CRP/5388/2018 of PILLI SRINIVASA RAO (DIED) Vs AATHUKURI ANJANEYULU on 30 December 2022

ORDER:

This revision petition, under Article 227 of the Constitution of India, is preferred against the order, dated 23.07.2018, dismissing I.A.No.406 of 2017 in O.S.No.22 of 2013 on the file of the Court of X Additional District Judge, Gurazala, filed by the defendants 2 to 5/ petitioners 2 to 5 under Order XIII Rule 3 and Section 151 CPC to reject the unregistered agreement of sale, dated 15.01.2010, marked as exhibit A1 and endorsement, dated 13.05.2010, marked as exhibit A10 as they are inadmissible in evidence since they require stamp duty and penalty apart from registration.

2. Heard Sri P. Rajesh Babu, learned counsel appearing for the revision petitioners. In spite of service of notice, there is no representation for the respondent/plaintiff.

3. The facts, in brief, are that the respondent/plaintiff filed the suit for recovery of an amount of Rs.15,12,000/- with subsequent interest @ 24% per annum thereon from the date of the suit till the date of realization on the ground that 1[st] and 2[nd] defendants having received advance sale consideration of Rs.3,05,000/- executed possessory agreement of sale, dated 15.01.2010, in favour of the plaintiff for the suit schedule property and subsequently received Rs.7,00,000/- and Rs.1,00,000/- from the plaintiff on 27.01.2010

and 28.01.2010 respectively vide endorsements made on the back side of the said agreement of sale and further received from the plaintiff Rs.1,00,000/- by the 1[st] defendant on 07.02.2011 towards part sale consideration. The plaintiff further contended that the suit schedule property is a government poramboke land and therefore, they agreed before the elders and they would refund Rs.12 lakhs, but failed to pay the same.

4. To support the case of the plaintiff, the evidence of the plaintiff in chief examination was filed by way of affidavit and the said agreement of sale was marked as exhibit A1. According to the defendants, when the plaintiff filed the agreement of sale in evidence and the same was marked, the defendants were not present and their advocate was also not present. The defendants further contended that the agreement of sale requires registration as per Section 17 of the Registration Act, 1908, and as it is also deficitely stamped, they filed I.A.No.406 of 2017 to demark and reject the unregistered agreement of sale, dated 15.01.2010, marked as exhibit A1.

5. The plaintiff filed counter denying the contention of the defendants and further stating that the agreement and endorsements were judiciously scrutinized during the evidence of PW1 in open Court and the same was marked in the presence of the counsel for the defendants, and therefore, the document once marked cannot be demarked, since no objection was raised.

6. After hearing both parties, and having dealt with the case law cited by both sides, the trial Court dismissed the petition observing that the document was marked through PW1 on 08.04.2013 whereas till this revision was filed on 20.10.2017, the defendants failed to raise any objections and at a belated stage, filed this petition and further, that the petitioners are seeking to demark only exhibits A1 and A10 whereas there are three other endorsements marked as exhibits A7 to A9 which relate to part-payments, but they were not sought to be demarked and further held that exhibit A1 is an instrument chargeable with duty, but since admitted in evidence, the same cannot be called in question at this stage and can be decided at the stage of disposal, since it is a case of 2013.

7. Having been aggrieved by such finding, the defendants/ petitioners preferred this revision stating that the trial Court completely ignored the provision of Section 47A (sic.49) of the Indian Registration Act, 1908 and further that the unregistered agreement of sale cannot be marked though the suit for specific performance of an agreement of sale is maintainable. It is also contended that the proposition that the document once marked cannot be demarked cannot be applied to an unregistered agreement of sale.

8. During the course of arguments, learned counsel for the revision petitioners/defendants submitted that the document tendered for being marked for collateral purpose should be duly stamped or stamp duty and penalty, if any payable, shall be paid before according permission for being marked for collateral purpose. Unless the document is sufficiently stamped or stamp duty and penalty are paid, an unregistered document cannot be admitted even for collateral purpose. He would further submit that the agreement of sale in question requires stamp duty at the rate of 5% adjustable as per G.O.Ms.No.581, dated 30.11.2013, and therefore, unless the said amount of stamp duty and penalty are paid, the document cannot be looked into even for collateral purpose.

