Karnataka High Court
M C Somashekar vs Official Liquidator on 18 September, 2025
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CA No.326 of 2021
C/W CA No.419 of 2022
In COP No.02/2000
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF SEPTEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE E.S.INDIRESH
COMPANY APPLICATION NO.326 OF 2021
C/W
COMPANY APPLICATION NO.419 OF 2022
IN
COMPANY PETITION NO.02 OF 2000
IN CA.NO.326/2021
BETWEEN:
1. M.C. SOMASHEKAR
S/O LATE P.M. CHANNABASAVANNA
AGED ABOUT 64 YEARS
R/AT NO.14, KALIDASA ROAD
MYSURU - 570002.
2. M.C. SWARNALATHA
W/O M. MANJUNATH &
Digitally signed by D/O LATE P.M.CHANNABASAVANNA
SHARMA ANAND
CHAYA AGED ABOUT 62 YEARS
Location: HIGH R/AT NO.472, 10TH MAIN
COURT OF
KARNATAKA R.M.V. EXTENSION
BENGALURU - 560080.
3. M.C.MOHAN KUMARI
W/O H.S.MAHADEVA PRASAD &
D/O LATE P.M.CHANNABASAVANNA
AGED ABOUT 60 YEARS
R/AT NO.20, GAGANACHUMBI
DOUBLE ROAD
KUVEMPUNAGAR,
MYSURU-570023.
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CA No.326 of 2021
C/W CA No.419 of 2022
In COP No.02/2000
HC-KAR
4. M.C. MALLIKARJUN
AGED ABOUT 58 YEARS
R/AT NO.53/A, II CROSS
KALIDASA ROAD
JAYALAKSHMIPURAM
MYSURU-570012.
...APPLICANTS
(BY SRI. B.K. SAMPATH KUMAR, SENIOR ADVOCATE FOR
SRI. G.S. PRASANNA KUMAR, ADVOCATE)
AND:
OFFICIAL LIQUIDATOR
HIGH COURT OF KARNATAKA,
M/S. KIRLOSKAR INVESTMENT AND
FINANCE LTD. (IN LIQUIDATION)
CORPORATE BHAVAN
NO.26-27, 12TH FLOOR
RAHEJA TOWERS, M.G. ROAD
BENGALURU - 560001.
...RESPONDENT
(BY MISS. KRUTIKA RAGHAVAN, ADVOCATE FOR
OFFICIAL LIQUIDATOR)
THIS COMPANY APPLICATION IS FILED UNDER RULES 6
AND 9 OF THE COMPANIES (COURT) RULES, 1959, PRAYING
TO DIRECT THE RESPONDENT TO HANDOVER THE ORIGINAL
TITLE DEEDS OF THE SCHEDULE PROPERTY BEARING NO.2997,
TEMPLE ROAD, VANIVILAS MOHALLA, MYSURU-570002
MEASURING EAST:87.50 FT., WEST: 85.75 FT., NORTH:
160FT., AND SOUTH: 158.25 FT. TOTALLY MEASURING 13630
SFT OR 1266 SQ.MT. TO THE APPLICANTS HEREIN.
IN CA.NO.419/2022
BETWEEN:
OFFICIAL LIQUIDATOR
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CA No.326 of 2021
C/W CA No.419 of 2022
In COP No.02/2000
HC-KAR
HIGH COURT OF KARNATAKA,
M/S. KIRLOSKAR INVESTMENT AND
FINANCE LTD. (IN LIQUIDATION)
CORPORATE BHAVAN
NO.26-27, 12TH FLOOR
RAHEJA TOWERS, M.G. ROAD
BENGALURU - 560001.
...APPLICANT
(BY MISS. KRUTIKA RAGHAVAN, ADVOCATE FOR
OFFICIAL LIQUIDATOR)
AND:
1. M.C. SOMASHEKAR
S/O LATE P.M. CHANNABASAVANNA
AGED ABOUT 64 YEARS
R/AT NO.14, KALIDASA ROAD
MYSURU - 570002.
2. MR. M.C. MALLIKARJUN
S/O LATE P.M. CHANNABASAVANNA
R/AT NO.53/A, II CROSS
KALIDASA ROAD
JAYALAKSHMIPURAM
MYSURU-570012.
3. MRS. M.C. SWARNALATHA
W/O M. MANJUNATH &
D/O LATE P.M.CHANNABASAVANNA
# B 204, WHISPERING MEADOWS
1ST MAIN ROAD, DOLLARS COLONY
RMV 2ND STAGE
BENGALURU - 560094.
4. MRS. M.C. MOHAN KUMARI
D/O LATE P.M.CHANNABASAVANNA
R/AT NO.20, GAGANACHUMBI,
DOUBLE ROAD, KUVEMPUNAGAR,
MYSURU-570023.
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CA No.326 of 2021
C/W CA No.419 of 2022
In COP No.02/2000
HC-KAR
...RESPONDENTS
(BY SRI. B.K. SAMPATH KUMAR, SENIOR ADVOCATE FOR
SRI. G.S. PRASANNA KUMAR, ADVOCATE)
THIS COMPANY APPLICATION IS FILED UNDER RULES 6
AND 9 OF THE COMPANIES (COURT) RULES, 1959, PRAYING
TO DIRECT THE RESPONDENT TO CO-OPERATE AND OBTAIN
NECESSARY CHANGES IN RELEVANT REVENUE RECORDS
BEFORE THE APPROPRIATE AUTHORITY ON SCHEDULE 'A'
PROPERTY SO THAT THE REVENUE RECORDS REFLECT THE
NAME OF THE COMPANY IN LIQUIDATION AS THE OWNER OF
THE SCHEDULE 'A' PROPERTY TO ENABLE THE OFFICIAL
LIQUIDATOR TO BRING THE PROPERTY FOR A SALE WITH THE
APPROVAL OF THIS HON'BLE COURT.
THESE APPLICATIONS HAVING BEEN RESERVED FOR
ORDERS, COMING ON FOR PRONOUNCEMENT, THIS DAY, E.S.
INDIRESH J., MADE THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE E.S.INDIRESH
CAV ORDER
1. In CA No.326 of 2021, the applicants claim to be
the children of late P. M. Channabasavanna and Smt.
H.N. Saroja. It is stated that, father of the applicants
acquired the property bearing No.2997, Temple Road,
Vanivilasa Mohalla, Mysore as per registered Sale
Deed dated 05.06.1982 (Annexure-A). It is further
stated that, the applicants are co-owners of the
aforementioned property. It is further stated that the,
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C/W CA No.419 of 2022
In COP No.02/2000
HC-KAR
parents of the applicants had entered into Joint
Development Agreement dated 30.06.1997
(Annexure-B) with M/s. Kirlosker Investments and
Finance Ltd., (hereinafter referred to as Company in
liquidation). The Company in liquidation failed to
perform its obligation as per the terms and conditions
stipulated in the Joint Development Agreement, and in
this regard, father of the applicants addressed letter
dated 28.02.1988 about the non-performance of the
obligation by the Company in liquidation and also
made a reference for revocation of Joint Development
Agreement. In reply to the same, the Company in
liquidation by reply dated 18.03.1998 expressed their
inability to complete the project within stipulated
period (Annexures-C and D respectively). Thereafter,
legal notice dated 17.12.1999 (Annexure-E) was
issued by the parents of the applicants. Father of the
applicants-P.M. Channabasavanna died on 25.01.2000
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In COP No.02/2000
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and mother of the applicants-H.N. Saroja, died on
22.03.2001 and as such, the applicants succeed to the
estate of the deceased parents. It is also stated that,
negotiations were held with regard to construction of
the building and an extent of 10045 Sq.Ft. in built up
area was offered to the applicants in lieu of
apartments to be constructed on the schedule
property. In this regard, the Company in liquidation
had paid the sale consideration of Rs.74,33,000/- to
the applicants. It is the grievance of the applicants
that, the Company in liquidation failed to handover the
original title deeds and as such, it is contended that,
no title has been transferred in favour of the Company
in liquidation in terms of the unregistered Joint
Development Agreement. It is further stated in the
application that, on account of loss in the business,
and financial crises, the Company in liquidation,
suffered an order of winding up of the Company as per
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C/W CA No.419 of 2022
In COP No.02/2000
HC-KAR
the order passed by this Court on 24.12.2010.
