Korukonda Chalapathi Rao . vs Korukonda Annapurna Sampath … on 1 October, 2021


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Supreme Court of India

Korukonda Chalapathi Rao . vs Korukonda Annapurna Sampath … on 1 October, 2021

Author: K.M. Joseph

Bench: K.M. Joseph, Pamidighantam Sri Narasimha

                                                                      REPORTABLE

                                 IN THE SUPREME COURT OF INDIA

                                 CIVIL APPELLATE JURISDICTION

                                CIVIL APPEAL NO(S).6141 OF 2021
                          (Arising out of SLP(C) NO(S).25745 OF 2016)


          KORUKONDA CHALAPATHI RAO & ANR.                        ... APPELLANT(S)


                                                 VERSUS


          KORUKONDA ANNAPURNA
          SAMPATH KUMAR                                          ...RESPONDENT(S)


                                          J U D G M E N T

K.M. JOSEPH, J.

1. Leave granted.

2. By the impugned order the High Court has set aside

the order passed by the Trial Court by which latter

order, the Trial Court overruled the objections of the

respondent to the marking of Exhibits-B12 and B13 on

the score that they were documents which were
Signature Not Verified

unregistered and unstamped and matter was posted for
Digitally signed by
Nidhi Ahuja
Date: 2021.10.01
16:33:28 IST
Reason:

the evidence of DW1 for marking the said document. The

1
High court found that the documents which were the

unregistered family settlement “Khararunama” and

receipt of Rs. 2,00,000/- (Rupees two lakhs) by the

respondent, were not admissible in evidence.

3. The respondent is the younger brother of the

appellants. The respondent instituted the present Suit

(O.S. No.39 of 2001) seeking declaration of title over

the plaint schedule property and for eviction of the

appellants who are the defendants and consequential

perpetual injunction is also sought against the

appellants.

4. It is not in dispute that there was a partition

between the appellants, the respondent and their other

siblings. The partition list is marked as Exhbit-A8 in

the suit. It is dated 17.11.1980. The plaint schedule

properties are a part of F-Schedule in the Deed of

partition allotted to the respondent. The case of the

respondent is based on the said partition deed

allotting F-schedule to him. It is, inter alia, his

case in the suit as amended by order dated 19.12.2012

that he was in hospital as in patient for treatment of

2
his liver ailment. The appellants allegedly obtained

his signatures on papers and made up the alleged

settlement dated 15.4.1986 and the alleged receipt

dated 08.12.1983 (The documents which are in

controversy). It is his further case that appellants

are in occupation of the property with his permission.

On refusal of the appellants to vacate and after

exchange of notices, the suit is filed seeking the

relief as noted. There are two plaint schedule items.

Item No.1 is the terrace house, ground floor and

upstairs. Item no.2 is half share nadava portion in

the boundaries in terms of F-Schedule of the partition

deed.

5. On the other hand, the case of the appellants is

that while partition list dated 17.11.1980 was executed

recording the fact of partition, which was already

effected, there were subsequent developments. The

respondent and his wife raised dispute before elders

complaining that the portion given to them was not

sufficient. At the intervention of the elders, it was

settled and agreed between the appellants and the

respondent that respondent should give away his portion
3
to the second appellant and respondent should also give

away his one-third portion in Nadava margam to the

appellants and in consideration for the same the first

appellant was to give Rs.25,000/- and the second

appellant was to give Rs.75,000/- to the respondent.

The said amounts were paid. On the advice of the elders

the case of the appellants is that Khararunama dated

15.04.1986 was executed recording the facts. On the

pleading of respondent and his wife to permit them to

stay on, the respondent was permitted to occupy the

property. It is the further case of the appellants

that in December, 1993, respondent and his wife

informed the appellants that they would vacate the

portion in the second appellant’s house and leave the

same but defendants should pay some more money as they

intended to vacate the property. The elders settled

the matter and it is alleged that Second appellant had

to pay Rs.2,00,000/-. Out of affection towards the

respondent and to purchase peace, the second appellant

agreed to pay Rs.2,00,000/- (Rupees Two Lakhs).

Accordingly, Rs.2,00,000/- was paid on 08.12.1993 in

the presence of elders and the receipt dated 08.12.1993

4
was issued by the respondent to the second appellant

and on the same day, respondent is alleged to have

vacated and left the portion in his occupation in the

house of the second appellant and shifted to a rented

portion.

