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Sunday, October 11, 2015

Un Registered Relinquishment Deed - Effects = It is well settled that the nomenclature given to the document is not decisive factor but the nature and substance of the transaction has to be determined with reference to the terms of the documents and that the admissibility of a document is entirely dependent upon the recitals contained in that document but not on the basis of the pleadings set up by the party who seeks to introduce the document in question. A thorough reading of both Exhibits B-21 and B-22 makes it very clear that there is relinquishment of right in respect of immovable property through a document which is compulsorily registerable document and if the same is not registered, becomes an inadmissible document as envisaged under Section 49 of the Registration Act. Hence, Exhibits B-21 and B-22 are the documents which squarely fall within the ambit of section 17 (i) (b) of the Registration Act and hence are compulsorily registerable documents and the same are inadmissible in evidence for the purpose of proving the factum of partition between the parties. We are of the considered opinion that Exhibits B 21 and B22 are not admissible in evidence for the purpose of proving primary purpose of partition. whether these can be used for any collateral purpose. The larger Bench of Andhra Pradesh High Court in Chinnappa Reddy Gari Muthyala Reddy Vs. Chinnappa Reddy Gari Vankat Reddy , AIR 1969 A.P. (242) has held that the whole process of partition contemplates three phases i.e. severancy of status, division of joint property by metes and bounds and nature of possession of various shares. In a suit for partition, an unregistered document can be relied upon for collateral purpose i.e. severancy of title, nature of possession of various shares but not for the primary purpose i.e. division of joint properties by metes and bounds. An unstamped instrument is not admissible in evidence even for collateral purpose, until the same is impounded. Hence, if the appellants/defendants want to mark these documents for collateral purpose it is open for them to pay the stamp duty together with penalty and get the document impounded and the Trial Court is at liberty to mark Exhibits B-21 and B- 22 for collateral purpose subject to proof and relevance. 19. Accordingly, Civil Appeal is partly allowed holding that Exhibits B-21 and B-22 are admissible in evidence for collateral purpose subject to payment of stamp duty, penalty, proof and relevancy.

REPORTABLE



                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION



                CIVIL APPEAL NO.   8441              OF 2015
                               ARISING OUT OF
             SPECIAL LEAVE PETITION (CIVIL) NO.  12788   OF 2014


      YELLAPU UMA MAHESWARI & ANR.             ...APPELLANTS
                                   VERSUS
      BUDDHA JAGADHEESWARARAO & ORS.  ...RESPONDENTS


                               J U D G M E N T
N.V. RAMANA, J.
      Leave granted.

2.    This Appeal has been preferred aggrieved by the orders passed  by  the
High Court of Judicature of Andhra Pradesh in CRP  No.  3419  of  2013,  dt.
27/12/2013 wherein and whereby the learned Judge has dismissed the  Revision
Petition preferred by the Appellants/Defendant Nos. 1 & 2 by confirming  the
orders passed in O. S No.  10  of  2004,  dt.  08/07/2013  on  the  file  of
Principal Senior Civil Judge, Anakapalle.

3.    The brief facts which  are  necessary  for  adjudicating  the  dispute
involved in the present appeal, in nutshell, are as follows.

4.    The 1st respondent/plaintiff filed O.S No. 10 of 2004 on the  file  of
Senior Civil Judge Court, Anakapalle against the appellants and  others  for
the relief of partition claiming ¼th  share in Item No. 1, ½ share  in  Item
No. 2 of the suit schedule properties.

5.    It is the  specific  case  of  the1st  respondent/plaintiff  that  one
Jaggayya, who is the foster father of the plaintiff,  had  acquired  certain
properties  during  his  life  time  and  executed  a  Registered  Will  dt.
22/05/1964 in a sound and disposing state of mind bequeathing his  immovable
properties   in    favour    of    the    plaintiff/respondent    and    1st
defendant/appellant No.1 by  giving  life  estate  in  favour  of  his  wife
Mahalakshmamma, and the said Mahalakshmamma  died  on  20/05/2001,  as  such
plaintiff/respondent No.1 and the  defendant  Nos.1  &  2/appellants  became
entitled to the plaint Schedule properties in equal shares. On  his  demand,
when the defendants failed to partition the properties  by  giving  him  his
legitimate right, he has approached the Court by filling the above suit.