Thereafter, learned Official Liquidator was appointed
to look after the affairs of the company in liquidation,
hence, it is the case of the applicants that as the
agreements entered into between the father of the
applicants with the Company under liquidation in
terms of Joint Development Agreement dated
30.06.1997 was not materialised and same has not
been acted upon by the parties and as such, the
applicants presented CA No.326 of 2021 seeking
direction to the learned Official Liquidator to return the
original title deeds in respect of schedule property and
also under takes to refund sum of Rs.74,33,000/- to
the Company in liquidation.
2. In CA No. 419 of 2022, the applicant is learned
Official Liquidator of the Company in liquidation,
stated that, the parents of the applicants have entered
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C/W CA No.419 of 2022
In COP No.02/2000
HC-KAR
into Joint Development Agreement dated 30.06.1997
with the Company in liquidation to develop a multi
storied residential apartment and the Company was to
complete the construction and handover the
possession of the built up space to an extent of 33%
in the Schedule Property to the parents of the
applicants. In this regard, Company in liquidation
entered into an agreement dated 09.09.1997 with
M/s. Nadig Constructions and Company, and further
contended that, the Company in liquidation unable to
fulfil its obligation in handing over the share of the
owners. It is also stated that bilateral negotiation has
been made between the company under liquidation
and owners of the schedule properties and certain
adjustments were worked out as per the Exchange
Agreement on 22.03.2001 in respect of schedule
property. It is also stated that, this court by order
dated 24.12.2010, ordered for winding up of the
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CA No.326 of 2021
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In COP No.02/2000
HC-KAR
Company in liquidation and learned Official Liquidator
has been appointed to discharge the affairs the
Company under liquidation. It is the case of the
applicant that, learned Official Liquidator was unaware
about the Exchange Agreement made by the Company
under liquidation with the legal representatives of the
Joint Development Agreement partners. It is also
stated that, at the intervention of this Court in CA No.
326 of 2021, the learned Official Liquidator was able
to secure the copy of the Exchange Agreement dated
22.03.2022 (Annexure-A). It is further stated in the
application that, sale deeds have been executed in
favour of the respondents in respect of the 'B'
Schedule Property, however, 'A' Schedule Property
has been retained by the Company in liquidation. It is
further stated that, there are more than 43000 deposit
holders to the tune of more than 60 Crores, and
therefore, it is the claim of the applicant- learned
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In COP No.02/2000
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Official Liquidator that, a direction be issued to the
respondents (legal representatives of the owners of
the schedule property) to co-operate for necessary
changes in the revenue records pertaining to the
share of the Company under liquidation in respect of
'A' Schedule Property. Hence, learned Official
Liquidator has filed CA No.419 of 2022.
3. Heard Sri. B. K. Sampath, Kumar learned Senior
Counsel appearing on behalf of learned counsel Sri. G.
S. Prasanna Kumar, for the applicants (legal
representatives of the original owner) and Smt.
Krutika Raghavan, learned counsel appearing for
learned Official Liquidator.
4. Sri. B. K. Samapth Kumar, learned Senior
Counsel for the applicants in CA No.326 of 2021 and
respondents in CA No.419 of 2022 argued that,
subject land is belong to the parents of the applicants.
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In COP No.02/2000
HC-KAR
The applicants in CA No. 326 of 2021 disputes the
claim made by the learned Official Liquidator based on
the Joint Development Agreement, dated 30.06.1997
(Annexure-B in CA No. 326 of 2021). It is submitted
that, the Joint Development Agreement dated
30.06.1997 is not a registered document, which
requires compulsorily registration, as there is sharing
of apartments, as per Clause 2 and 5 of the Joint
Development Agreement, said to have been executed
by the parents of the applicants in favour of
M/s.Kirlosker Investments and Finance Ltd.,- the
Company in liquidation. It is also submitted by the
learned Senior Counsel that, since, the Company in
liquidation did not comply with the terms and
conditions stipulated in the Joint Development
Agreement and further, parents of the applicants
caused legal notice dated 17.12.1999 (Annexure-E in
CA No.326 of 2021) terminating the Joint
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In COP No.02/2000
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Development Agreement and to take legal action for
recovery of damages as per Clause 'A' of the legal
notice, (Annexure-E in CA No.326 of 2021) and
therefore, argued that, the Joint Development
Agreement is unsustainable and contrary to law.
Referring to these aspects, the learned Senior Counsel
appearing for the applicants submitted that, since the
said document is inadmissible in evidence though
marked during evidence not being used for collateral
purpose, on account of the fact that, the said
document is unregistered and therefore, it is
contended that, the claim made by the learned Official
Liquidator through the Company in liquidation requires
to be dismissed and to direct the learned Official
Liquidator to release the title deeds in favour of the
applicants, being legal representatives of the deceased
P.M. Chennabasavanna. It is also argued by the
learned Senior Counsel, by referring to Section 17 and
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In COP No.02/2000
HC-KAR
49 of the Registration Act, that, as the Joint
Development Agreement dated 30.06.1997,
(Annexure-B in CA No.326 of 2021) and Exchange
Agreement dated 22.03.2001 (Annexure-A in CA
No.419 of 2022), are unstamped and are not
registered as required under law and therefore, sought
for interference of this Court. It is also submitted by
the learned Senior Counsel appearing for the
applicants in CA No.326 of 2021, that, the defects in
the alleged Joint Development Agreement dated
30.06.1997 and the Exchange Agreement dated
22.03.2001, which are compulsorily registrable
documents are incurable and they have been marked
during evidence erroneously, and therefore, as these
documents are unregistered and undervalued
documents, are inadmissible in evidence and no rights
would be conveyed between the parties under those
documents and in this regard, learned Senior Counsel
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places reliance on the judgment of the Hon'ble
Supreme Court, in the case of Suraj Lamps And
Industries Limited Vs. State of Haryana and
Another reported in (2012) 1 SCC 656, in the case
of Vinod Infra Developers Ltd vs. Mahaveer Lunia
reported in AIR 2025 SC 2933, in the case of Sushil
Kumar Agarwal vs. Meenakshi Sadhu and Others
reported (2019) 2 SCC 241 and in the case of
Shyam Narayan Prasad vs. Krishna Prasad and
Others reported in (2018) 7 SCC 646.