6. After completion of the evidence on behalf of the

respondent, appellants filed the evidence affidavit and

sought to mark the Kharurunama and receipt dated

08.12.1993. As already noticed, the trial court

allowed the said documents to be marked. By the

impugned judgment the High Court has found that in the

absence of registration and not being stamped the

documents were inadmissible.

7. We heard the learned counsel for the parties. We

heard Shri M. Vijay Bhaskar, learned Counsel on behalf

of the appellants and also Shri Venkateshwar Rao,

learned Counsel on behalf of the respondent.

8. It is submitted by the appellants that the Family

settlement Khararunama dated 15.04.1986 was prepared

in triplicate. The respondent also obtained one of the

triplicate copies. In his examination the respondent

5
admitted his signature in the said ‘Khararunama’ and

the same has been marked as B1 to B3. It is further

submitted that the respondent as PW1 has admitted his

signature on the receipt dated 08.12.1993 marked as

(B4). B9 to B11 are stated to be admission of signature

on the Khararunama dated 15.04.1986 upon the respondent

being confronted with the Khararunama. It is pointed

out that High Court erred in not considering the family

settlement Khararunama and receipt dated 08.12.1993 in

accordance with well-established principles relating

to the law of family settlement /family arrangement.

Reliance is placed on the judgment of this court

in Subraya M.N. v. Vittala M.N.1 to contend that there

can be an oral relinquishment of the share of the family

members in the family settlement and family

arrangement. If the terms of the said family

settlement is reduced into writing, and it is only a

memorandum executed subsequently recording the terms

of the oral family settlement, then, no registration

is needed, it is contended. The decision of this Court

1 (2016) 8 SCC 705
6
in Thulasidhara v. Narayanappa2 has also been relied

upon. It is lastly contended that even if the family

settlement Khararunama is required to be registered,

in view of the fact that without registration written

document of family settlement/arrangement could be used

as corroborative evidence as explaining the arrangement

made thereunder and the conduct of the parties, the

order of the High Court is infirm.

9. Per contra, apart from reiterating his case about

the appellants obtaining his signature on blank papers

and subsequently utilizing them for the family

settlement, it is contended that family settlement

Khararunama dated 15.04.1986 required registration

under section 17(1)(b) of the Registration Act, 1908.

Under the said settlement, appellants ought to pay

certain sum to the respondent. The document would come

into force after the receipt of the consideration. It

is contended that the High Court is right in finding

that unregistered family Khararunama, whereunder a past

transaction of relinquishment is recorded, was

2 (2019) 6 SCC 409
7
inadmissible for want of registration and deficiency

of stamp duty.

10. The Khararunama reads, inter alia, as follows:

“We, the three are brothers. We and our
brothers divided family properties and
executed partition list dated 17-11-1980. As
per the said partition list B schedule
property fallen to No.1 of us and E schedule
property fallen to No.2 of us and F schedule
property fallen to No. 3 of us and we are
enjoying those properties. While the matter
stood some constructions were undertaken to
the house. Nos. 2 and 3 of us have divided
the property which jointly fallen to them
and made some constructions and enjoying.
Nadava way is being enjoyed by all of us
jointly.

Even after 17-11-1980 by this date we are
having common dining though properties are
divided and little disputes are arising
among us and elders are interfered and
settled.

We have not reduced into writing the events
that took place among three of us subsequent
to 17-11-1980. We are enjoying the
properties as per the following changes as
per the advice of the elders.

The Nadava way which was originally fell
jointly to three of us is being enjoyed by
Nos.1 and 2 of us since no. 3 of us gave
away his undivided 1/3rd in favour of Nos. 1
and 2 of us. Likewise, Nos. 1 and 2 of us
have been enjoying said Nadava way with an
understanding to enjoy Nadava way likewise
if any further floors are raised over ground
floor. The undivided ½ share house portion

8
which originally fallen to share of No. 3
of us which was subsequently mutually
divided among Nos. 2 and 3 of us was given
away by No.3 of us to No.2 of us and
accordingly No.2 of us has been in enjoyment
of the entire house portion. No.3 of us is
enjoying with absolute rights the shop room
which was fallen to his share with an
understanding that No.3 of us can raise
constructions over the said shop room within
the measurements of shop room. We have been
enjoying with an understanding that eastern
wall of above said shop shall be joint
between Nos.2 and 3 of us and western wall
shall be joint for all the three of us and
northern wall shall be joint between Nos.2
and 3 of us. We have been enjoying with an
understanding that none of us shall arrange
any door-ways, windows or ventilators to
said joint walls.

