Telangana High Court

M Ravinder Reddy vs Seri Balreddy on 3 January, 2025

Author: G.Radha Rani

Bench: G.Radha Rani

      THE HONOURABLE Dr.JUSTICE G.RADHA RANI

           CIVIL REVISION PETITION No.3380 of 2024


ORDER:

This Civil Revision Petition is filed by the petitioner / plaintiff aggrieved

by the order dated 09.08.2024 passed in I.A.No.458 of 2024 in O.S.No.113 of

2018 by the learned Principal District & Sessions Judge, Sangareddy for

demarking the document marked as Ex.A15.

2. The brief facts of the case that led to filing of the CRP are that the

plaintiff filed a suit for specific performance of agreement of sale - cum -

development agreement dated 01.03.2015. As per the averments in the suit, he

was a builder having experience in land development and construction and with

an interest to develop the suit schedule property by constructing residential

villas, he approached defendants 1 and 2, who were brothers, owners and

possessors of the land in Survey Nos.120/EE and 122/AA and in Survey

No.120/A2 and 122/A2 respectively to an extent of Ac.3-03 guntas each

situated at Velmela Village, Ramachandrapuram Mandal, Sangareddy District.

3. The defendants 1 and 2 initially agreed to sell one (01) acre each and to

give the remaining land for development to the plaintiff. But subsequently, the

defendant No.1 changed his mind to sell one acre of land and gave his entire

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extent of Ac.3-03 guntas for development. The defendant No.2 agreed to sell

one acre and gave the remaining land for development. Thus, the defendant

No.2 executed an agreement for sale of one acre and development agreement for

the remaining extent. At the time of entering into the agreement, the defendants

1 and 2 informed the plaintiff that there was a suit pending in respect of the suit

schedule property and stated that after clearing the pending suit, they would

execute the registered development agreement - cum - General Power of

Attorney (for short "GPA") and also the sale deed in favor of the plaintiff. The

defendants 1 and 2 delivered physical possession of the suit schedule property

to the plaintiff. He also started the development activities by levelling the land

by investing huge amounts. Subsequently, some persons objected the ongoing

work stating that the suit land belonged to them. The plaintiff came to know

that the defendants 1 and 2 cleared the pending cases, but were trying to alienate

the suit property to defendants 3 to 7. When the plaintiff demanded the

defendants for execution of registered development agreement and sale deed,

the defendants dodged the matte. As such, the plaintiff got issued the legal

notice and filed the suit.

4. The defendants also filed written statement and the matter was

proceeding for trial.

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5. During the course of trial, the plaintiff filed his evidence affidavit and

filed Exs.A1 to A14. The defendants 1 and 2 as well as defendants 3 to 7 raised

objection for marking the proposed exhibits A1 and A2 titled as development

agreements contending that they were compulsorily registerable documents and

could not be admitted in evidence without registration under Section 17 of the

Registration Act, 1908.

6. The trial court i.e. the learned Principal District & Sessions Judge,

Sangareddy passed a detailed order in the evidence of PW.1 itself observing that

Ex.A1 would create rights in favor of the plaintiff as well as defendant No.1 in

the constructions to be made. The language was categorical and the rights and

liability of the parties were defined. It was a final development agreement itself

between the parties and would not envisage entering into a future agreement at a

later point of time as contended by the plaintiff and observed that the proposed

exhibits A1 and A2 were compulsorily registerable documents and that they

could not be admitted into evidence. But, however, considering that Ex.A2 also

contains the agreement to sell one acre of land to the plaintiff, held that the said

part of the contract could be severed from the remaining contract and Ex.A2

could be marked only to the extent of the terms relating to the contract of sale,

as per the judgment of the Hon'ble Apex Court in K.B.Saha and sons private

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limited v. Development Consultant Limited 1, as per the proviso to Section 49 of

the Registration Act, 1908 for collateral purpose.