5. Nextly it is contended by the learned Senior
Counsel for the applicants that, mere marking of the
alleged documents, referred to above, does not cure
inadmissibility and as such, referred to the judgment
of the Hon'ble Supreme Court n the case of G M
Shahul Hameed vs. Jayanthi R Hegde reported in
2024 INSC 493, in the case of Hemendra Rasiklal
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In COP No.02/2000
HC-KAR
Ghia vs. Subodh Mody reported in (2009) 2 AIR
Bom R 296 (FB), and in the case of R.V.E.
Venkatachala Gounder vs. Arulmigu
Viswesaraswami & V.P. Temple and Another
reported in (2003)8 SCC 752. It is also contended by
the learned Senior Counsel for the applicants that, as
the learned Official Liquidator neither sought for
recovery of sale consideration nor cancellation of the
sale deeds as required under Section 31 of the
Specific Relief Act, and as such, submitted that the
relief claimed by the learned Official Liquidator is
barred by limitation and accordingly, sought for
allowing CA No.326 of 2021 and to dismiss the CA No.
419 of 2022 filed by the learned Official Liquidator.
6. Per contra, Smt. Krutika Raghavan, learned
counsel appearing for the applicant- Official Liquidator
in CA No.419 of 2022 and respondent in CA No.326 of
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In COP No.02/2000
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2021, submits that as per the Joint Development
Agreement, the Company in liquidation was to
complete the construction and to handover the
possession of 33% of the subject land, to the original
owners, however, as the contractor (M/s. Nadig
Construction and Company) has failed to complete the
project in time, resulting in non-fulfilment of
obligations in the Joint Development Agreement. It is
also argued that, 07 flats of 1045 Sf ft, along with
respective car parking space in another location was
allotted to the children of the agreement holders
(Applicants in C A No. 326 of 2021), in exchange for
giving up their claim in land in question and therefore,
submitted that the respondents in the application have
acquiesced their rights and title in respect of the
schedule land and therefore, opposed the arguments
of the learned Senior Counsel appearing for the
applicants in CA No.326 of 2021. It is also argued by
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In COP No.02/2000
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the learned Official Liquidator that, as per the order
dated 24.12.2010 passed by this court, the Company
in liquidation was wound up and further, learned
Official Liquidator was unaware about the execution of
Exchange Agreement dated 22.03.2001 by the
respondent and the Company in liquidation and
therefore, contended that, as the Company being
partner to the Joint Development Agreement and
Exchange Agreement and further, having taken
benefit out of the Exchange Agreement, the
application filed by the applicants in CA No.326 of
2021, does not survive for consideration. It is also
argued by the learned counsel appearing for Official
Liquidator that, the respondents have to co-operate
for necessary modification in the revenue records, and
if the application filed by the contesting respondents
i.e. applicants in CA No.326 of 2021 is allowed and
same would cause irreparable loss to the
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In COP No.02/2000
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creditors/share holders of the Company in liquidation
and accordingly, sought for dismissal of CA No.326 of
2021 and to allow CA No.419 of 2022 by directing the
respondents to co-operate for change of revenue
records in respect of schedule property. In order to
buttress her arguments, learned Official Liquidator
places reliance on the judgment of the Hon'ble
Supreme Court in the case of R.V.E. Venkatachala
Gounder vs. Arulmigu Viswesaraswami & V.P.
Temple and Another reported in (2003) 8 SCC 752
and in the case of Korukonda Chalapathi Rao and
Another vs. Korukonda Annapurna Sampath
Kumar reported in (2022) 15 SCC 475.
7. Having heard the learned counsel appearing for
the parties, I have carefully examined the original
records.
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In COP No.02/2000
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8. It is not in dispute that, the property bearing
No.2997, Temple Road, Vanivilas Mohalla, Mysuru was
acquired by P.M. Channabasavanna (father of the
applicants in CA No.326 of 2021) as per the registered
Sale Deed dated 05.06.1982. The said P.M.
Channabasavanna entered into Joint Development
Agreement dated 30.06.1997 (Annexure-A in CA
No.326 of 2021) with M/s. Kirloskar Investments and
Finance Limited (Company in Liquidation). Perusal of
Clause 7 and 22 of the said Joint Development
Agreement would indicate that, the Company under
liquidation shall develop and deliver the Apartments to
be constructed therein, within a period of 18 months
from the commencement of the project. Perusal of
the record would indicate that, the Company in
liquidation failed to adhere to the terms and conditions
of the Joint Development Agreement dated
30.06.1997. In the meanwhile, the said P.M.
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In COP No.02/2000
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Channabasavanna addressed a letter dated
28.02.1998 to the Company in liquidation, calling for
settlement of accounts on the ground of non-
performance of their obligation as per terms and
conditions of the Joint Development Agreement.
Pursuant to the same, Company in liquidation, by its
letter dated 18.03.1998 admitted their inability to
complete the project as per the Joint Development
Agreement and sought time to complete the project at
the earliest. In the meanwhile, P.M. Channabasavanna
issued a legal notice dated 17.12.1999 to the
Company in liquidation, terminating the Joint
Development Agreement dated 30.06.1997. It is also
pertinent to mention here that, Reserve Bank of India,
filed Company Petition No.2 of 2000 before this Court
and sought for winding up of the Company in
liquidation and this Court, after considering the report
of the Committee of Management, by its order dated
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In COP No.02/2000
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24.12.2010, ordered for winding up of the Company.
The Official Liquidator attached to this Court was
directed to take over the affairs of the Company in
liquidation as per Section 449 of the Companies Act,
1956. It is also forthcoming from the records that,
P.M. Channabasavanna died on 25.01.2000 and his
wife - Smt. H.N. Saroja died on 22.03.2001 leaving
behind their legal representatives, who are the
applicants in CA No.326 of 2021 . In that view of the
matter, it is not in dispute that, the applicants in CA
No.326 of 2021, succeed to the estate of deceased
P.M. Channabasavanna. It is also to be noted that,
after the termination of the agreement by said P.M.
Channabasavanna with the Company in liquidation,
negotiations were held and some of the Apartments
totalling to 10,045 Sq.ft. built up area in an alternate
location -Hemavathi Apartments were offered to be
acquired for the benefit of the applicants. The
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In COP No.02/2000
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Company in liquidation had paid Rs.74,33,000/- to the
applicants. It is also not in dispute that, the Company
in liquidation, has not completed the project and
therefore, the Joint Development Agreement dated
30.06.1997 was impliedly cancelled on account of not
fulfilling the conditions mentioned therein.
9. It is pertinent to mention here that, at the time
of recording of evidence, unregistered Joint
Development Agreement dated 30.06.1997 was
marked as Ex.P2 and further, unregistered Exchange
Agreement dated 22.03.2001 was marked as Ex.R2
The entire case of the Official Liquidator is based on
these two unregistered documents, wherein, the
parents of the applicants in CA No.326 of 2021 - P.M.
Channabasavanna and his wife Smt. H.N. Saroja
entered into an agreement with the Company in
liquidation to develop the schedule property. Perusal
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In COP No.02/2000
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of the recitals in these two documents, reveals about
conveyance of the portion of the property by P.M.