6.    The appellants herein (Defendant Nos.1 & 2)   resisting  the  plea  of
the plaintiff/respondent No.1 filed the  written  statement  that  appellant
No.   1   being   the   sister’s   daughter   of   Mahalakshamma   and   the
plaintiff/respondent No. 1 who is the sister’s son  of  late  Jaggayya  were
treated as foster son and daughter as Jaggayya had no issues.  In  the  year
1969   properties   were    partitioned    between    the    parties.    The
plaintiff/respondent No. 1, in spite of having his share in the  properties,
taking advantage of appellant No.1’s innocence and helplessness,  has  taken
other properties which are not allotted to  him,  having  no  other  go  she
(appellant No.1) kept quiet. According to the  defendants/appellants,  after
the  partition  they  have  been  enjoying  the  properties  fell  to  their
respective  shares.  It  is   their   further   case   that   on   05-6-1975
plaintiff/respondent No.1  and  the  first  defendant/appellant  No.  1  got
executed  the  Deed  of  Memorandum   of   earlier   partition.   Both   the
plaintiff/respondent No.1 and the 1st defendant/appellant  No.1  were  given
pattadar passbooks and title deeds in respect of properties  fell  to  their
share and in fact, the plaintiff/respondent No.1 has alienated some  of  his
properties. Mahalakshsamma in a sound and disposing state of  mind  executed
a Registered Will dated 27/03/1999 bequeathing all the properties in  favour
of 1st defendant/appellant No.1.  Further, Mahalkshamma has given  away  her
life  estate  in  favour  of   appellant   No.1/defendant   No.1   and   the
plaintiff/respondent No.1.  Hence, it is pleaded  that  as  properties  were
already partitioned in the year 1969, the  question  of  again  partitioning
the properties does not arise and sought for dismissal of the Suit.
7.     The  appellant  No.1/defendant  No.1  filed  her  chief   examination
affidavit and sought to mark Exhibits B1 to  B  48.The  plaintiff/respondent
No.1 raised objection with regard to admissibility of Exhibits B-21  and  B-
22. Exhibit B-21, dated 05/06/1975 according to the  defendant/appellant  is
Deed  of  Memorandum  witnessing  earlier  partition  effected  between  the
plaintiff/respondent No.1 and the defendant  No.1/appellant  No.1.   Exhibit
B-22 is the Agreement dated 04/06/1975 entered between Late  Mahalakshammma,
plaintiff/respondent No.1  and the defendant  No.1/appellant No.1.
8.       The  plaintiff/respondent  No.1  took  objection  with  regard   to
admissibility of   Exhibits B-21 and B-22 on the ground that whole  contents
referred to in the Memorandum dated  05/6/1975  discloses  that  the  second
party  thereto  relinquished  her  right   through   the   said   documents.
Therefore, the Agreement dated 04/06/1975 and  Memorandum  dated  05/06/1975
have to be construed as relinquishment deeds.  A relinquishment  deed  which
is compulsorily registerable document under Sec 17 (b) of  the  Registration
Act, 1908  and  hence,  the  unregistered  document  is  not  admissible  in
evidence.  The plea of the defendants is  that  the  recitals  of  the  said
document discloses past transaction with reference to division  of  property
and further it discloses the intention  of  the  parties  to  enter  into  a
separate agreement for sharing the properties and  that  the  terms  therein
have to be implemented in future.
9.    Both the Trial Court and the High Court upheld  the  objection  raised
by the plaintiff/respondent No.1 and came to a conclusion that two  recitals
i.e. Exhibit B21 and Exhibit B22 are not evidencing  the  past  transaction,
but  they  prima  facie  disclose  the  partition  of   the   property   and
relinquishment of rights by one of the parties.   As  such,  both  documents
require stamp duty under the Indian Stamp Act, 1899 and  registration  under
the Registration Act, 1908. As Exhibits B21 and  B22  are  unregistered  and
unstamped documents, they are not admissible in evidence.  The  Trial  Court
gave a specific finding that even both the exhibits are not  admissible  for
collateral purpose also. Aggrieved by that, the present appeal is filed.

10.       We   have   heard   the   learned   senior   counsel    for    the
appellants/defendant  Nos.1&   2   and   the   learned   counsel   for   the
respondents/plaintiff.

11.     It is urged by the learned senior counsel Mr.  V.  V.  S.  Rao  that
Exhibits B21 and B22 are  admissible  in  evidence  as  both  the  documents
evidence the past transaction which does not require  any  registration  and
both the Courts below erred in coming to a conclusion that Exts B21 and  B22
require registration ignoring the true nature of the documents. It is  urged
that the amendment that is brought to the Registration Act in 1986,  whereby
even  the  past  transaction  becomes  registerable  and  the  same  is  not
applicable to Exhibits B21 and B22. It  is  further  urged  by  the  learned
senior counsel  that  even  assuming  that  Exhibits  B21  and  B22  require
registration, still the unregistered documents are  admissible  in  evidence
for collateral purpose.