For the above adjustments No.1 of us has
already paid Rs.25,000/- (Rupees Twenty-
Five Thousand) to No. 3 of us previously and
No. 2 of us has already paid Rs. 75,000/-
(Rupees Seventy-Five Thousand) to No. 3 of
us previously.

We have agreed to arrange separate steps
from our respective ground floor portion as
and when further floors are constructed.
Nos. 1 to 3 of us have been enjoying the
properties as mentioned above with absolute
rights. We have been enjoying the remaining
properties fallen to us as per partition
list dated 17-11-1980 which are not
mentioned in this document.

This Kharurunama is executed for record
purpose and for remembrance purpose. All the
contents of this document are read over and
explained to all of us and we have willfully
agreed the contents on our volition. We will
not raise any disputes in future.”

9
Parties 1 and 2 are the appellants. The 3rd party

is the respondent.

11. As far as the receipt is concerned, it is signed

on a 20 paise revenue stamp. It is allegedly executed

by the respondent having received Rs.2,00,000/- (Rupees

two lakhs) on 08.12.1983 as per the advice of the elders

besides the amount of Rs.1,00,000/- (Rupees one lakh)

already paid to the respondent mentioned in the

Khararunama dated 15.04.1986 while vacating the house

portion mentioned in the Kharurunama excepting the shop

room which fell to the share of the respondent under

the Partition List 1980 purportedly signed by two

witnesses. It is executed in favour of the second

appellant.

12. Undoubtedly, Section 17(1)(b) makes ‘other non-

testamentary instruments’, which purport or operate to

create, assign, limit or extinguish whether in present

or in future any right or interest whether vested or

contingent of the value of Rs.100/- and upwards in an

immovable property compulsorily registrable. Section

17(1)(c) reads as follows:

10
“17(1)(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”

13. Section 17 (2) provides nothing in Clauses

(b) and (c) of sub-Section(1) applies, inter alia, to

any instrument of partition made by the revenue

officer. Section 49 of the Registration Act reads as

follows:

“49. Effect of non-registration of
documents required to be registered.—No
document required by section 17 1[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: 54 [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) 55, 56 [***] or as
evidence of any collateral transaction
11
not required to be effected by registered
instrument.] ..”

14. There is a long line of judgments of this court

dealing with the question as to whether a family

arrangement is compulsorily registrable. We need

only refer to the case of Kale v. Dy. Director of

Consolidation3. This Court has summed up the

essentials of the family settlement in the following

proposition:

“10. In other words to put the binding
effect and the essentials of a family
settlement in a concretised form, the matter
may be reduced into the form of the
following propositions:

“(1) The family settlement must be a
bona fide one so as to resolve family
disputes and rival claims by a fair and
equitable division or allotment of
properties between the various members of
the family;

(2) The said settlement must be
voluntary and should not be induced by
fraud, coercion or undue influence;

(3) The family arrangement may be even
oral in which case no registration is
necessary;

(4) It is well settled that
registration would be necessary only if

3 AIR 1976 SC 807
12
the terms of the family arrangement are
reduced into writing. Here also, a
distinction should be made between a
document containing the terms and
recitals of a family arrangement
made under the document and a mere
memorandum prepared after the family
arrangement had already been made either
for the purpose of the record or for
information of the court for making
necessary mutation. In such a case the
memorandum itself does not create or
extinguish any rights in immovable
properties and therefore does not fall
within the mischief of Section 17(2) of
the Registration Act and is, therefore,
not compulsorily registrable;

(5) The members who may be parties to
the family arrangement must have some
antecedent title, claim or interest even
a possible claim in the property which is
acknowledged by the parties to the
settlement. Even if one of the parties to
the settlement has no title but under the
arrangement the other party relinquishes
all its claims or titles in favour of such
a person and acknowledges him to be the
sole owner, then the antecedent title
must be assumed and the family
arrangement will be upheld and the courts
will find no difficulty in giving assent
to the same;

(6) Even if bona fide disputes, present
or possible, which may not involve legal
claims are settled by a bona fide family
arrangement which is fair and equitable
the family arrangement is final and
binding on the parties to the
settlement.”