Channabasavanna and H.N. Saroja, in favour of the
Company under liquidation. It is also to be noted that,
as per the Joint Development Agreement dated
30.06.1997, Clause 5, 9, 10, 12 and 22, provides for
sharing of flats in the undivided portion of the land in
question in the schedule property by the parties to the
contract. Clause 15 of the Joint Development
Agreement, stipulates that the Company in liquidation
shall complete the entire project within a period of 18
months from the date of commencement of the
project. Clause 16 of the Joint Development
Agreement provides that the original title deeds of the
schedule property shall be retained by the Company in
liquidation. Indisputably, these two documents
namely, Joint Development Agreement dated
30.06.1997 (Ex.P2) and Exchange Agreement dated
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22.03.2001 (Ex.R2) are unregistered. Taking into
consideration the recitals of these two documents, as
the owners of the schedule property conveying portion
of the undivided interest in favour of the Company in
liquidation, these two documents are compulsorily
required to be registered under Section 17 of the
Registration Act and duly stamped as per Section 5(f)
of the Karnataka Stamp Act, 1957. In this regard, it is
relevant to follow the declaration of law made by the
Hon'ble Supreme Court in the case of Vinod Infra
Developers Ltd (supra) wherein, paragraphs 9.13
and 9.24 of the Judgment reads as under:
"9. ****
13. Recently in K.B. Shah and Sons (P)
Ltd v. Development Consultant Ltd, this Court
noticed the following statement of Mulla in his
Indian Registration Act, (7th Edn., at p. 189):
"The High Courts of Calcutta, Bombay,
Allahabad, Madras, Patna, Lahore, Assam,
Nagpur, Pepsu, Rajasthan, Orissa, Rangoon
and Jammu & Kashmir; the former Chief Court
of Oudh; the Judicial Commissioner's Court of
Peshawar, Ajmer and Himachal Pradesh and
the Supreme Court have held that a document
which requires registration under Section 17
and which is not admissible for want of
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In COP No.02/2000
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registration to prove a gift or mortgage or sale
or lease is nevertheless admissible to prove
the character of the possession of the person
who holds under it......"
This Court then culled out the following
principles : (K.B. Saha Case, SCC p. 577, para
34)
"1. A document required to be registered, if
unregistered is not admissible into evidence
under Section 49 of the Registration Act.
2. Such unregistered document can
however be used as an evidence of collateral
purpose as provided in the proviso to Section
49 of the Registration Act.
3. A collateral transaction must be
independent of, or divisible from, the
transaction to effect which the law required
registration.
4. A collateral transaction must be a
transaction not itself required to be effected by
a registered document, that is, a transaction
creating, etc. any right, title or interest in
immovable property of the value of one
hundred rupees and upwards.
5. If a document is inadmissible in evidence
for want of registration, 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."
***
24. We therefore reiterate that immovable
property can be legally and lawfully
transferred/conveyed only by a registered
deed of conveyance. Transactions of the
nature of 'GPA sales' or 'SA/GPA/WILL
transfers' do not convey title and do not
amount to transfer, nor can they be
recognized or valid mode of transfer of
immoveable property. The courts will not treat
such transactions as completed or concluded
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transfers or as conveyances as they neither
convey title nor create any interest in an
immovable property. They cannot be
recognized as deeds of title, except to the
limited extent of section 53-A of the TP Act.
Such transactions cannot be relied upon or
made the basis for mutations in Municipal or
Revenue Records. What is stated above will
apply not only to deeds of conveyance in
regard to freehold property but also to transfer
of leasehold property. A lease can be validly
transferred only under a registered assignment
of lease. It is time that an end is put to the
pernicious practice of SA/GPA/WILL
transactions known as GPA sales."
10. It is held by the Hon'ble Supreme Court in the
above case, that if a document requires compulsory
registration and duly stamped, is an unregistered
document and same is not admissible in evidence
under Section 49 of the Registration Act. Even if such
a document is unregistered, same shall be considered
for proving a collateral transaction and such
transaction not itself requires to be effected by a
registered document and to prove the other
documents independently. It is to be noted that, such
inchoate document be referred for limited purpose
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only and same do not convey title or interest over the
schedule property.
11. The Hon'ble Supreme Court in the case of Suraj
Lamps And Industries Limited (supra), held that,
the document which provides for transfer of ownership
or interest in immovable property of value exceeding
Rs.100/- is required to be compulsorily registered. In
the case of Susheel Kumar Agarwal vs. Meenakshi
Sadhu and Others reported in (2019) 2 SCC 241,
at paragraph No.23 held as follows:
"23. In the present case, the respondent
agreed to pay the appellant the costs and
expenses along with the agreed remuneration
upon completion of the construction. If the
respondent failed to pay, the appellant was
entitled to realise its money by selling 58% of the
total constructed area. Clauses 6, 10 and 11 of
the agreement indicate that the respondent would
retain 42% of the total constructed area and the
balance 58% would remain secured for due
payment of the construction costs. It was further
agreed, that the total construction costs shall not
exceed 58% of the constructed area. The
intention of the parties is clear from the
agreement. This was an agreement to carry out
the construction of the building for which payment
of the construction costs and agreed
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remuneration had to be made. The agreement did
not create an interest in the land for the
developer. If the payment due to the developer
was made, there would arise no security interest.
Moreover, the security interest in respect of 42%
of the constructed area would arise only if the
construction came up and the payment due to the
builder was not made. In the present case,
admittedly there is no construction at all."
12. It is also to be noted that, if a Joint Development
Agreement involves transfer of rights in the built up
area in an undivided share in the land in question,
such transfer constitutes conveyance which requires
compulsory registration under law. It is also to be
noted that, Hon'ble Supreme Court in the case of
Sham Narayan Prasad Vs. Krishna Prasad and
Others, reported in (2018) 7 SCC 646, held that,
Section 118 of the Transfer of Property Act read with
Section 17 of the Registration Act, mandates
compulsory registration of the Exchange of immovable
property by the parties to the document in question.
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Paragraphs 18 to 22 of the Sham Narayan (supra),
reads as under:
"18. It is clear from this provision that where
either of the properties in exchange are
immovable or one of them is immovable and the
value of anyone is Rs 100 or more, the provision
of Section 54 of the TP Act relating to sale of
immovable property would apply. The mode of
transfer in case of exchange is the same as in the
case of sale. It is thus clear that in the case of
exchange of property of value of Rs 100 and
above, it can be made only by a registered
instrument. In the instant case, the exchange
deed at Ext. P-2 has not been registered.
19. Section 49 of the Registration Act, 1908
provides for the effect of non-registration of the
document, which is as under:
"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:"
20. Section 17(1)(b) of the Registration Act
mandates that any document which has the effect
of creating and taking away the rights in respect
of an immovable property must be registered and
Section 49 of the Registration Act imposes bar on
the admissibility of an unregistered document and
deals with the documents that are required to be
registered under Section 17 of the Registration
Act. Since, the deed of exchange has the effect of
creating and taking away the rights in respect of
an immovable property, namely, RCC building, it
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requires registration under Section 17. Since the
deed of exchange has not been registered, it
cannot be taken into account to the extent of the
transfer of an immovable property.
21. In Roshan Singh v. Zile Singh [Roshan
Singh v. Zile Singh, AIR 1988 SC 881 : (1988) 2
SCR 1106] , this Court was considering the
admissibility of an unregistered partition deed. It
was held thus: (AIR p. 885, para 9)
"9. ... Section 17(1)(b) lays down that a
document for which registration is compulsory
should, by its own force, operate or purport to
operate to create or declare some right in
immovable property. ... Two propositions must
therefore flow:
(1) A partition may be affected orally; but if
it is subsequently reduced into a form of a
document and that document purports by itself
to effect a division and embodies all the terms
of bargain, it will be necessary to register it. If
it be not registered, Section 49 of the Act will
prevent its being admitted in evidence.