7. The learned Principal District & Sessions Judge further observed that

since A1 and A2 were tendered in evidence, they had to be impounded in terms

of Section 33 of the Indian Stamp Act, 1899 and directed the office to forward

the proposed exhibits A1 and A2 to the District Registrar for assessment and

collection of stamp duty and penalty. However, he gave a clear finding that

Ex.A1 was inadmissible in evidence and Ex.A2 was partly admissible.

Thereafter, the said documents were sent by the District Registrar to the Court

directly after collecting necessary stamp duty and penalty.

8. Meanwhile, there is a transfer of judicial officers and a new officer was

posted. The said documents were marked as Exs.A15 and A16 by the Court

without observing the earlier orders. Subsequently, the defendant No.1 filed

I.A.No.458 of 2024 for demarking Exs.A15 and A16 stating that on 13.02.2024,

all of a sudden PW.1 (plaintiff) produced the above said documents, which were

sent for impounding without serving any copy of the impounded documents on

him by concealing the order passed by the Court with regard to the admissibility

of the documents as per law and prayed to reject the said documents marked as

Exs.A15 and A16.

(2008) 8 SCC 564

Dr.GRR, J crp_3380_2024

9. The plaintiff filed counter to the said application stating that at no point

of time the Court declared that the document sought to be marked as Ex.A1 was

inadmissible and Ex.A2 as partly admissible. The Court had not made any

endorsement on the documents as rejected as inadmissible as contemplated

under Order XIII Rule 6 of CPC. After hearing both sides and after detailed

inspection of the documents, the Court categorically decided to send Exs.A1

and A2 to the Office of the District Registrar for the purpose of impounding and

collection of deficit stamp duty and penalty before admitting the proposed

documents as evidence. The Court addressed reminder letters to the District

Registrar Office for return of the said documents vide docket order dated

13.09.2023 and 30.10.2023 respectively. The Office of the District Registrar,

Sangareddy, after assessment, collected the deficit stamp duty and penalty vide

proceeding No.1313 of 2023, returned the Exs.A1 and A2 documents directly to

the Court vide letter dated 28.10.2023. On receiving the said documents, the

Court passed a conditional order on 22.01.2024. As a last chance for marking

the documents, the case was posted to 13.02.2024. On the said conditional

order, he appeared before the Court and the said documents were marked as

Exs.A15 and A16 in the presence of the counsel for defendants 1 and 2 and

defendants 3 to 7 and none of the counsel objected for marking the said

documents. He had not produced any new documents for marking, which

would require service of notice. The inadequacy of stamps was a curable defect

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and the Stamp Act provides a procedure to rectify the defect and the said defect

was rectified by following due process of law and thereafter only the documents

were marked as Exs.A15 and A16 and they could not be rejected under any

circumstances.

10. The trial court on considering the contentions of both the learned counsel

passed the impugned order observing that the order passed by the Court would

clearly reveal that the proposed Ex.A1 (marked as Ex.A15) was inadmissible

and proposed Ex.A2 (marked as Ex.A16) could be admitted into evidence to

some extent for the purpose of proving the existence of the contract for sale of

immovable property. The docket also would not disclose that the counsel for

the defendants were also present at the time of marking, as such demarked the

document marked as Ex.A15 and as the Court already held that Ex.A16 was

partly admissible, dismissed the petition in respect of Ex.A16 for demarking the

same.

11 Heard Sri Ajith Sharma, learned counsel for the petitioner - plaintiff and

Sri Naresh Reddy Chinnolla, learned counsel for respondent No.1 and

Sri I. Ramesh, learned counsel for respondent No.3.

12. Learned counsel for the petitioner submitted that as per Order XIII Rule 6

of CPC, an endorsement was required to be made by the Judge rejecting the

document as inadmissible. But no such endorsement was made by the

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concerned Court. The collection of deficit stamp duty and penalty was a

curable defect and the same was cured by impounding the same. After

rectification, the documents could be taken into evidence. The Court at no point

of time had declared the documents tendered in evidence as inadmissible, if so,

the same would not have been sent for the purpose of impounding. The Court

failed to interpret that not only the agreement of sale, but all other documents

are also contracts, which could be admitted as evidence in a suit for specific

performance and relied upon the judgments of the Hon'ble Apex Court in

R.Hemalatha v. Kashthuri 2 and S.Kaladevi v. V.R.Somasundaram 3.

