PROJECT SUBMISSION

RAJIV GANDHI NATIONAL UNIVERSITY OF LAW, PUNJAB, PATIALA

EVIDENTIARY VALUE OF NON REGISTERED DOCUMENTS PROPERTY LAW PROJECT V SEMESTER

SUBMITTED TO: PROF. M.R. GARG

SUBMITTED BY GROUP 11: ANAND RAJA (335) SOURABH RATH (342) RAVINDRA MANI MISHRA (347) ASHISH KUMAR (306)

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TABLE OF CONTENTS

ACKNOWLEDGEMENT ............................................................................................................... 1 1. INTRODUCTION ...................................................................................................................... 2 1.1 SCOPE OF THE PROJECT .................................................................................................. 2 1.2 RESEARCH METHODOLOGY ............................................................................................ 2 1.3 DOCUMENT UNDER INDIAN LAW .................................................................................... 2 1.4 THE EVIDENCE ACT ......................................................................................................... 3 1.5 THE REGISTRATION ACT ................................................................................................. 5 1.6 THE PROPERTY ACT ........................................................................................................ 6 1.7 JUDICIAL PROCESS AND REGISTRATION ......................................................................... 6 2. DOCUMENTS REQUIRING REGISTRATION ............................................................................ 8 2.1 REGISTRATION ACT, 1908 ................................................................................................. 8 2.2 APPLICATION OF SECTION 17 ........................................................................................ 11 2.3 COMPULSORY REGISTRATION....................................................................................... 11 2.4 BENEFITS OF REGISTRATION......................................................................................... 12 3. LAND REGISTRATION IN OTHER JURISDICTIONS ............................................................... 13 3.1 TORRENS TITLE ............................................................................................................. 13 4. EVIDENTIARY EFFECT OF NON REGISTRATION OF DOCUMENTS ................................... 15 4.1 EFFECT OF NON REGISTRATION OF SALE................................................................. 15 4.2 EFFECT OF NON REGISTRATION OF LEASE .............................................................. 16 4.2.1 LEASE HOW MADE: EFFECT OF NON REGISTRATION OF DOCUMENTS .................. 16 4.3 EFFECT OF NON REGISTRATION OF MORTGAGE ..................................................... 19 4.4 EFFECT OF NON REGISTRATION OF EXCHANGE ...................................................... 20 4.5 EFFECT OF NON REGISTRATION OF ACTIONABLE CLAIMS ..................................... 21 4.6 EFFECT OF NON-REGISTRATION OF GIFT DEED ......................................................... 21 CONCLUSION ........................................................................................................................... 23 PROPERTY LAW

PROJECT SUBMISSION BIBLIOGRAPHY ........................................................................................................................ 24

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ACKNOWLEDGEMENT

We would like to thank Prof. M.R. Garg for giving us the opportunity for working on such a riveting topic. We are very grateful for all the help and guidance he has provided us in the course of our work and research. We are also very grateful to the library for maintaining and updating it with current research materials. We would also like to thank all the people who were directly and indirectly associated with the making of this project. Last but not the least, we would like to thank RGNUL for providing us the wonderful internet infrastructure which formed a base for the majority of our research.

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I INTRODUCTION

1.1

SCOPE OF THE PROJECT The current project deals with one issue which is vast and constricted at the same

time: The Evidentiary Value of Non-Registration of Documents. This project deals with three pieces of legislation namely: the Indian Evidence Act, 1872, the Registration Act, 1908 and the Transfer of Property Act, 1882. The aim of this project is to examine the evidentiary value of non-registration of documents and the necessity of such registration. 1.2 RESEARCH METHODOLOGY Various kinds of sources have been consulted for the creation of this project; however maximum reliance is on doctrinal sources, a la books, research articles, electronic sources, judicial decisions and web sites. The citation format followed throughout this project is the Harvard Bluebook: A Uniform Method of Legal Citation. 1.3 DOCUMENT UNDER INDIAN LAW Documents have had a very crucial role in the law of evidence in various legal systems around the world. The sole reason for this is that documents are a form of permanent record which cannot be easily altered or changed. If there are two different versions of the same document then the authenticity of one can be easily verified and pronounced. Document as a word has been aptly defined in the Indian Evidence Act, 1872. 1 According to the definition provided in the above mentioned Act, a document is taken to
1

Defined in Section 3 of the Indian Evidence Act, 1872: "Document" means any matter expressed or described upon any substance by means of letter, figures or makes, or by more than one of those means, intended to be used, or which may be used, for the purpose of recording that matter. A writing is a document; Words printed, lithographed or photographed are document; A map or plan is a document; An inscription on a metal plate or stone is a document; A caricature is a document.