Secondary evidence of the factum of partition
will not be admissible by reason of Section 91
of the Evidence Act, 1872."
(emphasis supplied)
22. It is clear from the above judgment that
the best evidence of the contents of the document
is the document itself and as required under
Section 91 of the Evidence Act the document itself
has to be produced to prove its contents. But
having regard to Section 49 of the Registration
Act, any document which is not registered as
required under law, would be inadmissible in
evidence and cannot, therefore, be produced and
proved under Section 91 of the Evidence Act.
Since Ext. P-2 is an unregistered document, it is
inadmissible in evidence and as such it can
neither be proved under Section 91 of the
Evidence Act nor any oral evidence can be given
to prove its contents. Therefore, the High Court
has rightly discarded the exchange deed at Ext. P-
2."
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13. It is also relevant to mention that, if an
unregistered document is marked during the trial,
even in the absence of objection raised by the other
side, same shall not cure inadmissibility of such
document and such document is void and do not
confer any rights to the parties. It is to be noted that,
Hon'ble Supreme Court in the case of G.M. Shahul
Hamid (supra), speaking through the Hon'ble Shri.
Justice Dipankar Datta, at paragraphs 14 to 21, held
as follows:
"14. The Presiding Officer of a court being
authorised in law to receive an instrument in
evidence, is bound to give effect to the mandate
of Sections 33 and 34 and retains the authority to
impound an instrument even in the absence of
any objection from any party to the proceedings.
Such an absence of any objection would not
clothe the Presiding Officer of the court with
power to mechanically admit a document that is
tendered for admission in evidence. The same
limitation would apply even in case of an
objection regarding admissibility of an instrument,
owing to its insufficient stamping, being raised
before a court of law. Irrespective of whether
objection is raised or not, the question of
admissibility has to be decided according to law.
The Presiding Officer of a court when confronted
with the question of admitting an instrument
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chargeable with duty but which is either not
stamped or is insufficiently stamped ought to
judicially determine it. Application of judicial mind
is a sine qua non having regard to the express
language of Sections 33 and 34 and interpretation
of pari materia provisions in the Stamp Act, 1899
("the 1899 Act" hereafter) by this Court.
However, once a decision on the objection is
rendered -- be it right or wrong -- Section 35
would kick in to bar any question being raised as
to admissibility of the instrument on the ground
that it is not duly stamped at any stage of the
proceedings and the party aggrieved by alleged
improper admission has to work out its remedy as
provided by Section 58 of the 1957 Act.
15. Profitable reference may be made to the
decision of this Court in Javer Chand v. Pukhraj
Surana [Javer Chand v. Pukhraj Surana, 1961
SCC OnLine SC 22 : (1962) 2 SCR 333 : AIR 1961
SC 1655] . There, provisions of Section 36 of the
1899 Act, which is pari materia Section 35 of the
1957 Act, came up for consideration. A Bench of
four Hon'ble Judges of this Court held [Javer
Chand v. Pukhraj Surana, 1961 SCC OnLine SC 22
: (1962) 2 SCR 333 : AIR 1961 SC 1655] that
when a document's admissibility is questioned
due to improper stamping, it must be decided
immediately when presented as evidence. The
relevant paragraph is extracted hereunder : (SCC
OnLine SC para 4)
"4. ... Where a question as to the
admissibility of a document is raised on the
ground that it has not been stamped, or has
not been properly stamped, it has to be
decided then and there when the document is
tendered in evidence. Once the court, rightly
or wrongly, decides to admit the document in
evidence, so far as the parties are concerned,
the matter is closed. Section 35 is in the
nature of a penal provision and has far-
reaching effects. Parties to a litigation, where
such a controversy is raised, have to be
circumspect and the party challenging the
admissibility of the document has to be alert
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to see that the document is not admitted in
evidence by the court. The court has to
judicially determine the matter as soon as the
document is tendered in evidence and before it
is marked as an exhibit in the case. The record
in this case discloses the fact that the hundis
were marked as Exts. P-1 and P-2 and bore
the endorsement "admitted in evidence" under
the signature of the court. It is not, therefore,
one of those cases where a document has
been inadvertently admitted, without the court
applying its mind to the question of its
admissibility. Once a document has been
marked as an exhibit in the case and the trial
has proceeded all along on the footing that the
document was an exhibit in the case and has
been used by the parties in examination and
cross-examination of their witnesses, Section
36 of the Stamp Act comes into
operation. Once a document has been
admitted in evidence, as aforesaid, it is not
open either to the trial court itself or to a court
of appeal or revision to go behind that order.
Such an order is not one of those judicial
orders which are liable to be reviewed or
revised by the same court or a court of
superior jurisdiction."
(emphasis ours)
16. Once again, addressing a matter
concerning Section 36 of the 1899 Act, a Bench of
three Hon'ble Judges of this Court in Ram
Rattan v. Bajrang Lal [Ram Rattan v. Bajrang Lal,
(1978) 3 SCC 236] held as follows : (SCC pp.
239-40, para 6)
"6. When the document was tendered in
evidence by the plaintiff while in witness box,
objection having been raised by the
defendants that the document was
inadmissible in evidence as it was not duly
stamped and for want of registration, it was
obligatory upon the learned trial Judge to
apply his mind to the objection raised and to
decide the objects in accordance with law.
Tendency sometimes is to postpone the
decision to avoid interruption in the process of
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recording evidence and, therefore, a very
convenient device is resorted to, of marking
the document in evidence subject to objection.
This, however would not mean that the
objection as to admissibility on the ground that
the instrument is not duly stamped is judicially
decided; it is merely postponed. In such a
situation at a later stage before the suit is
finally disposed of it would nonetheless be
obligatory upon the court to decide the
objection. If after applying mind to the rival
contentions the trial court admits a document
in evidence, Section 36 of the Stamp Act
would come into play and such admission
cannot be called in question at any stage of
the same suit or proceeding on the ground
that the instrument has not been duly
stamped. The court, and of necessity it would
be the trial court before which the objection is
taken about admissibility of document on the
ground that it is not duly stamped, has to
judicially determine the matter as soon as the
document is tendered in evidence and before it
is marked as an exhibit in the case and where
a document has been inadvertently admitted
without the court applying its mind as to the
question of admissibility, the instrument could
not be said to have been admitted in evidence
with a view to attracting Section 36 (see Javer
Chand v. Pukhraj Surana [Javer
Chand v. Pukhraj Surana, 1961 SCC OnLine
SC 22 : (1962) 2 SCR 333 : AIR 1961 SC
1655] ). The endorsement made by the
learned trial Judge that "Objected, allowed
subject to objection", clearly indicates that
when the objection was raised it was not
judicially determined and the document was
merely tentatively marked and in such a
situation Section 36 would not be attracted."
(emphasis ours)
17. The pivotal aspect emerging for
consideration on the terms of Sections 33 and 34
of the 1957 Act, with which we are concerned, is
that whether the trial court did judicially
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determine the question of admissibility. It is here
that we need to ascertain the rationale behind the
trial court's approach to go behind admission of
the GPA in evidence and marking thereof as an
exhibit, leading to the order under challenge
before the High Court. Relevant portions of the
order of the trial court read thus:
"2.*** There are two suits before this
Court, one is the present suit and another suit
is OS No. 301/03. In the present suit, the GPA
holder of plaintiff filed an affidavit by way of
chief examination in the morning session and
the documents were marked. While marking
the documents he was held up in the Court of
Civil Judge (Junior Division), Mangalore and
hence no objection regarding the deficiency of
stamp duty on GPA could be raised before this
Court. Accordingly the matter has been
adjourned for cross-examination of PW 1. The
alleged GPA is in favour of third party with
power to sell the property and hence Article 41
of the Karnataka Stamp Act, 1957 is applicable
and stamp duty on the market value has to be
paid on the same. The GPA is executed on a
stamp paper of value of Rs 100 only. As per
Section 33 of the Karnataka Stamp Act, 1957,
the court shall impound the said GPA even
without the objections by the advocate for 1st
defendant. His absence at the time of chief
examination of PW 1 is not intentional but as
he was held up in another court.