13. Learned counsel for the respondent No.1 on the other hand contended that

the petitioner approached the Court with unclean hands by misrepresenting the

facts. The trial court while passing an order on 16.03.2023 categorically held

that Ex.A1 was inadmissible, but since it was produced before the Court, which

had to be impounded, accordingly, directed it to be sent to the District Registrar

for assessment of stamp duty and collection of penalty. Even after collection of

stamp duty and penalty, Ex.A1 being inadmissible could not be marked, but the

petitioner in the absence of the counsel for defendants by misrepresenting to the

Court that Exs.A1 and A2 were sent for impounding, got marked the same. The

trial court believing the version of the petitioner's counsel marked the same as

Exs.A15 and A16. The earlier orders passed by the trial court were suppressed

2023 (10) SCC 725

2010 (5) SCC 401

Dr.GRR, J crp_3380_2024

by the petitioner while marking the said documents. The petitioner without

serving a copy of the impounded document, misled the Court and got it marked,

which would show his misconduct before the Court. The docket order dated

13.02.2024 would clearly show that the counsel for the defendants was not

present when Exs.A15 and A16 were marked. It was the bounden duty of the

counsel for the petitioner to bring to the notice of the trial court about the earlier

orders passed on 16.03.2023 holding that Ex.A1 was inadmissible. The finding

of the trial court that Ex.A1 was inadmissible was not challenged by the

petitioner. The trial court on considering all the aspects passed the impugned

order rejecting the marking of Ex.A15. The same was just proper and legal and

prayed to dismiss the Civil Revision Petition.

14. Learned counsel for respondent No.3 also adopted the arguments of the

learned counsel for respondent No.1.

15. Now the point for consideration in this CRP is: Whether the order passed

by the trial court demarking Ex.A15 suffers from any legal infirmity and

whether the same is liable to be set aside?

16. On a perusal of the record, it would disclose that when Exs.A1 and A2

are tendered in evidence by the plaintiff, a detailed order was passed by the trial

court on 16.03.2023 by considering all the clauses in the development

agreement observing that the development agreement would create rights in

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favor of the plaintiff as well as the defendant No.1 with regard to construction

of villas on the schedule property, wherein the rights and liabilities of the parties

were defined and the said agreement would govern the relationship between the

parties and the terms of development of the schedule property and their rights in

the development and opined that they were compulsorily registerable

documents. But, however, considering the judgment of the Hon'ble Apex Court

in K.B.Saha and sons private limited v. Development Consultant Limited

(cited supra), wherein it was held that an unregistered document could be used

as evidence for collateral purpose under Proviso to Section 49 of the

Registration Act, 1908 and if the collateral transaction was independent of, or

divisible from, the transaction to the effect which the law required registration,

the same could be admitted in evidence, held that Ex.A2 was partly admissible.

The trial court categorically held that Ex.A1 was inadmissible and Ex.A2 was

partly admissible. However, for the purpose of receiving stamp duty and

penalty, directed the office to send both the documents to the District Registrar

for assessment and collection of stamp duty and penalty.

17. The said order was not challenged by the petitioner - plaintiff. Both the

documents were sent to the District Registrar for collection of stamp duty.

After receiving the same on 13.02.2024, the same were marked as Exs.A15 and

A16 without observing the earlier order passed by the Court on 16.03.2023.

The impugned order of the learned Principal District & Sessions Judge,

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Sangareddy also would disclose that the defendants were not present at the time

of marking the documents and the docket order dated 13.02.2024 also would not

disclose their presence. The counsel for the plaintiff could not take advantage

of the absence of the defendant on the said date and without appraising the

Court about its earlier orders passed on 16.03.2023, getting them marked shows

the mischief played by the counsel for the petitioner before the trial court.