(Emphasis supplied)
13

15. In the facts of this case, the contention of

the appellants is that the Kharurunama dated

15.04.1986 merely sets out the arrangement arrived at

between the brothers which is the family arrangement

and it was a mere record of the past transaction and

therefore by itself it did not create or extinguish

any right over immovable property. Resultantly, the

document did not attract Section 17(1)(b) of the

Registration Act. In other words, it is contended

that even if there is relinquishment of rights by the

family member, since the document is only a record of

what had already happened in the past, the law did

not mandate registration.

16. It is to be noted that in this regard emphasis

is placed by the appellants on the decision of this

Court in Subraya M.N. v. Vittala M.N. (supra).

Therein, in regard to the dispute to plaint items 1

and 2 properties, there was D22 resolution passed by

the village panchayat signed by the Panchayatdar,

plaintiffs 3 and 4 and defendant. It was, inter alia,

mentioned therein that the defendant, in whose favour

the plaintiffs 3 and 4 relinquished the rights, had
14
paid Rs.15,000/- each to the said plaintiffs. Dealing

with the impact of Section 17 and 49 of the

Registration Act this Court, inter alia, held:

“16. Even though recitals in Ext. D-22 are
to the effect of relinquishment of right in
Items 1 and 2, Ext. D-22 could be taken as
family arrangements/ settlements. There is
no provision of law requiring family
settlements to be reduced to writing and
registered, though when reduced to writing
the question of registration may arise.
Binding family arrangements dealing with
immovable property worth more than rupees
hundred can be made orally and when so made,
no question of registration arises. If,
however, it is reduced to the form of
writing with the purpose that the terms
should be evidenced by it, it required
registration and without registration it is
inadmissible; but the said family
arrangement can be used as corroborative
piece of evidence for showing or explaining
the conduct of the parties. In the present
case, Ext. D-22 panchayat resolution reduced
into writing, though not registered can be
used as a piece of evidence explaining the
settlement arrived at and the conduct of the
parties in receiving the money from the
defendant in lieu of relinquishing their
interest in Items 1 and 2.”

(Emphasis supplied)

15

17. This view has been also followed in

Thulasidhara v. Narayanappa4. Paragraph-9.5 reads as

below:

“9.5. As held by this Court in Subraya
M.N. [Subraya M.N. v. Vittala M.N
., (2016)
8 SCC 705] even without registration a
written document of family
settlement/family arrangement can be used as
corroborative evidence as explaining the
arrangement made thereunder and conduct of
the parties. In the present case, as
observed hereinabove, even the plaintiff has
also categorically admitted that the oral
partition had taken place on 23-4-1971 and
he also admitted that 3 to 4 panchayat
people were also present. However, according
to him, the same was not reduced in writing.
Therefore, even accepting the case of the
plaintiff that there was an oral partition
on 23-4-1971, the document, Ext. D-4 dated
23-4-1971, to which he is also the signatory
and all other family members are signatory,
can be said to be a list of properties
partitioned. Everybody got right/share as
per the oral partition/partition.

Therefore, the same even can be used as
corroborative evidence as explaining the
arrangement made thereunder and conduct of
the parties. Therefore, in the facts and
circumstances of the case, the High Court
has committed a grave/manifest error in not
looking into and/or not considering the
document Ext. D-4 dated 23-4-1971.”

4 (2019) 6 SCC 409
16

18. In the said case plaintiff had admitted the

oral partition and the unregistered document dated

23.04.1971 to which he was the signatory, was accepted

as the list of properties in the partition.

19. In Ram charan v. Girja Nandini5, this Court

was dealing with a case of a compromise decree and

this Court went on to hold that it was a family

arrangement. It went on to hold as follows:

“.. For as the Privy Council pointed out in
Mst. Hiran Bibi’s case, AIR 1914 PC 44 in a
family settlement each party takes a share
in the property by virtue of the independent
title which is admitted to that extent by
the other parties. It is not necessary, as
would appear from the decision in Rangasami
Gounden v. Nachiappa Gounden
46 Ind App 72
(AIR 1918 PC 196), that every party taking
benefit under a family settlement must
necessarily be shown to have, under the law,
a claim to a share in the property. All
that is necessary is that the parties must
be related to one another in some way and
have a possible claim to the property or a
claim or even a semblance of a claim on some
other ground as, say affection.”