3. The 1st defendant has also filed IA No.
IX under Section 114, read with Section
151CPC to review the order of marking Ext. P-
2 which is insufficiently stamped and to hear
the objections regarding inadequacy of stamp
duty on the similar grounds.
***
7. The points that arise for consideration
are:
1. Whether Ext. P-2 GPA is insufficiently
stamped and plaintiff is liable to pay deficit
duty and penalty?
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2. Whether the order permitting the
plaintiff to mark the document requires to be
reviewed?
8. The points are answered in affirmative
for the following:
Reasons
9. *** The clauses are very specific that
the power of attorney has been given powers
to sell the properties and the power of
attorney has acted upon the GPA and has
executed the sale deed in favour of the
plaintiff as per Ext. P-3. Under Article 41(e),
when the power of attorney is given for
consideration and authorising the attorney to
sell the immovable property, the duty payable
is same duty as a conveyance for a market
value equal to the amount of the
consideration. As stated above, no
consideration has been mentioned in the GPA,
but the GPA has been given authorising to sell
the immovable property. The GPA has been
issued to a third party, ... Article 41(ab) is
applicable. The learned counsel for the plaintiff
objected for considering these applications on
the ground that the document is already
marked without any objections and hence the
question of reviewing the order considering the
question of stamp duty at this stage does not
arise. As seen from the order-sheet, the
plaintiff was examined on 6-6-2010 and
document was marked on same day.
Immediately on the next date of hearing the
counsel has filed IAs Nos. IX and X to consider
the aspect of payment of stamp duty and
penalty i.e. on the day on which the matter
was posted for cross-examination of PW 1. It
is certain that the Senior Counsel appearing
for the plaintiff was not present at the time of
examination of PW 1 in chief as the court
remembers that the junior counsel was
present and probably being unaware of the
question of stamp duty has not raised any
objections. The court has marked the
document as an exhibit and has put the seal
for having marked the document as to who
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has produced the document and admitted
through which witness and marked for
plaintiff. No doubt, there is mention that the
document is admitted through PW 1 and Ext.
P-2, but the court has not applied its mind
while marking the document as to whether
document is sufficiently stamped or
insufficiently stamped.
10.***The circumstances under which the
application is being filed and circumstances
under which the document came to be
marked, clearly show that the document was
marked without application of the mind of the
court and without objection of the other side
and this Court is of the view that the
admissibility of the document could be
considered at this stage.
ORDER
IAs Nos. IX and X are allowed."
(emphasis supplied)
18. On the face of such an order, it does not
leave any scope for doubt that on the date the
GPA was admitted in evidence and marked as an
exhibit, the trial court did not deliberate on its
admissibility, much less applied its judicial mind,
resulting in an absence of judicial determination.
In the absence of a "decision" on the question of
admissibility or, in other words, the trial court not
having "decided" whether the GPA was sufficiently
stamped, Section 35 of the 1957 Act cannot be
called in aid by the respondent. For Section 35 to
come into operation, the instrument must have
been "admitted in evidence" upon a judicial
determination. The words "judicial determination"
have to be read into Section 35. Once there is
such a determination, whether the determination
is right or wrong cannot be examined except in
the manner ordained by Section 35. However, in
a case of "no judicial determination", Section 35 is
not attracted.
19. In the light of the aforesaid reasoning of
the trial court of admitted failure on its part to
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apply judicial mind coupled with the absence of
the counsel for the appellant before it when the
GPA was admitted in evidence and marked
exhibit, a factor which weighed with the trial
court, we have no hesitation to hold that for all
purposes and intents the trial court passed the
order dated 19-10-2010 in exercise of its inherent
power saved by Section 151 CPC, to do justice as
well as to prevent abuse of the process of court,
to which inadvertently it became a party by not
applying judicial mind as required in terms of
Sections 33 and 34 of the 1857 Act. We
appreciate the approach of the trial court in its
judicious exercise of inherent power.
20. Reference to Section 58 of the 1957 Act by
the learned counsel for the respondent is without
substance. The clear language of Section 58
refers to a situation, where an order is passed
admitting an instrument in evidence as duly
stamped or as one not requiring a stamp, for its
attraction. As is evident from a bare reading of
the order dated 19-10-2010, the trial court did
neither hold the GPA as duly stamped or as not
requiring a stamp and, therefore, its applicability
was not attracted.
21. We may not turn a blind eye to the fact
that the Revenue would stand the risk of suffering
huge loss if the courts fail to discharge the duty
placed on it per provisions like Section 33 of the
1957 Act. Such provision has been inserted in the
statute with a definite purpose. The legislature
has reposed responsibility on the courts and
trusted them to ensure that requisite stamp duty,
along with penalty, is duly paid if an unstamped
or insufficiently stamped instrument is placed
before it for admission in support of the case of a
party. It is incumbent upon the courts to uphold
the sanctity of the legal framework governing
stamp duty, as the same are crucial for the
authenticity and enforceability of instruments.
Allowing an instrument with insufficient stamp
duty to pass unchallenged, merely due to
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technicalities, would undermine the legislative
intent and the fiscal interests of the State. The
courts ought to ensure that compliance with all
substantive and procedural requirements of a
statute akin to the 1957 Act are adhered to by the
interested parties. This duty of the court is
paramount, and any deviation would set a
detrimental precedent, eroding the integrity of the
legal system. Thus, the court must vigilantly
prevent any circumvention of these legal
obligations, ensuring due compliance and strict
adherence for upholding the rule of law."
14. The Hon'ble Supreme Court in the case of
Venkatachala Goundar (supra), at paragraph 20,
held as follows:
"20. The learned counsel for the defendant-
respondent has relied on Roman Catholic
Mission v. State of Madras [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 abovesaid 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
proof alleging 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
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or even in appeal or revision. In the latter case,
the objection should be taken when 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
latter 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. 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 latter
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 a superior court."
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15. The Full Bench of the Bombay High Court in the
case of Hemendra Rasiklal (supra) at paragraphs
55 to 62 and at paragraphs 73 and 74, held as
follows:
"55. The admissibility of the document in
evidence may be broadly classified into three
classes-(i) that objection to the document which
is sought to be proved is itself insufficiently
stamped and the objection relates to deficiency of
stamp duty of the document; (ii) where the
objection does not dispute admissibility of
document in evidence but is directed towards
the mode of proof alleging the same to be
irregular or insufficient; and (iii) the objection
that the document which is sought to be proved
is ab initio inadmissible in evidence.
56. In the first case, the Court, before which
the objection is taken about admissibility of
document on the ground that it is not duly
stamped, has to judicially determine the matter
as soon as the document is tendered in evidence
and before it is marked as an exhibit in the case
as held by the Constitution Bench in Zaver
Chand v. Pukhraj Surana (supra). Once a
document has been marked as an exhibit in the
case and has been used by the parties in
examination and cross-examination of their
witnesses, section 36 comes into operation.