9. On the other hand, learned counsel for the respondent/ plaintiff submitted that the agreement of sale is duly stamped, and therefore, it cannot be further subjected to collection of additional stamp duty or penalty. He further submitted that unregistered agreement of sale can be used in a suit for specific performance based on agreement of sale or for collateral purpose as per the proviso to Section 49 of the Registration Act, 1908, though it requires registration as per Section 17 of the Registration Act. He further submitted that since agreement of sale is already stamped enough, no further payment of stamp duty or penalty is required.

10. To receive a document in evidence, an objection can be raised on the ground of want of registration or stamp duty, as required under law. The objections in relation to non-registration or payment of stamp duty are relatable to separate enactments. Insofar as the present document is concerned, since the agreement of sale is one such document which requires registration under Section 17 of the Registration Act, it is contended by the defendants that the same cannot be received in evidence. However, though Section 49 of the Registration Act states that a document which requires registration, if not registered, the same cannot be received in evidence, further provided an exception to the said principle.

11. In this backdrop, it is necessary to refer to Section 49 of the Indian Registration Act, 1908, which reads as follows:-

49. Effect of non-registration of documents required to be registered.—No document required by section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 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 (4 of 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 (3 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument.

12. A plain reading of the above proviso shows that an unregistered document affecting immovable property and required by the Act to be registered may be received as evidence of any collateral transaction not required to be effected by a registered instrument. Therefore, the proviso to Section 49 permits receiving in evidence an unregistered agreement of sale in a suit for specific performance under chapter II of the Specific Relief Act. Further, it allows such unregistered document to be received in evidence for collateral purpose, i.e., a purpose which is not the main purpose for which such document is executed.

13. Now it is apt to refer to Section 17 of the Registration Act, 1908, which reads as under:

Documents of which registration is compulsory.—(l) 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) xx xx (b) xx xx (c) xx xx (d) xx xx (e) xx xx (f) xx xx (g) xx xx (1A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of Section 53A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the 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 the said Section 53A.”

Thus, Section 17 (1A) of the Registration Act mandates that any agreement of sale of an immovable property must be registered and though Section 49 of the Registration Act imposes a bar on the admissibility of the unregistered documents that are required to be registered under Section 17 of the Registration Act, provided an exception to receive such agreement as evidence of a contract in a suit for specific performance under chapter II of the Specific Relief Act.

14. Reverting to the facts of the case, it is to be first noted that the subject document is an unregistered agreement of sale and it is being sought to be relied upon for the purpose of proving the contract comprised therein, for recovery of the amount paid for the performance of the contract. Section 22 of the Specific Relief Act permits the relief of refund of any earnest money or deposit paid or made by him, in case his claim for specific performance is refused. Section 22 falls under Chapter-II of the said Act. Thus, the exception covers receipt of this document in evidence. If not, the suit relief is not covered by Section 22 of the said Act, it can be used for collateral purpose of evidencing terms other than the main covenant for sale, for which registration is not required.

15. Insofar as the stamp duty required for such document is concerned, since the document dated 15.01.2010, the then law existing regarding agreement of sale without possession shall be applied. Article 6 of schedule 1A of the Indian Stamp Act, 1899, deals with agreement of sale without possession. As per Act 21 of 1995, which came into effect from 31.03.1995, published in the official gazette, G.O.Ms.No.173, Revenue (Regn.II), dated 31.03.1995, the stamp duty payable is Rs.100/- if the value of the agreement exceeds Rs.50,000/-. Therefore, for the agreement of sale in question, stamp duty worth Rs.100/- is sufficient.

16. For better understanding, clause 6 of Schedule 1-A of the Indian Stamp Act, 1899 is excerpted hereunder:

17. Learned counsel for the petitioners submitted that the subject document requires stamp duty at the rate of 5% and referred to G.O.Ms.No.581, dated 30.11.2013. First of all, it is to be noted that the said G.O has no application to the present case. It has come into force with effect from 30.11.2013, whereas, the agreement of sale, in the case on hand, is dated 15.01.2010. The said GO relates to Article 6 B which deals with agreement of sale for construction of house or building etc., but not to mere simple agreement of sale. Therefore, since the present case is governed by Article 6A, but not Article 6B, the argument advanced in this regard is not acceptable.