(Emphasis supplied)

5 AIR 1966 SC 292
17

20. This view has been reiterated in Krishna Beharilal

v. Gulabchand6. In Yellapu Uma Maheswari and Another v.

Buddha Jagadheeswararao and Others7, this Court found

that the relinquishment of the right was made through

the document. Hence, it was found that documents were

compulsorily registrable. This Court inter alia held

as follows:

“15. 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 Exts.

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 registrable document and if
the same is not registered, it becomes an
inadmissible document as envisaged under
Section 49 of the Registration Act. Hence,
Exts. B-21 and B-22 are the documents which
squarely fall within the ambit of Section
17(1)(b)
of the Registration Act and hence
are compulsorily registrable documents and
the same are inadmissible in evidence for
the purpose of proving the factum of
partition between the parties. We are of the
6 AIR 1971 SC 1041
7(2015) 16 SCC 787
18
considered opinion that Exts. B-21 and B-22
are not admissible in evidence for the
purpose of proving primary purpose of
partition.”
(Emphasis supplied)

21. We may notice that in Sita Ram Bhama v. Ramvatar

Bhama8, wherein the appellant and respondent were

brothers, according to the appellant, a memorandum of

settlement as decided by their late father was recorded

in regard to his acquired property. The question arose

as to whether the settlement was admissible. It is

necessary to notice paragraph-10, which reads as under:

“10. The only question which needs to be
considered in the present case is as to
whether document dated 9-9-1994 could have
been accepted by the trial court in evidence
or the trial court has rightly held the said
document inadmissible. The plaintiff
claimed the document dated 9-9-1994 as
memorandum of family settlement. The
plaintiff’s case is that earlier partition
took place in the lifetime of the father of
the parties on 25-10-1992 which was recorded
as memorandum of family settlement on 9-9-
1994. There are more than one reasons due
to which we are of the view that the document
dated 9-9-1994 was not mere memorandum of
family settlement, rather a family
settlement itself. Firstly, on 25-10-1992,
the father of the parties was himself owner
of both, the residence and shop being self-

8 (2018) 15 SCC 130
19
acquired properties of Devi Dutt Verma. The
High Court has rightly held that the said
document cannot be said to be a will, so
that the father could have made the will in
favour of his two sons, the plaintiff and
the defendant. Neither the plaintiff nor the
defendant had any share in the property on
the day when it is said to have been
partitioned by Devi Dutt Verma. Devi Dutt
Verma died on 10-9-1993. After his death,
the plaintiff, the defendant and their
mother as well as sisters become the legal
heirs under the Hindu Succession Act, 1956
inheriting the property being a Class I
heir. The document dated 9-9-1994 divided
the entire property between the plaintiff
and the defendant which document is also
claimed to be signed by their mother as well
as the sisters. In any view of the matter,
there is relinquishment of the rights of
other heirs of the properties, hence, the
courts below are right in their conclusion
that there being relinquishment, the
document dated 9-9-1994 was compulsorily
registrable under Section 17 of the
Registration Act.”

22. Thereafter, we may notice the view of this Court

in paragraph-13 as under:

“13. There is only one aspect of the matter
which needs consideration i.e. whether the
document dated 9-9-1994, which was
inadmissible in evidence, could have been
used for any collateral purpose. 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

20
purpose i.e. division of joint properties
by metes and bounds…”

23. No doubt in the said case, the court has followed

the Judgment in Yellapu Uma Maheswari and

Another (supra). It found that the unregistered

memorandum could be used for collateral purpose within

the meaning of Section 49 of the Registration Act

subject to payment of penalty and stamp duty.

24. Order 13 Rule 3 of the Code of Civil Procedure,

1908 (hereinafter referred to as ‘the Code’, for short)

enables the Court to reject any document which is

considered irrelevant or otherwise inadmissible

recording the ground of such rejection. Order 13 Rule

4 of the Code provides for the procedure when a document

has been admitted in evidence. Section 49 deals with

the effect of non-registration of documents which are

compulsorily registrable under Section 17 of the

Registration Act and Transfer of Property Act. Section

49(a) of the Registration Act declares that an

unregistered document which is compulsorily

registrable cannot ‘affect’ any immovable property

21
comprised therein. The expression ‘affect’ has been

explained by the full bench judgment of the Madras High

Court in Muruga Mudallar and Ors. v. Subba Reddiar9. We

may notice only the following discussion in the

judgment of Satyanarayana Rao,J.:

“As pointed out by Spencer J. in
Saraswathamma v. Paddayya, 46 Mad. 349 : (A.
I. R. 1923 Mad. 297) the verb “affect” in
Section 49 is only a compendious term
employed by the Legislature to express the
meaning of the longer phrase “purporting or
operating to create, declare, assign, limit
or extinguish, whether in present or in
future, any right, title or interest whether
vested or contingent to” (See also Kanjee &
Moolji Bros, v. Shanmugham Pillai, 56 Mad.
169 : (A. I. R. 1932 Mad. 734), where the
view of Spencer J. was accepted).”