57. Once a document has been admitted in
evidence, as aforesaid, it is not open either to the
trial Court itself or to a Court of Appeal or
Revision to go behind that order. Such an order is
not one of those judicial orders which are liable to
be reviewed or revised by the same Court or a
Court of superior jurisdiction. Similar view is
expressed by the Supreme Court in the case
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of Bipin Shantilal Panchal (supra); wherein it is
made clear that if the objection relates to
deficiency of stamp duty of a document, the Court
has to decide the objection before proceeding
further.
In the case of Ram Ratan v. Bajarang
Lal (supra) the Apex Court reiterating the
above view has observed that the Court, as of
necessity it would be trial Court, before which
the objection is taken about admissibility of
document on the ground that it is not duly
stamped, has to judicially determine the
matter as soon as the document is tendered in
evidence and before it is marked as an exhibit
in the case.
58. So the objection relating to deficiency of
duty cannot be raised or decided at the later
stage of the suit. It has to be decided there and
then unless taken on record subject to objection
so as to avoid the rigour of section 36 of the
Stamp Act.
In the second category of the case, the
objection should be taken when the evidence
is tendered. Once the document has been
admitted in evidence and marked as an
exhibit, the objection that it should not be
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. This proposition is rule of fair play.
The crucial test is whether an objection, if
taken at the appropriate point of time, would
enable the party tendering the evidence to
cure the defect and resort to such mode of
proof as would be regular.
59. The omission to object become 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
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serious about the mode of proof. 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 there and then; 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. 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.
60. If the objection to the proof of document is
not decided and the document is taken on record
giving tentative exhibit, then the right of the
cross-examiner is seriously prejudiced. Once the
document is used in cross-examination, then the
document gets proved and can be read in
evidence as held by the Supreme Court in the
case of Ram Janki Devi v. Juggilal Kamlapat, 1971
(1) SCC 477. If the cross-examiner decides not to
cross-examine based on unexhibited document
and, ultimately, at the fag end of the trial, the
document is held to be admissible and proved,
then, the cross-examiner as a rule of fair play
would be entitled to further opportunity to cross-
examine based on that document resulting in
delayed trial defeating the very object and
purpose of the amendment to the Civil Procedure
Code.
61. In the third case merely because a
document has been marked as "an exhibit", an
objection as to its admissibility is not excluded. It
is available to be raised even at later stage or
even in appeal or revision. There is no question of
inadmissible documents being read into evidence
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merely on account of such documents being given
exhibit numbers in affidavit filed by in
examination-in-chief or while recording oral
evidence. For example in case of unregistered
sale-deed or gift-deed or lease-deed requiring
registration, no evidence of the terms thereof can
be given. On the ground of public policy, evidence
derived from unpublished official records of the
State cannot be given except with the permission
of the head of the department concerned as laid
down under section 123 of the Evidence Act.
62.Such a document, therefore, can be
tentatively exhibited and the decision thereon can
be postponed till the suit reaches the stage of
judgment. However such objection has also to be
decided before the judgment is delivered. The
objection to the admissibility of such evidence can
always be taken at any stage of the suit.
Thus, we hold and rule that ordinarily an
objection to the admissibility of the document
in first and second categories of cases
(excluding third type of case) has to be taken
before the document is exhibited which,
necessarily, postulates decision on the
objection then and there.
***
73. However, by way of exception, the
objection relating to the admissibility of the
document requiring resolution of complex issues,
having effect of arresting progress of the matter,
or if the admissibility of the evidence is dependent
on receipt of further evidence, then, in such cases
the trial Court can, in the interest of justice, defer
the issue of deciding admissibility of the
document. In Ram Ratan v. Bajarang Lal (supra),
the Supreme Court has also observed that in a
given circumstance a document can be exhibited
with the endorsement made by the learned trial
Judge "objected, allowed subject to objection",
clearly indicating that the objection has not been
judicially determined and the document was
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tentatively marked. This procedure is to be
followed only in exceptional circumstances.
Ordinarily, the objection to the admissibility of the
document should be decided as and when raised
without reserving the question as to admissibility
of the document until final judgment in the case.
We may make it clear that omission to object to a
document, which in itself is inadmissible in
evidence, would not constitute such document in
evidence.
74. It is also duty of the Court to exclude all
irrelevant evidence even if no objection is taken
to its admissibility by the parties. The question of
relevancy of the document being a question of
law can be raised and decided at any stage of the
proceeding."
16. Following the declaration of law referred to
above, I am of the opinion that, though the Joint
Development Agreement and Exchange Agreement,
were marked despite being unregistered and not duly
stamped, do not confer any right or interest to the
parties in those documents.
17. Nextly, it is relevant to mention the Judgment of
the Hon'ble Supreme Court in the case of K.B. Saha
and Sons Private Limited vs. Development
Consultant Limited reported in (2008) 8 SCC
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564, wherein, at paragraphs 23, 24, 26, 33 and 34
held as follows:
"23. Another section which would also be
material for us to decide this appeal is Section 49
of the Registration Act which runs as under:
"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 (1 of 1877) or as evidence of
any collateral transaction not required to be
effected by registered instrument."
24. Having heard the learned counsel for the
appellant and after going through the judgment of
the High Court as well as of the trial court, we do
not find any ground for which interference can be
made with the judgment of the High Court.
***
26. The High Court in the impugned judgment
has come to a conclusion that the decision
in Juthika Mulick case [(1995) 1 SCC 560 : AIR
1995 SC 1142] cannot be of any benefit to the
appellant on the ground that in Juthika Mulick
case [(1995) 1 SCC 560 : AIR 1995 SC 1142] the
respondent had leased out the premises in
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question in favour of the lessee under a registered
deed of sale whereas in the instant case, the
lease deed was not registered. The High Court
has observed that the lease agreement between
the parties was in effect an agreement for lease of
the suit premises and was unregistered. Relying
on Section 49 of the Registration Act, the High
Court observed that a document purporting to be
a lease and required to be registered under
Section 107 of the Transfer of Property Act is not
admissible in evidence if it is not registered.
Proviso to Section 49, however, provides that
although a lease deed falling under the provision
of Section 107 of the Transfer of Property Act will
not be admissible in evidence if the same is not
registered but that deed may be used as evidence
of any collateral transaction not required to be
effected by a registered instrument. Therefore,
the High Court observed that the question to be
decided in this appeal is whether the conditions
noted in the lease deed could be looked into for
determining the question that the tenancy in
question would be used only for the purpose of
occupation of the named officer of the
respondent.
***
33. In Rana Vidya Bhushan
Singh v. Ratiram [(1969) 1 UJ 86 (SC)] the
following has been laid down:
"A document required by law to be
registered, if unregistered, is inadmissible as
evidence of a transaction affecting immovable
property, but it may be admitted as evidence
of collateral facts, or for any collateral
purpose, that is for any purpose other than
that of creating, declaring, assigning, limiting
or extinguishing a right to immovable
property. As stated by Mulla in his Indian
Registration Act, 7th Edn., at p. 189:
q'The High Courts of Calcutta, Bombay,
Allahabad, Madras, Patna, Lahore, Assam,
Nagpur, Pepsu, Rajasthan, Orissa, Rangoon
and Jammu & Kashmir; the former Chief Court
of Oudh; the Judicial Commissioner's Court of
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Peshawar, Ajmer and Himachal Pradesh and
the Supreme Court have held that a document
which requires registration under Section 17
and which is not admissible for want of
registration to prove a gift or mortgage or sale
or lease is nevertheless admissible to prove
the character of the possession of the person
who holds under it.' "
34 [Ed.: Para 34 corrected vide Official
Corrigendum No. F.3/Ed.B.J./76/2008 dated 15-
9-2008.] . From the principles laid down in the
various decisions of this Court and the High
Courts, as referred to hereinabove, it is evident
that:
1. A document required to be registered, if
unregistered is not admissible into evidence
under Section 49 of the Registration Act.