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PROJECT SUBMISSION mean any matter described or expressed upon any substance in the form of letters, figures or other images which is used specifically to record such information. The definition then goes on to provide many examples of what may be documents, i.e. a writing is a document, printed words, lithographed words and photographs are documents, a map is a document, a plan is a document, a caricature, an inscription on a stone or a metal plate are all documents. The definition of document thereby was limited to those exact words of the legislature till the year 2000 when the Information Technology Act, 2000 was passed by the Parliament. The Act introduced some changes to the Indian Evidence Act, 1872 which was dealt with in Section 92 and Schedule II.2 Schedule 2 of the Act made various changes to the existing provisions of the Indian Evidence Act, 1872 in the sense that it included electronic records to be a form of evidence and with the insertion of Section 65-B(1),3 electronic information which was printed on paper or stored, recorded or copied on a magnetic or optical medium was deemed to be a document. So in essence, the Information Technology Act, 2000 deemed electronic information to be a document subject to certain conditions that the computer recording the information had to meet.4 This project discusses the evidentiary value of non-registered documents in the ambit of three legislations. The Registration Act, 1908, the Indian Evidence Act, 1872 and the Transfer of Property Act, 1882. 1.4 THE EVIDENCE ACT The statutory provisions regarding evidence in India are all regulated by the Indian Evidence Act, 1872. Evidence forms the basis of all forms of litigation and court activities in the world. It is the very basis on which an incident can be declared as a fact before a court of
2

Section 92, Information Technology Act, 2000: The Indian Evidence Act, 1872 shall be amended in the manner specified in the Second Schedule of the Act. Section 65-B(1), Indian Evidence Act, 1872: Notwithstanding anything contained in this Act, any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer (hereinafter referred to as the computer output) shall be deemed to be also a document, if the conditions mentioned in this section are satisfied in relation to the information and computer in question and shall be admissible in any proceedings, without further proof or production of the original, as evidence of any contents of the original or of any fact stated therein of which direct evidence would be admissible. See Section 65-B(2), Indian Evidence Act, 1872.

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PROJECT SUBMISSION law. Evidence is the very foundation on which a case moves from determination to the determination of legal issues. Every time a trial is in progress there is an undisputable need for evidence and all the substantial provisions of evidence in India are dealt with by the Indian Evidence Act, 1872. Evidence may be defined as any material which tends to persuade the court of the truth or probability of some fact asserted before it.5 At its most general level the term means those items of information presented to the Court by parties trying to persuade it of the correctness of their argument.6 To put it even more simply, an evidence is something which may satisfy an inquirer of the facts existence.7 Evidence as used in judicial proceedings has several meanings. The two senses of the word are: first, the means whereby the Court is informed as to the issues of fact as ascertained by the pleadings; secondly, the subject matter of such means.8 Prior to the creation of the Indian Evidence Act, 1872 evidence in India was a bunch of confused rules which was worked on by the various provisions mentioned in religious texts and the drastically distinct personal laws. It was the work of Sir James Stephen that created a consolidated form of rules regarding the admissibility and acceptability of various forms and kinds of evidence. The enactment and adoption of the Indian Evidence Act, 1872 was a path-breaking judicial measure introduced in India, which changed the entire system of concepts pertaining to admissibility of evidences in the Indian courts of law. Up to that point of time, the rules of evidences were based on the traditional legal systems of different social groups and communities of India and were different for different persons depending on his or her caste, religious faith and social position. The Indian Evidence Act, 1872 removed this anomaly and differentiation, and introduced a standard set of law applicable to all Indians.