12.    The  learned  counsel  Mr.  G.V.R.  Choudary,   appearing   for   the
respondents, on the other hand, has submitted that  the  Courts  below  were
perfectly right in coming to a conclusion that  Exhibits  B21  and  B22  are
compulsorily registerable documents and prayed for dismissal of the Suit.

13.   Now the issue that falls for consideration is:

Whether the Courts below were right in holding that  Exhibits  B21  and  B22
are not  admissible  in  evidence  as  they  are  compulsorily  registerable
documents?

Whether Exhibits B-21 and 22  are  admissible  in  evidence  for  collateral
purpose?

14.   Before we go in to the merits of the matter, we  deem  it  appropriate
to extract the relevant provisions of the Registration Act, 1908.

 Sec. 17 of the Registration Act, 1908

Documents of which  registration  is  compulsory.—       (l)  The  following
documents shall be registered, if the  property  to  which  they  relate  is
situate in a district in which, and if they have been executed on  or  after
the date on which, Act No. XVI of 1864, or the Registration  Act,  1866,  or
the Registration Act, 1871, or the Registration Act, 1877, or this Act  came
or comes into force, namely:—

(a)    Instruments of gift of immovable property;

(b)    other  non-testamentary  instruments  which  purport  or  operate  to
create, declare, assign, limit or  extinguish,  whether  in  present  or  in
future, any right, title or interest, whether vested or contingent,  of  the
value of one hundred rupees and upwards, to or in immovable property;

(c)  non-testamentary instruments which acknowledge the receipt  or  payment
of any consideration on account of the  creation,  declaration,  assignment,
limitation or extinction of any such right, title or interest; and

(d)   leases of immovable property;

(e)  non-testamentary instruments transferring or assigning  any  decree  or
order of a Court or any award when such decree or order  or  award  purports
or operates to create, declare, assign,  limit  or  extinguish,  whether  in
present or in future, any  right,  title  or  interest,  whether  vested  or
contingent, of the value of  one  hundred  rupees  and  upwards,  to  or  in
immovable property:

(f)   any decree or order or award or a  copy  thereof  passed  by  a  Civil
Court on consent of the defendants or on circumstantial evidence but not  on
the basis of any instrument which is admissible in  evidence  under  section
35 of the Indian Stamp Act, 1899 (2 of 1899), such as registered title  deed
produced by the plaintiff, where such decree or order or award  purports  or
operate to create, declare, assign, limit, extinguish whether in present  or
in future any right, title or interest whether vested or contingent  of  the
value of one hundred rupees and upwards to or in immovable property; and

(g)   agreement of sale of immovable property of the value  of  one  hundred
rupee and upwards”,

Provided that the State Government may, by order published  in  the Official
Gazette, exempt from the operation of this sub-section  any  lease  executed
in any district, or part of a district, the terms granted by  which  do  not
exceed five years and the annual rents  reserved  by  which  do  not  exceed
fifty rupees.


Section 49 of the Registration Act,1908

Effect of non-registration of  documents  required  to  be  registered.—  No
document required by section 17 or by  any  provision  of  the  Transfer  of
Property Act, 1882 ( 4 of 1882), to be registered shall—

(a)   affect any immovable property comprised therein, or

(b)    confer any power to adopt; or

(c)   be received as evidence of any transaction affecting such property  or
conferring such power, unless it has been registered:

Provided that an unregistered  document  affecting  immovable  property  and
required by this Act or the Transfer of Property Act, 1882 (4 of  1882),  to
be registered may be received as evidence  of  a  contract  in  a  suit  for
specific performance under Chapter-II of the Specific Relief  Act,  1877  (3
of 1877) or as evidence of any collateral transaction  not  required  to  be
effected by registered instrument.

15.    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
Act imposes bar on the admissibility of an unregistered document  and  deals
with the documents that are required to be registered u/s 17 of the Act.

