which is neither soiled, nor rendered unfit for use, can seek refund
of the value of the stamp-paper by surrendering such a stamp-paper to the Collector,
provided that, such a stamp-paper was surrendered within the period of six (6) months
from the date of purchase of such stamp-paper to the Collector.
The stipulation of six (6) months period as provided for in Section 54 of the Stamp
Act, 1899, is only for the purpose of seeking refund of the value of the un-used stamp
paper and is not for putting to use a stamp paper. Section 54 of the 1899 Act does not
require the person who has purchased a stamp paper, to use it compulsorily
within a period of six (6) months from the date of its purchase. Therefore, there
isn’t any impediment to use a stamp paper, which is more than six (6) months old, for
any document including an agreement to sell.
20. Dinaji v. Daddi, AIR 1990 SC 1153: It was held that, an adoption deed, reciting only
about the factum of adoption does not require compulsory registration, however, if the
adoption deed, not only states about the factum of adoption but also states that,
pursuant to adoption, the adoptee shall acquire certain right, title or interest in an
immovable property of the value of Rs.100 and upwards, then such an adoption deed
would require compulsory registration.

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 In this case, ‘Z’, a widow, was an absolute owner of an immovable property ‘X’. She
adopted a son ‘AD’. The adoption deed was unregistered and contained a stipulation
as regards relinquishment of all rights of ‘Z’ in the immovable property ‘X’ in favour
of ‘AD’. The question that arose for consideration was that, whether or not, within the
mandate of Section 17(1) (b) of the Registration Act, 1908, the adoption deed
required compulsory registration so that it is admissible in evidence so far as Section
49 of the Registration Act, 1908 is concerned?
The court held that, in the present case, the adoption deed assigns an interest in favour
of the adopted son and extinguishes an interest in the widow, thus, clearly the
adoption deed is hit by Section 17(1) (b) of the Registration Act, 1908. Hence, the
adoption deed cannot be read/ admitted into evidence without being registered, in
view of Section 49 of the Registration Act, 1908.

Note: In the case of, Suraj Lamp & Industries (P) Ltd. v. State of Haryana, AIR 2012 SC
206 (hereinafter referred to as Suraj Lamp II), it was submitted before the three-judges bench
of the Hon’ble Supreme Court of India, that, the decision of the Supreme Court of India in
the case of, Suraj Lamp & Industries (P) Ltd. v. State of Haryana, AIR 2009 SC 3077,
(hereinafter referred to as Suraj Lamp I), holding that, ‘GPA Sales’ and transfers by way of
‘Agreement to Sell/General Power of Attorney/WILL’ are not legally valid/permissible
modes of transfers, and further that, the Suraj Lamp I decision of the Apex Court was likely
to create enormous hardship to a large number of persons who have entered into such
transactions and also that, they should be given sufficient time to regularize the transactions
by obtaining the deeds of conveyance. It was also submitted that the 2009 judgment in Suraj
Lamp I should be made applicable prospectively to avoid the ensuing hardship.
It was held by the Apex Court in Suraj Lamp II that, the Supreme Court vide its 2009
judgment in Suraj Lamp I, only reiterated the well-settled legal position, that, Agreement to
Sell/General Power of Attorney/WILL transactions are not ‘transfers’ or ‘sales’ and that such
transactions cannot be treated as completed transfers or conveyances; however, these can
continue to be treated as existing agreements of sale. Moreover, it was observed that, nothing
was, as such, preventing the affected parties from getting registered the deeds of conveyance
to complete their title. The said “Agreement to Sell/General Power of Attorney/WILL
transactions” may be used to obtain specific performance or to defend possession under the
aegis of Section 53-A of the Transfer of Property Act, 1882. Also, if these transactions are
entered into before the date of passing of the 2009 judgment in Suraj Lamp I, then, these

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instruments (Agreement to Sell/General Power of Attorney/ WILL) can be relied upon to
apply for regularization of the allotments/leases by the Development Authorities. The
Hon’ble Supreme Court of India vide its 2012 judgment in Suraj Lamp II, made it clear that,
if the documents relating to ‘Agreement to Sell/General Power of Attorney/WILL
transactions' have been accepted and acted upon by the Delhi Development Authority or by
other developmental authorities or by the municipal or revenue authorities to effect mutation,
then these do not require to be disturbed, merely on account of the decision of the court as
regards to the 2009 judgment in Suraj Lamp I.

Note: Difference between Judicial and Non-Judicial Stamp Papers: According to the
scheme of the Court Fees Act, 1870, every document filed in the court must be properly
stamped. The plaint must be stamped in accordance with the nature of the suit. The plaintiff
formulates his claim and the court-fee must be paid according to the category in which the
suit falls. Hence, the judicial stamp-papers which are in the nature of the court-fee stamps,
which are used for the payment of court-fee in accordance with the relief that the plaintiff
claims/seeks to claim vide his plaint.

Non-judicial stamp-papers are used for the payment of stamp duty. Stamp duty is in the
nature of a tax, much like, the sales-tax and the income-tax. A contract, agreement or deed
which is not adequately stamped is impermissible in evidence in a court of law. It is
important to note that, as per Section 4 of the Indian Stamp Act, 1899, where in the case of
any sale, mortgage or settlement, several instruments are employed for completing the
transaction (single), the principal instrument is chargeable with stamp duty as per Schedule I
of the 1899 Act and that the other instruments are chargeable each with a Re. 1/- as the stamp
duty.

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