2. Such unregistered document can
however be used as an evidence of collateral
purpose as provided in the proviso to Section
49 of the Registration Act.
3. A collateral transaction must be
independent of, or divisible from, the
transaction to effect which the law required
registration.
4. A collateral transaction must be a
transaction not itself required to be effected by
a registered document, that is, a transaction
creating, etc. any right, title or interest in
immovable property of the value of one
hundred rupees and upwards.
5. If a document is inadmissible in evidence
for want of registration, 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."
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18. The Hon'ble Supreme Court in the case of
Korukonda Chalapathi (supra) at paragraphs 26,
27 and 31 held as follows:
"26. Section 49(c) of the Registration Act
prohibits the admitting of compulsorily registrable
documents which are unregistered as evidence of
any transaction affecting immovable property
unless it has been registered. In the very same
judgment, we notice the following discussion :
(Murdga Mudaliar case [Murdga Mudaliar v. Subba
Reddiar, 1950 SCC OnLine Mad 136 : AIR 1951
Mad 12] , SCC OnLine Mad)
"... The other consequence of non-
registration is to prohibit the document from
being received not "in" evidence, but "as"
evidence of any transaction affecting such
property. The emphasis on the word "as" was,
in my opinion, rightly laid by Venkatasubba
Rao, J. in Atluru Saraswatamma v. Atluru
Paddayya [Atluru Saraswatamma v. Atluru
Paddayya, 1922 SCC OnLine Mad 203 : ILR
(1923) 46 Mad 349 : AIR 1923 Mad 297] ,
where the learned Judge observed : (SCC
OnLine Mad)
'What is prohibited by the section is
receiving a document as evidence of a
transaction, not merely receiving it in evidence
that is, as a piece of evidence having a bearing
on the question to be ultimately decided.'
In other words, the prohibition is to prevent
a person from establishing, by the use of the
document in evidence a "transaction, affecting
immovable property". A person should not be
permitted to establish indirectly by use of the
document what he is prevented from doing
directly under Clause (a)."
(emphasis in original and supplied)
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27. The proviso carves out two exceptions. We
are only concerned, in this case, with only one of
them and that is contained in the last limb of the
proviso. The unregistered document can be used
as evidence of any collateral transaction. This is,
however, subject to the condition that the said
collateral transaction should not itself be one
which must be effected by a registered document.
It is this expression contained in the proviso
which leads us to ask the question as to what
would constitute a collateral transaction. If it were
collateral transaction, then an unregistered
document can indeed be used as evidence to
prove the same. Would possession being enjoyed
or the nature of the possession on the basis of the
unregistered document, be a transaction and
further would it be a collateral transaction? We
pose this question as the contention of the
appellants is that even if the Khararunama dated
15-4-1986 cannot be used as evidence to prove
the factum of relinquishment of right which took
place in the past, the Khararunama can be looked
into to prove the conduct of the parties and the
nature of the possession which was enjoyed by
the parties.
***
31. This is significant for the reason that the
law is not that in every case where a party sets
up the plea that the court may look into an
unregistered documents to show the nature of the
possession that the court would agree to it. The
cardinal principle would be whether by allowing
the case of the party to consider an unregistered
document it would result in the breach of the
mandate of the Section 49 of the Registration
Act."
19. In the light of the aforementioned declaration of
law made by the Hon'ble Supreme Court, since the
Joint Development Agreement dated 30.06.1997
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(Ex.P2) and Exchange Agreement dated 22.03.2001
(Ex.R2), which are compulsorily requires registration
and duly stamped before admitting in evidence at the
time of marking and in the absence of such procedure
at the time of marking of these two unregistered
documents, I am of the view that, these two
documents cannot be considered as to be Deed of
Conveyance under the provisions of the Transfer of
Property Act. It is well settled principle in law that if a
statutory provision prescribes a particular procedure
to be followed by the authority or the Courts to do an
act, it should be done in that particular manner only.
This aspect of the matter was considered by the
Hon'ble Supreme Court in the case of Mackinnon
Mackenzie and Company Limited vs. Mackinnon
Employees Union reported in (2015) 4 SCC 544.
In that view of the matter, since these two alleged
documents were marked in the absence of the
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objection at the time of marking during evidence and
such documents are held to be void ab intio as there is
no conveyance of the property between the parties to
the agreement/contract. Though the learned Official
Liquidator referred to the Judgment of the Hon'ble
Supreme Court in the case of Bhagwat Sharan (D)
through LR's vs. Purushottam and Others
reported in (2020) 6 SCC 387 and argued that the
doctrine of election is a facet of law of estoppel and
the applicants in CA No.326 of 2021 having acted
upon as per Exchange Agreement, can not be
permitted to blow hot and cold simultaneously, to
seek quashing of the said document and the said
submission cannot be accepted on the sole ground
that these two documents are void and do not confer
any legal right on the parties on account of non-
registration and insufficiently stamped. In that view
of the matter, I find force in the submission made by
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the learned Senior Counsel appearing for the
applicants in CA No.326 of 2021 as no estoppel could
operate against a Statute and if any act is contrary to
law as well as any provision in a Statute and such acts
are unenforceable in law and there is no promissory
estoppel against such inadmissible documents. (See.
(2012) 11 SCC 1). Therefore, I am of the opinion that
the applicants in CA No.326 of 2021 have made out a
case for interference to direct the Company in
liquidation to return the original title deeds to the legal
representatives of deceased P.M. Channabasavanna
and Smt. H.N. Saroja. In this regard, the arguments
advanced by learned Official Liquidator based on the
Joint Development Agreement dated 30.06.1997 and
Exchange Agreement dated 22.03.2001, cannot be
accepted as those documents do not confer legal
rights to the parties to the contract. Be that as it
may, if the arguments advanced by the learned
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Official Liquidator is accepted, nothing is produced
before this Court as to the cancellation of deeds in
question as required under Section 31 of the Specific
Relief Act and such efforts made by the Company in
liquidation as well as learned Official Liquidator. In
that view of the matter, on assessing the entire case
of the parties, based on the dictum of the Hon'ble
Supreme Court referred to above, the application in
CA No.326 of 2021 has to be accepted by dismissing
CA No.419 of 2022 filed by the Official Liquidator.
20. In the result, I pass the following:
ORDER
i) The application in CA 326 of 2021 filed by
the applicants is allowed.
ii) The respondent - Official Liquidator is
directed to handover the original title deeds of
the schedule property bearing No.2997,
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Temple Road, Vanivilasa Mohalla, Mysuru, to
an extent of 13630 Sq.Ft. to the applicants in
CA No.326 of 2021 within four weeks from the
receipt of certified copy of this order.
iii) The application in CA No.419 of 2022 filed
by the Official Liquidator is hereby dismissed.
SD/-
(E.S.INDIRESH)
JUDGE
SB