16.    Coming to the facts on  hand,  the  defendant  No.1  wanted  to  mark
Exhibits B21 and B22, according to her, these two  documents  are  Agreement
and a Memorandum which were unregistered and unstamped documents and do  not
require registration. We have seen Exhibits B21 and  B22  which  are  placed
before us. Exhibit B22, dated 04/06/1975 as per the recitals,  an  Agreement
between the plaintiff/respondent No.1,  defendant  No.1/appellant  No.1  and
late MahaLakshmamma. Clause 1 of the Agreement speaks  about  relinquishment
of rights of Mahalakshmamma in favour  of  plaintiff/respondent  No.  1  and
defendant No.1/appellant No. 1 and Clause 4 specifies that the  life  estate
of Mahalakshamama is devolved upon the  plaintiff/respondent  No.1  and  the
defendant No.1/appellant No.1 equally. It  is  further  specified  that  the
stock amount of Rs 50,000/- in the shop  was  given  to  Mahalakashamma  and
left over amount will  be  divided  between  plaintiff/respondent  No.1  and
defendant  No.1/appellant  No.1  and  further  it  was  agreed   upon   that
Mahalakahamma was entitled to reside in the house where  she  was  residing.
She was at liberty to reside in the house of the plaintiff/respondent No.  1
and the plaintiff/respondent No.1  and  the  defendant  No.1/appellant  No.1
shall not raise  any  dispute  over  this.   Coming  to  Exhibit  B21,  date
05/06/1975    which    is    an     agreement     between     Mahalakashmma,
plaintiff/respondent No.1  and  defendant  No.1/appellant  No.1  wherein  at
Clauses 4 to 6 the recitals pertain to relinquishment of shares between  the
parties to the agreement. It is stated in the Memorandum, Ext.  B  22,  that
each of them having partitioned the properties by good  and  bad  qualities,
have been enjoying the respective properties that fell to their  shares,  in
proof thereof,  the Deed of Memorandum is executed. Taking  us  through  the
recitals of these  two  documents,  the  learned  senior  counsel  tried  to
impress upon this  Court  particularly  through  the  last  few  lines  from
Exhibit B-21, that these documents are only evidencing the past  transaction
of partition that has taken place but through these documents no  rights  in
immovable property have accrued to the parties as envisaged  under  Sec.  17
of the Registration Act and which makes these documents out of  the  purview
of Section 49 of the Registration Act.

17.      It is well settled that the nomenclature given to the  document  is
not decisive factor but the nature and substance of the transaction  has  to
be determined with reference to the terms of  the  documents  and  that  the
admissibility  of  a  document  is  entirely  dependent  upon  the  recitals
contained in that document but not on the basis of the pleadings set  up  by
the party who seeks to introduce  the  document  in  question.   A  thorough
reading of both Exhibits B-21 and B-22 makes it very  clear  that  there  is
relinquishment of right in respect of immovable property through a  document
which  is  compulsorily  registerable  document  and  if  the  same  is  not
registered, becomes an inadmissible document as envisaged under  Section  49
of the Registration Act.  Hence, Exhibits B-21 and B-22  are  the  documents
which squarely  fall  within  the  ambit  of  section  17  (i)  (b)  of  the
Registration Act and hence are compulsorily registerable documents  and  the
same are inadmissible in evidence for the purpose of proving the  factum  of
partition between the  parties.  We  are  of  the  considered  opinion  that
Exhibits B 21 and B22 are not admissible in  evidence  for  the  purpose  of
proving primary purpose of partition.
18.     Then the next question  that  falls  for  consideration  is  whether
these can be used for any collateral purpose. The  larger  Bench  of  Andhra
Pradesh High Court in Chinnappa Reddy Gari  Muthyala  Reddy   Vs.  Chinnappa
Reddy Gari Vankat Reddy , AIR 1969  A.P. (242)  has  held  that  the   whole
process of partition contemplates three phases  i.e.  severancy  of  status,
division of joint property by metes and bounds and nature of  possession  of
various shares.  In a suit for partition, an unregistered  document  can  be
relied upon for collateral  purpose  i.e.  severancy  of  title,  nature  of
possession of various shares but not for the primary purpose  i.e.  division
of joint properties by metes and bounds.  An  unstamped  instrument  is  not
admissible in evidence even  for  collateral  purpose,  until  the  same  is
impounded. Hence, if the appellants/defendants want to mark these  documents
for collateral purpose it is open for them to pay the  stamp  duty  together
with penalty and get the document  impounded  and  the  Trial  Court  is  at
liberty to mark Exhibits B-21 and B- 22 for collateral  purpose  subject  to
proof and relevance.
19.    Accordingly, Civil Appeal is partly  allowed  holding  that  Exhibits
 B-21 and B-22 are admissible in evidence for collateral purpose subject  to
payment of stamp duty, penalty, proof and relevancy.

..................................J.
                                                              (RANJAN GOGOI)





……………................J.
                                                 (N.V. RAMANA)
New Delhi,
October 08, 2015

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