18. The contention of the learned counsel for the petitioner that there was no

endorsement made on the document as "rejected as inadmissible" as required

under Order XIII Rule 6 of CPC and that they would not have sent the proposed

Exs.A1 and A2 for the purpose of impounding, when the same were considered

as inadmissible does not hold any merit, as the same was also answered by the

trial court in its order passed on 16.03.2023 itself. The trial court stated that

since the documents were tendered in evidence, they had to be impounded in

terms of Section 33 of the Indian Stamp Act, 1899 for receiving the stamp duty

and penalty and categorically mentioned that since proposed Ex.A1 was

inadmissible, it would be impounded and sent to the District Registrar for

assessment of stamp duty in terms of Section 38(2) of Indian Stamp Act, 1899.

It also specified that for receiving proposed Ex.A2 into evidence, stamp duty

and penalty had to be paid. As such, on the representation made by the counsel

for the plaintiff only, sent the proposed Ex.A2 to the District Registrar for

assessment and collection of stamp duty and penalty.

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19. As a general rule, the objections with regard to the admissibility of a

document have to be raised at the time of marking and once the document is

marked as exhibit in the Court, it cannot be demarked. But, in the present case,

objections were taken by the defendants at the time of tendering Exs.A1 and A2

into evidence and the said objections were considered by the trial court and held

Ex.A1 (Ex.A15) as inadmissible and Ex.A2 (Ex.A16) as partly admissible.

Learned counsel for the petitioner relied upon the judgment of the Hon'ble

Apex Court in R.Hemalatha v. Kasthuri (cited supra), wherein it was held

that:

"10. Thus, as per proviso to Section 49, an unregistered document affecting the immovable property and required by Registration Act to be registered may be received as evidence of a contract in a suit for specific performance under Chapter-II of the Specific Relief Act, 1877, or as evidence of any collateral transaction not required to be effected by registered document.

12. At this stage, it is required to be noted that the proviso to Section 49 came to be inserted vide Act No.21 of 1929 and thereafter, Section 17(1A) came to be inserted by Act No. 48 of 2001 with effect from 24.09.2001 by which the documents containing contracts to transfer or consideration any immovable property for the purpose of Section 53 of the Transfer of Properties Act is made compulsorily to be registered if they have been executed on or after 2001 and if such documents are not registered on or after such commencement, then there shall have no effect for the purposes of said Section 53A. So, the exception to the proviso to Section 49 is provided under Section 17(1A) of the Registration Act. Otherwise, the proviso to Section 49 with respect to the documents other than referred to in Section 17(1A) shall be applicable.

13. Under the circumstances, as per proviso to Section 49 of the Registration Act, an unregistered document affecting immovable property and required by Registration Act or the Transfer of Property Act to be registered, may be received

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as evidence of a contract in a suit for specific performance under Chapter-II of the Specific Relief Act, 1877, or as evidence of any collateral transaction not required to be effected by registered instrument, however, subject to Section 17(1A) of the Registration Act. It is not the case on behalf of either of the parties that the document/ Agreement to Sell in question would fall under the category of document as per Section 17(1A) of the Registration Act. Therefore, in the facts and circumstances of the case, the High Court has rightly observed and held relying upon proviso to Section 49 of the Registration Act that the unregistered document in question namely unregistered Agreement to Sell in question shall be admissible in evidence in a suit for specific performance and the proviso is exception to the first part of Section 49."

Thus, the Hon'ble Apex Court held that the agreement of sale would be

admissible as evidence in a suit for specific performance. The learned Principal

District Judge, accepting the said proposition laid down by the Hon'ble Apex

Court held Ex.A16 as partly admissible. These observations with regard to the

admissibility of Exs.A1 and A2 (Exs.A15 and A16) are not challenged by the

plaintiff and they became final.

20. In the affidavit filed in I.A.No.458 of 2024, the petitioner (plaintiff)

specifically stated that at no point of time, the Court held or declared that the

document had to be marked as Ex.A1 was inadmissible and Ex.A2 was only

partly admissible, which is false. He also stated that while marking Exs.A1 and

A2 as Exs.A15 and A16 on 13.02.2024, the counsel for defendants 1 and 2 and

defendants 3 to 7 were also present and not objected for marking the said