PETER MURPHY, A PRACTICAL APPROACH TO EVIDENCE 1 (2nd ed. 1985). STEVE UGLOW, EVIDENCE: CASES AND MATERIALS 14 (1997). CROSS & TAPPER , EVIDENCE 1 (8th ed. 1995). PHIPSON, EVIDENCE 2 (15th ed. 2000).

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PROJECT SUBMISSION The preamble of the Indian Evidence Act, 18729 states its objective to consolidate and amend the existing provisions regarding evidence in Indian law and it achieves the very same. 1.5 THE REGISTRATION ACT The Registration Act, 1908 was implemented in India to ensure a uniform substantive and procedural provision for the registration of documents. The main reasoning behind it was to ensure information regarding all land deals were gathered by the state in order to ensure maintenance of correct land records. 10 The Registration Act, 1908 is the single piece of legislation that provides the procedure for the registration of documents which are mandatory to be registered. The preamble of The Registration Act, 1908 declares the objective of the Act to be one of consolidating the enactments related to the registration of documents.11 Prior to the implementation of this Act, the Registry laws relating to registration of documents were to be found in West Bengal Regulation, 1793; Bombay Regulation, 1800 and Madras Regulation, 1802. The Indian Registration Act, 1864 was enacted and it came into force in 1965, however it was replace by Act 20 of 1866. The Indian Registration Act, 1871 was brought into force but it was replaced by the Indian Registration Act, 1877. After many amendments and changes the Indian Registration Bill, 1908 was introduced in the legislature. This bill was the one that became the Indian Registration Act, 1908 (16 of 1908). The Act was amended in 196912 and the word Indian was omitted. The Act then ultimately became the Registration Act, 1908. The Registration Act, 1908 is divided into fifteen parts containing around ninety sections.

Preamble, Indian Evidence Act, 1872 (Whereas it is expedient to consolidate, define and amend the Law of Evidence; it is hereby enacted as follows) See http://www.ccsindia.org/ccsindia/2006-dch/15_Registration%20of%20Documents.pdf (last visited on October 12, 2010). Preamble, The Registration Act, 1908. Amended by The Indian Registration (Amendment) Act, 1969.

10

11

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PROJECT SUBMISSION 1.6 THE PROPERTY ACT The legislation related to all manners of transactions in both movable and immovable property is called as the Transfer of Property Act, 1882. Its not as if laws related to transfer of property were non-existent in India before this enactment. They were strewn through the various pieces of personal law that existed in India. Property was transferred by means of succession, gift, etc. The preamble of the Act describes its objective as to amend certain parts of the law relating to transfer of property by parties, thereby clearly showing that laws regarding property were already pre-existing in India. The Transfer of Property Act, 1882 allows various forms of transfers, namely mortgages, 13 leases, 14 gift, 15 etc. all of which are executed in deeds and these deeds are necessary to be registered in order for the state to maintain a proper record. Certain documents mentioned within the Act are necessary to be registered in order to be admissible as evidence before an authority that can accept evidence and to have the intended effect.16 In almost all property based disputes, it is pertinent to prove a certain transaction was made regarding that property and it can only be proved through these documents. Now the multifarious rules of evidence have been constructed to provide the highest degree of fairness and genuineness. That is part of the reason for the existence of provisions such as registration in the first place. 1.7 JUDICIAL PROCESS AND REGISTRATION Registration is an important part of the judicial process in India. Although it was originally meant to be a provision which was for the purpose of maintaining a record, it has been made an essential part of the litigation culture of our country. There are side suits happening along with the main matter to entertain a certain document as evidence due its prima facie non admissibility because of non-registration.

13

See Chapter IV, Transfer of Property Act, 1882. See Chapter V, Transfer of Property Act, 1882. See Chapter VII, Transfer of Property Act, 1882. See Section 53A, Transfer of Property Act, 1882.

14

15

16

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PROJECT SUBMISSION Judicial delays are caused because a matter is not decided on its merits owing to the pendency and huge number of ancillary matters being argued upon, such as the late production of documents, registration of documents, failure of registration of documents, etc. The reason why suits take such a long time to be decided is due to a myriad number of reasons. But the lack of proper registration of documents forms a significant part of that problem.