18. Even Article 47A of schedule 1A of the Indian Stamp Act, 1899, does not apply to the suit agreement since the agreement of sale is not with possession of the property agreed to be sold, as required under explanation 1 thereto.

19. The trial Court committed error in postponing the decision on the question whether it requires registration and stamp duty. InR.V.E. Venkatachala Goundervs.Arulmigu Viswesaraswami and V.P. Temple and Anr.[1],the Supreme Court having referred to an earlier decision cited held as follows:

“The learned counsel for the defendant-respondent has relied on ‘The Roman Catholic Mission v. The State of Madras and Another [AIR 1966 SC 1457] in support of his submission that a document not admissible in evidence, though brought on record, has to be excluded from consideration. We do not have any dispute with the proposition of law so laid down in the above said case. However, the present one is a case which calls for the correct position of law being made precise. Ordinarily an objection to the admissibility of evidence should be taken when it is tendered and not subsequently. The objections as to admissibility of documents in evidence may be classified into two classes:- (i) an objection that the document which is sought to be proved is itself inadmissible in evidence; and (ii) where the objection does not dispute the admissibility of the document in evidence but is directed towards the mode of proofalleging the same to be irregular or insufficient. In the first case, merely because a document has been marked as 'an exhibit', an objection as to its admissibility is not excluded and is available to be raised even at a later stage or even in appeal or revision. In the latter case, the objection should be taken before the evidence is tendered and once the document has been admitted in evidence and marked as an exhibit, the objection that it should not have been admitted in evidence or that the mode adopted for proving the document is irregular cannot be allowed to be raised at any stage subsequent to the marking of the document as an exhibit. The later proposition is a rule of fair play. The crucial test is whether an objection, if taken at the appropriate point of time, would have enabled the party tendering the evidence to cure the defect and resort to such mode of proof as would be regular. The omission to object becomes fatal because by his failure the party entitled to object allows the party tendering the evidence to act on an assumption that the opposite party is not serious about the mode of proof.

BSB, J

BSB, J

C.R.P.No.5388 of 2018

On the other hand, a prompt objection does not prejudice the party tendering the evidence, for two reasons; firstly, it enables the Court to apply its mind and pronounce its decision on the question of admissibility then and there; and secondly, in the event of finding of the Court on the mode of proof sought to be adopted going against the party tendering the evidence, the opportunity of seeking indulgence of the Court for permitting a regular mode or method of proof and thereby removing the objection raised by the opposite party, is available to the party leading the evidence. Such practice and procedure is fair to both the parties. Out of the two types of objections, referred to hereinabove, in the later case, failure to raise a prompt and timely objection amounts to waiver of the necessity for insisting on formal proof of a document, the document itself which is sought to be proved, being admissible in evidence. In the first case, acquiescence would be no bar to raising the objection in superior Court.”

20. Thus, as per the above decision, where the objection is curable, it should be raised before marking of the document and if the objection relates to an incurable defect like registration, the same can be raised at any stage of the proceeding including the appeal or revision. Since payment of stamp duty is a curable defect and if it is found to be inadequately stamped, the same can be cured by paying necessary stamp duty along with penalty as required under law. Since want of registration cannot be cured after some time after execution of the document as provided under the provisions in Registration Act and the rules made therein, the same cannot be cured, in the present case, at any stage. But, since the proviso to Section 49 of the Registration Act itself allows exemptions which are already discussed supra, the same can be appreciated since the objection as to registration is raised along with objection for deficit stamp duty. Moreover, raising such objections at an early stage is not prohibited though it can be raised also at a subsequent stage. Therefore, decision on objection of the defendants cannot be postponed in the present case, since the document if already stamped for Rs.100/-, the same requires no further stamp duty and in such an event, the trial can be continued, if not deficit stamp duty with penalty can be collected by impounding the document and on such payment, the document becomes admissible to be read in evidence.

21. Subject to the above observations, the Civil Revision Petition is disposed of.

There shall be no order as to costs.

Miscellaneous petitions, if any, pending shall stand closed.

30-12-2022 RAR

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B. S. BHANUMATHI, J