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,
 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
 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
 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
 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
 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.
 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
 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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