25. Section 49(c) of 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:

“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
9 AIR 1951 Madras 12
22
property. The emphasis on the word “as” was,
in my opinion, rightly laid by Venkatasubba
Rao J. in Saraswathamma v. Paddayya, 46 Mad.
349 : (A. I. R. 1923 Mad. 297), where the
learned Judge observed:

“What is prohibited by the section is
receiving a document as evidence of a
transaction, not merely receiving it in
evidence, i.e., 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 supplied)

26. 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

23
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.

27. In N. Varada Pillai v. Jeevarathnammal10, the

Privy Council Court took the view that though

unregistered, the document could be used to explain the

nature of the possession of a person. In the said

case, in fact, two widows, who were in possession of

the property in equal shares applied to the Collector

that they had given away the property as Stridhan to a

lady and that the orders may be issued for transferring

10 AIR 1919 P.C. 44
24
the property to her. The property was so transferred

on the basis of the petition. On the question whether

the transferee had obtained title by adverse possession

while finding the unregistered petition before the

Collector could not be admitted to prove a gift, the

fact that transferee was continuing as a donee and

owner was gleaned from the said petition to support the

case of adverse possession.

28. An attempt to derive support from the said judgment

was refused on a different set of facts by this court

in Kirpal Kaur v. Bachan Singh and Ors.11. In the said

case the court was dealing with the following facts.

The widow of a Hindu upon the death of her husband came

by possession of the plaint schedule properties. She

even got the property mutated. A gift was made by her.

The reversioners thereafter approached her and an

unregistered document was entered into with her wherein

she purported to acknowledge that she had only a life

estate. Thereafter the suit came to be filed. The

widow set up the case of adverse possession. On the

11 AIR 1958 SC 199
25
other hand, the plaintiffs placed reliance on the

unregistered document and relied upon the judgment of

the N. Varada Pillai (supra). This Court repelled the

case of the plaintiffs and held as follows in Kirpal

Kaur (supra):

“15. We cannot agree that on the authority
of Varatha Pillai’s case (1918) 46 I.A. 285,
the agreement of February 6, 1932, can be
admitted in evidence in the case in hand to
show the nature of Harnam Kaur’s possession
of the lands subsequent to its date. In
Varatha Pillai’s case (1918) 46 I.A. 285,
Duraisani had got into possession only after
the petition and claimed to retain
possession only under the gift mentioned in
it. The petition was therefore admissible
in evidence to show the nature of her
possession. In the present case Harnam Kaur
had been in possession before the date of
the document and to admit it in evidence to
show the nature of her possession subsequent
to it would be to treat it as operating to
destroy the nature of the previous
possession and to convert what had started
as adverse possession into a permissive
possession and, therefore, to give effect
to the agreement contained in it which
admittedly cannot be done for want of
registration. To admit it in evidence for
the purpose sought would really amount to
getting round the statutory bar imposed by
Section 49 of the Registration Act.”
(Emphasis supplied)

26

29. 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.

30. We may also usefully refer to the views expressed

by the Division Bench of the Madras High Court in K.

Panchapagesa Ayyar and Ors. v. K. Kalyanasundaram Ayyar

and Ors.12:

“25. To sum up it is well settled in a long
series of decisions which have since
received statutory recognition by the
Amending Act of 1929 (vide the concluding
words of the new proviso to Section 49 of
the Registration Act) that a compulsorily
registrable but an unregistered document is
admissible in evidence for a collateral
purpose that is to say, for any purpose
other than that of creating, declaring,
assigning, limiting or extinguishing a right
to immovable property.