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II DOCUMENTS REQUIRING REGISTRATION

2.1

REGISTRATION ACT, 1908

The Registration Act, 1908 clearly mentions documents which need to be registered. Section 17 reads as follows: (1) The following documents shall be registered, if the properties 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, of the Indian Registration Act 1866, or the Indian Registration Act 1871, or the Indian Registration Act 1877, or the this Act came or comes into force, namely:(a) instruments of gift of immoveable 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 immoveable 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 immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent; (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 immoveable property (Added by Act No. 21 of 1929);

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PROJECT SUBMISSION PROVIDED that the State Government may, by order published in Official Gazette, exempt from the operation of this sub-section any leases executed in any district, or part of a district, the terms granted by which do not exceed five years and the annual rent reserved by which do not exceed fifty rupees. (2) Nothing in clauses (b) and (c) of sub-section (1) applies to -

(i) any composition-deed; or

(ii) any instrument relating to shares in a joint stock company, notwithstanding that the assets of such company consists in whole or in part of immoveable property; or (iii) any debenture issued by any such company and not creating, declaring, assigning, limiting or extinguishing any right, title or interest, to or in immoveable property except insofar as it entitles the holder to the security afforded by a registered instrument whereby the company has mortgaged, conveyed or otherwise transferred the whole or part of its immoveable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or

(iv) any endorsement upon or transfer of any debenture issued by any such company; or

(v) any document not itself creating, declaring, assigning, limiting or extinguishing any right or title or interest of the value of one hundred rupees and upwards to or in immoveable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest; or

(vi) any decree or order of a court [except a decree or order expressed to be made on a compromise and comprising immoveable property other than that which is the subject-matter of the suit or proceedings] (Substituted by Act No. 21 of 1929 for the words 'and any award');

(vii) any grant of immoveable property by government; or PROPERTY LAW 9

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(viii) any instrument of partition made by a revenue officer; or

(ix) any order granting a loan or instrument of collateral security granted under the Land Improvement Act 1871, or the Land Improvement Loans Act 1883; or

(x) any order granting a loan under the Agriculturists Loans Act 1884, or instrument for securing the repayment of a loan made under that Act; or

[(x-a) any order made under the Charitable Endowments Act 1890 (6 of 1890) vesting any property in a treasurer of Charitable Endowments or divesting any such treasurer of any property; or] (Inserted by Act No. 39 of 1948)

(xi) any endorsement on a mortgage-deed acknowledging the payment of the whole or any part of the mortgage-money, and any other receipt for payment of money due under a mortgage when the receipt does not purport to extinguish the mortgage; or

(xii) any certificate of sale granted to the purchaser of any property sold by public auction by a civil or revenue officer.

[Explanation: A document purporting or operating to effect a contract for the sale of immoveable property shall not be deemed to require or ever to have required registration by reason only of the fact that such document contains a recital of the payment of any earnest money or of the whole or any part of the purchase money.] (Inserted by Act No. 2 of 1927) (3) Authorities to adopt a son, executed after the 1st day of January 1872, and not conferred by a will, shall also be registered. The section aptly sums up all documents that are necessary to be registered, i.e. they have a legal requirement to be registered. The benefits of registration include an immediate check as to the originality of the document and the presence of reliability as to the evidentiary value of said document.

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PROJECT SUBMISSION 2.2 APPLICATION OF SECTION 17 Section 17 of the Registration Act, 1908 would be attracted in a case where the dispute relates to a charge sought to be created by a debenture on immoveable property which was existent at the date of the creation of the charge and was in the ownership of the company at that date. It would, therefore, necessarily follow from it that a debenture which seeks to create, declare or limit any right, title or interest to or in immoveable property would be covered by section 1717 of the Registration Act, 1908. 2.3 COMPULSORY REGISTRATION There are several documents that are not required to be registered compulsorily. Some of them require high stamp duty and some of them do not. Even the ones that require high stamp duty, if they are under stamped, can be rectified later by paying a penal amount ten times the original amount.18 Non-payment of stamp duty does not make the document void or otherwise invalid. The consequences of under stamping as per the Indian Stamp Act, 1899 are: (1) to make the document inadmissible for the evidence before any authority capable of receiving evidence of before any public authority.19 (2) the document can also be impounded for enforcing the payment of full stamp value. An under stamped instrument can be admitted as evidence in court, if penal stamp duty is ten times the value of the original amount, and is paid.20 In conclusion it is best to always register a document which is compulsory registerable or for which stamp duty is not high. Documents for which stamp duty is high and which do not require registration do not become invalid for want of proper stamp duty alone. But the rights of both parties should be protected in case of default, so consult a lawyer. Always give possession separately and never in the documents itself.