12 AIR 1957 Madras 472
27
The expression “collateral purpose” is no
doubt a very vague one and the Court must
decide in each case whether the purpose for
which it is sought to use the unregistered
document is really a collateral one or is
to establish directly title to the immovable
property sought to be conveyed by the
document. But by the simple device of
calling, it a “collateral purpose” a party
cannot use the unregistered document in any
legal proceedings to bring about indirectly
the effect which it would have had if
registered.

To quote Sir George Lowndes in James R. R.
Skinner v. Robert Hercules Skinner ILR
51
All 771: MANU/PR/0091/1929 : AIR 1929 PC 269
(Z 22) the collateral purpose to which the
document is put should be nothing else than
an evasion of the statute and render almost
nugatory the hitherto well-established rule
relating to the limited uses to which an
unregistered partition deed can be put to.”
(Emphasis supplied)

31. In Roshan Singh and Others v. Zile Singh and

Others13, the question arose whether Exhibit P12 in the

said case was an instrument of partition and therefore

inadmissible for want of registration under Section 49

of the Registration Act or whether it was merely a

13
AIR 1988 SC 881

28
memorandum of family arrangement. This Court after

referring to the document held as follows:

“8. According to the plain terms of the
document Exh. P-12, it is obvious that it
was not an instrument of partition but
merely a memorandum recording the decision
arrived at between the parties as to the
manner in which the partition was to be
effected. The opening words of the document
Exh. P-12 are: ‘Today after discussion it
has been mutually agreed and decided
that….’ What follows is a list of
properties allotted to the respective
parties. From these words, it is quite
obvious that the document Exh. P-12 contains
the recital of past events and does not
itself embody the expression of will
necessary to effect the change in the legal
relation contemplated. So also the Panch
Faisla Exh. P-1 which confirmed the
arrangement so arrived at, opens with the
words ‘Today on 31-1-1971 the following
persons assembled to effect a mutual
compromise between Chaudhary Puran Singh and
Chaudhary Zile Singh and unanimously decided
that….’ The purport and effect of the
decision so arrived at is given thereafter.
One of the terms agreed upon was that the
gher marked B2 would remain in the share of
Zile Singh, representing the Plaintiffs.

9. It is well-settled that while an
instrument of partition which operates or
is intended to operate as a declared
volition constituting or severing ownership
and causes a change of legal relation to the
property divided amongst the parties to it,
requires registration under Section
17(1)(b)
of the Act, a writing which merely

29
recites that there has in time past been a
partition, is not a declaration of will, but
a mere statement of fact, and it does not
require registration. The essence of the
matter is whether the deed is a part of the
partition transaction or contains merely an
incidental recital of a previously completed
transaction. The use of the past tense does
not necessarily indicate that it is merely
a recital of a past transaction. It is
equally well-settled that a mere list of
properties allotted at a partition is not
an instrument of partition and does not
require registration. 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.
Therefore, a mere recital of what has
already taken place cannot be held to
declare any right and there would be no
necessity of registering such a document.
Two propositions must therefore flow: (1) A
partition may be effected 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. Secondly evidence of
the factum of partition will not be
admissible by reason of Section 91 of the
Evidence Act, 1872. (2) Partition lists
which are mere records of a previously
completed partition between the parties,
will be admitted in evidence even though
they are unregistered, to prove the fact of
partition: See Mulla’s Registration Act, 8th
Edn., pp. 54-57.”
(Emphasis supplied)

30
Thereafter, the Court also approved of the use of

the said document for a collateral transaction and

observed as follows:

“11. Even otherwise, the document Exh. P 12
can be looked into under the proviso to
Section 49 which allows documents which
would otherwise be excluded, to be used as
evidence of ‘any collateral transaction not
required to be effected by a registered
instrument’. In Varada Pillai v.
Jeevarathnammal
, (1919) 46 Ind App 285 : AIR
1919 PC 44 the Judicial Committee of the
Privy Council allowed an unregistered deed
of gift which required registration, to be
used not to prove a gift ‘because no legal
title passed’ but to prove that the donee
thereafter held in her own right. We find
no reason why the same rule should not be
made applicable to a case like the present.”

32. In SMS Tea Estates (P) Ltd. v. Chandmari Tea Co.

Private Ltd.14, the question arose whether an

arbitration agreement contained in a compulsorily

registrable document which was not registered could be

used to prove the collateral transaction, namely, the

provision for arbitration. This court held as follows:

“11. Section 49 makes it clear that a
document which is compulsorily
registerable, if not registered, will not

14
(2011) 14 SCC 66
31
affect the immovable property comprised
therein in any manner. It will also not be
received as evidence of any transaction
affecting such property, except for two
limited purposes. First is as evidence of a
contract in a suit for specific performance.

Second is as evidence of any collateral
transaction which by itself is not required
to be effected by registered instrument. A
collateral transaction is not the
transaction affecting the immovable
property, but a transaction which is
incidentally connected with that
transaction. The question is whether a
provision for arbitration in an unregistered
document (which is compulsorily
registerable) is a collateral transaction,
in respect of which such unregistered
document can be received as evidence under
the proviso to Section 49 of the
Registration Act.

16. An arbitration agreement does not
require registration under the Registration
Act
. Even if it is found as one of the
clauses in a contract or instrument, it is
an independent agreement to refer the
disputes to arbitration, which is
independent of the main contract or
instrument. Therefore having regard to the
proviso to Section 49 of the Registration
Act read with Section 16(1)(a) of the Act,
an arbitration agreement in an unregistered
but compulsorily registerable document can
be acted upon and enforced for the purpose
of dispute resolution by arbitration.”
(Emphasis supplied)

32

33. If we apply the test as to whether the Khararunama

in this case by itself ‘affects’, i.e., by itself

creates, declares, limits or extinguishes rights in the

immovable properties in question or whether it merely

refers to what the appellants alleged were past

transactions which have been entered into by the

parties, then, going by the words used in the document,

they indicate that the words are intended to refer to

the arrangements allegedly which the parties made in

the past. The document does not purport to by itself

create, declare, assign, extinguish or limit right in

properties. Thus, the Khararunama may not attract

Section 49(1)(a) of the Registration Act.

34. As far as Section 49(1)(c) of the Registration Act

is concerned, it provides for the other consequence of

a compulsorily registrable document not being so

registered. That is, under Section 49(1)(a), a

compulsorily registrable document, which is not

registered, cannot produce any effect on the rights in

immovable property by way of creation, declaration,

assignment, limiting or extinguishment. Section

49(1)(c) in effect, reinforces and safeguards against
33
the dilution of the mandate of Section 49(1)(a). Thus,

it prevents an unregistered document being used ‘as’

evidence of the transaction, which ‘affects’ immovable

property. If the Khararunama by itself, does not

‘affect’ immovable property, as already explained,

being a record of the alleged past transaction, though

relating to immovable property, there would be no

breach of Section 49(1)(c), as it is not being used as

evidence of a transaction effecting such property.

However, being let in evidence, being different from

being used as evidence of the transaction is pertinent

[See Muruga Mudallar (supra)]. Thus, the transaction

or the past transactions cannot be proved by using the

Khararunama as evidence of the transaction. That is,

it is to be noted that, merely admitting the

Khararunama containing record of the alleged past

transaction, is not to be, however, understood as

meaning that if those past transactions require

registration, then, the mere admission, in evidence of

the Khararunama and the receipt would produce any legal

effect on the immovable properties in question.

34

35. As far as stamp duty goes, on our finding regarding

the nature of the document, viz., Khararunama, being

record of the alleged transactions, it may not require

to be stamped. We notice the following conclusion of

the Division Bench of the Madras High Court in A.C.

Lakshmipathy and others v. A.M. Chakrapani Reddiar and

others15:

“42. To sum up the legal position
xxx xxx xxx
(V) However, a document in the nature of a
Memorandum, evidencing a family arrangement
already entered into and had been prepared
as a record of what had been agreed upon,
in order that there are no hazy notions in
future, it need not be stamped or
registered.”

36. No doubt, when there has been a partition, then,

there may be no scope for invoking the concept of

antecedent right as such, which is inapposite after a

disruption in the joint family status and what is more

an outright partition by metes and bounds. In this

regard, it is to be noticed that the appellants and the

respondents, admittedly, partitioned their joint

family properties. This is clear from the Khararunama

15 AIR 2001 Madras 135
35
wherein it is stated that they have divided the joint

family properties. The properties, which are mentioned

in the Khararunama, became the separate properties of

the respondent.

37. Resultantly, the Appeal is allowed. The impugned

Judgment is set aside subject to the observations as

contained in this Judgment. There will be no Order as

to costs.

……………………………………………J.

(K.M JOSEPH)

…………………………………………J.

(S. RAVINDRA BHAT)

NEW DELHI;

OCTOBER 1, 2021.

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