17

Section 17 (1) (b), Registration Act, 1908. See Chapter IV, Indian Stamp Act, 1899. See Section 35, Indian Stamp Act, 1899. See Section 33, 40, Indian Stamp Act, 1899.

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PROJECT SUBMISSION 2.4 BENEFITS OF REGISTRATION The most important question that comes up is what is the benefit of registering a document that is not mandated to be registered by the law. The benefits that come are ancillary in nature, not paying a fine when the document is required to be produced in evidence,21 a benefit for the state to maintain a record of all land transactions,22 etc. Registration creates a positive bias regarding the genuineness of the document; however it is not something that is free from misuse. Although registration is supposed to be a prima facie check regarding authenticity, sometimes forged documents are also registered. This process results in the creation of an odd bias.

21

See Section 35, Indian Stamp Act, 1899. See http://www.ccsindia.org/ccsindia/2006-dch/15_Registration%20of%20Documents.pdf (last visited on October 12, 2010).

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III LAND REGISTRATION IN OTHER JURISDICTIONS

3.1 TORRENS TITLE Torrens title is a system of land title where a register of land holdings maintained by the state guarantees an indefeasible title to those included in the register. The system was formulated to combat the problems of uncertainty, complexity and cost associated with oldsystem title, which depended on proof of an unbroken chain of title back to a good root of title. The Torrens title system was introduced in South Australia in 1858, formulated by then colonial Premier of South Australia Sir Robert Torrens. Since then, it has become pervasive around the Commonwealth of Nations and very common around the globe. In the United States, states with a limited implementation include Minnesota, Massachusetts, Colorado, Georgia, Hawaii, New York, North Carolina, Ohio, and Washington. In the Dominican Republic, the system was implemented in 1920, and has been in use since. The effect of registration under the deeds registration system was to give the instrument registered "priority" over all instruments that are either unregistered or not registered until later. The basic difference between the deeds registration and Torrens systems is that the former involves registration of instruments while the latter involves registration of title.23 Moreover, though a register of who owned what land was maintained, it was unreliable and could be challenged in the courts at any time. The limits of the deedsregistration system meant that transfers of land were slow, expensive, and often unable to create certain title. The main difference between a common law title and a Torrens title is that a member of the general community, acting in good faith, can rely on the information on the land register as to the rights and interests of parties recorded there, and act on the basis of that information. A prospective purchaser, for example, is not required to look beyond that record.
23

T ROUFF, AN ENGLISHMEN LOOKS AT THE TORRENS SYSTEM (1957).

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PROJECT SUBMISSION He or she does not need even to examine the Certificate of Title, the register information being paramount. This contrasts with a common-law title, which is based on the principle that a vendor cannot transfer to a purchaser a greater interest than he or she owns. As with a chain, the seller's title is as good as "the weakest link" of the chain of title. Accordingly, if a vendor's common-law title is defective in any way, so would be the purchaser's title. Hence, it is incumbent on the purchaser to ensure that the vendor's title is beyond question. This may involve both inquiries and an examination of the "chain of title."24 The registered proprietor of Torrens land is said to have an indefeasible title. That means that only in very limited circumstances can his or her title be challenged. These challenges are established in the legislation, and are subjected to rules made by courts.25 For example, in Victoria such challenges are established in section 42 of the Transfer-of- Land Act, 1958. A court can also adjust rights as between parties before it, and order changes to the register accordingly.

24

R. M. ABBEY & RICHARDS, M. BLACKSTONE'S GUIDE TO THE LAND REGISTRATION ACT 2002 (2002). C. HARPUM & J. BIGNELL, REGISTERED LAND: LAW AND PRACTICE UNDER THE LAND REGISTRATION ACT 2002 (2004).

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IV EVIDENTIARY EFFECT OF NON REGISTRATION OF DOCUMENTS

4.1 EFFECT OF NON REGISTRATION OF SALE A compulsorily registrable but unregistered deed of sale of specific property cannot affect the property and cannot be used to prove the sale26 though it is admissible for collateral purposes, for instance ascertaining he nature of purchasers possession27, or proving payment of purchase-money28, or for the purpose of proving dower and liability to pay it29. When a sale deed becomes inoperative by reason of non-registration no parol evidence of it is admissible30. The same holds even if there is part-performance31. An unregistered letter cannot be received as evidence to show that a registered saledeed was intended to operate only as a mortgage. Such an unregistered letter is inadmissible in evidence to show that no title passed under the sale-deed for that would amount using it as evidence of a transaction affecting immoveable property. But an unregistered document which merely shows that a registered sale-deed executed previously in respect of certain immoveable property was only nominal in its nature has been held to be admissible in evidence in as much as it is not used as evidence of any transaction affecting immoveable property32. The test to determine the admissibility is whether the document in question does not support or operate to create, declare or extinguish any right, title or interest in immoveable property. A sale-deed does create an interest in immoveable property. If a subsequent document purports to extinguish it must be registered.
26

Hushmat v. Jamir, AIR 1919 Cal. 325. Dawal v. Dharma, 19 Bom. LR 822. Sambu Hanmanta Kobal v. Nama Narayan Naikde, 13 Bom LR 867. Mohd. Quasim v. Ruqia Begum, AIR 1935 lah. 375. Somu Gurukhal v. Rangammal, 7 MHC 13. Jangir Singh v. Rulia, AIR 1954 Pepsu 133. Abdul v. Arlien, AIR 1915 Mad. 530.

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PROJECT SUBMISSION A document which gives, or purports to give a right to have immoveable property put to a sale with a view to the recovery, out of its proceeds, of money lent (principle and interest) is an instrument which creates an interest in immoveable property and as such cannot under Section 49 of the Act, be received in evidence without registration33. An unregistered sale-deed can be received as evidence of a contract in a suit for specific performance under Chapter II of the Hyderabad Relief Act or under Chapter II of the Specific Relief Act, 1877, or as evidence of part performance of the contract for the purpose of Section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument34. 4.2 EFFECT OF NON REGISTRATION OF LEASE A lease of immovable property, which is compulsorily registrable, if not registered, is void altogether35, and cannot be received in evidence to prove the transaction affecting the immoveable property to which it relates 36 or any of the terms if the transaction. 37 An unregistered document purporting to be lease of immoveable property is not admissible in evidence to prove the rent agreed to be paid38. It cannot be admitted in evidence to prove that a property to which it relates was let for a term of years39. 4.2.1 LEASE HOW MADE: EFFECT OF NON REGISTRATION OF DOCUMENTS An unregistered lease being inoperative, the express contractual lease did not take effect in law. It, therefore, follows from the observations that the plaintiff-respondents cannot ask for ejectment of the defendant-appellant solely on the basis of the duration c1ause in the unregistered deed. The unregistered deed can at best be looked into for ascertaining the

33

Kalachand v. Gopal Chander, AIR 1953 Hyd. 225. Hamda Ammal v. Avadippa Pathar, AIR 1953 Hyd. 225. Anand v. Taiyab, AIR 1949 All. 279. Vasudev Reddy v. Nalappa Reddy, AIR 1914 Mad. 349. Fatelal Shah v. Dayalal Bishrambhai, AIR 1949 Nag. 218. Atul Krishna v. Zayed, AIR 1941 Cal. 102. Moti Sagar v. Dhanna Mat., AIR 1922 Lah.

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PROJECT SUBMISSION commencement of possession, rate of rent or Similar other provisions which are collateral to the principal transaction40. The Privy Councl in Mitchel v. MathuraDas41, noted : 'The Registration Act was not passed to. avoid the mischief of allowing a man to be in possession of real property without having a registered deed, but as a check against the production of forged documents, and in order that subsequent purchasers, or persons to whom subsequent conveyances of property were made, should not be affected by previous conveyances unless those previous conveyances were registered." An unregistered lease deed executed from month to month for a period not exceeding 11 months, though reduced to writing and possession is delivered thereunder to a tenant is not compulsorily registerable instrument and therefore the prohibition contained in Sec 49 of the Registration Act is inapplicable. Therefore, the document is admissible in evidence to consider the effect of the immovable property contained therein or to receive as an evidence of any transaction vis-a-vis such property42. Non-registration of leases for immoveable property for a period less than a year and with an yearly rent of rupees fifty or below rupees fifty may not be hit by Sec. 49 of the Registration Act43. The position is well settled that an unregistered lease deed is not admissible to prove the terms, duration or nature of tenancy except the nature and character of possession of the lessees. The prohibition which is mandatory is contained in Sec. 49 (a) and (e) of the Registration Act. The creation of a tenancy can be proved by oral agreement or by acceptance of rent and that the right of occupancy being a creature of the statute can be acquired only under Sec. 24 of the Orissa Tenancy Act, 1913 and cannot be conferred by the landlord by contract or
40

Rai Chand v. Miss Chandra Kanta Khosla, AIR 1991 SC 744. 12 IA 150. Satish Lumar v. Zarif Ahmed, 1997 (1) UJ (SC) 576. Haji fateh Rather v. Anwar Sheikh, 1986 Kar. LJ 40.

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PROJECT SUBMISSION otherwise. In view of the admissibility of the unregistered lease-deed for the limited purpose as it is impossible to hold that the respondents acquired any occupancy right in the suit property. The disputed document, though inadmissible in evidence for the purpose of proving the terms and conditions of the document, can be admitted in evidence for collateral purpose of proving the factum of partition and nature of possession of the parties44. The document in question can certainly be looked into for collateral purpose viz. for the purpose of proving the character of possession45. If a lease deed contained a clause whereby the tenancy thereunder was absolutely determinable to any moment at the option of the lessor than the deed was not compulsorily registrable, notwithstanding that it also contained provisions for an "annual rental" and for payment of "rent in advance each year". There is a decision of the Allahabad High Court in Kishori v. Ram Swarup46, to the same effect. That was also a case where the lease deed fixed the annual rent but stipulated that in case of default the tenant would be liable to ejectment and that the lessor would always have a right to eject the tenant after giving him one month's notice. The Court held that the document did not require registration47. If a decree purporting to create a lease is inadmissible in evidence for want of registration, none of the terms of the lease can be admitted in evidence and that to use a document for the purpose of proving an important clause in the lease is not using it as a collateral purpose48. Unregistered document extinguishing lease is not admissible but can be used for collateral purpose to show handing over of possession49.

44

Kaheeda Mohn v. Md. Iqbal Ali, 1998 (5) ALT 704. P. Sankara Pandi Therav v. C. Arumugam, 1999 (2) MLJ 438. ILR (1996) 1 All, 229. TK Subramania Pillai v. Pennigton Committee, 1987 (2) MLJ 39. Bajaj Auto Ltd. v. Behari Lal Kohli, 39 (1989) DLT 55. Kovil Patti Sri Dhandayuthapati Trust v. M. Tilakraj, 1993 (1) MLJ 522 .

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PROJECT SUBMISSION An unregistered lease deed can be looked into for showing the nature and condition of the building as well as the purpose for which it was let out50. 4.3 EFFECT OF NON REGISTRATION OF MORTGAGE The transfer of mortgage to be effectual requires registration. An unregistered mortgage is not valid as a mortgage and cannot operate as a charge. When a suit is brought for money claim based on a covenant in a compulsorily registrable, but unregistered mortgage-deed, the deed is inadmissible to prove the covenant and hence the money claim51. It is also not admissible to prove the covenant for the payment of compound interest 52 . A suit by the mortgagor for redemption on the basis of an unregistered mortgage is not maintainable53. It is, of course, open to the mortgagor to file suit for the recovery of the possession of the property based on his title in which case it may be open to the defendant to plead that he had advanced moneys which though advanced on an invalid mortgage, must in equity be re-paid to him before the plaintiff takes possession of his lands54. Such cases will now be decided under Sec. 53-A of the Transfer of Property Act. Although a person cannot sue for redemption on the strength of an abortive or invalid usufructuary mortgage, yet if he sues for possession and proves his title and then the defendant sets up adverse possession, the plaintiff may prove that the character of the possession was not adverse by giving evidence of the factum of mortgage though not of its terms55. Where a person obtains possession under a void (unregistered) mortgage he acquires on the lapse of twelve years a prescriptive right to the limited interest by way of mortgage. An unregistered mortgage will be received as evidence of a personal obligation and will be admitted in evidence to prove the debt for the purpose of granting simple money decree, if the personal covenant to pay is separable from the creation of security56, but not if
50

Dhalli Devi v. (Firm) Gopal Iron trading Company & other, 1993 (2) Rent. LR 160. Mattogeny v. Ram Narain, ILR 4 Cal. 83. Swami Chetty v. Ethirajulu Naidu, 34 IC 583 . Sheikh Bhukhan Mian v. Srimati Radhika Kumari Debi, AIR 1938 Pat. 479. Maung Po Sin v. Mg. Po Sin AIR 1926 Assam 291 (FB). Halka v. Nannahon AIR 1932 All 259. Jagappa v. lachchappa ILR 5 Mad. 119.

51

52

53

54

55

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PROJECT SUBMISSION the transaction if indivisible and if the loan cannot be separated from the portion of document charging the poperty57. It may also be admissible in evidence to prove acknowledgment of the amount due under mortgage sufficient to save limitation. A compulsorily registrable but unregidtered deed of assignment of debt. Where in a mortgage the nature and terms of the security negative a personal liability to pay the debt and if the deed is inadmissible for want of registration as evidence of mortgage, it would not support a suit to recover the money. The document may be used to show the payment of consideration58. An invalid (unregistered) mortgage, though it cannot be admitted in evidence to prove initial delivery of possession, may be admissible in evidence for a collateral purpose to ascertain the nature and character of possession, and to determine to quantum of interest and the character of possession thereunder is not to use the document for the purpose of enforcing the mortgage itself under the document59. An unregistered payment on hypothecation bond is admissible as confirmatory proof of a fact provable orally60. 4.4 EFFECT OF NON REGISTRATION OF EXCHANGE In the case of Mahomed Yahia v. Bibi Soghra61, the exchange of shares between coowners has been held not to affect any immoveable property and an instrument of such exchange is admissible in evidence though it is not evidence by a registered instrument. A letter written by A, to the plaintiff embodied an agreement for the exchange of lands that fell to each other's share. It was held to create no interest in immoveable properly but was merely an evidence of agreement to convey lands and was admissible in evidence without registration62.

57

Mattogeney v. Ram Narain ILR 4 Cal. 667. Hanif Shah v. Murad, 16 IC 125. Rupa Nonia v. Ram Brich AIR 1959 Pat. 164. Venkataramma Naicker v. Chinnathsmbi Reddi, AIR 1999 SC 56. AIR 1937 Pat. 232. G. Rama Brahman v. G. Kottayya 21 IC 777.

58

59

60

61

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PROJECT SUBMISSION By virtue of Cl. (a) of Sec. 49 of the Registration Act, effect of the non-registration of the agreement to exchange would be that far from vesting any title in the immoveable property such a document cannot even affect such property. Indeed because of Cl. (c) of the said section such a document cannot be received as evidence of any transaction affecting such property and it; is common ground that the proviso to the section is not attracted63. 4.5 EFFECT OF NON REGISTRATION OF ACTIONABLE CLAIMS Only where the terms of the agreement had been incorporated in decree or order, registration of the agreement was unnecessary even with regard to immoveable property outside the scope of the particular suit in which the decree (or order) was passed, as the entire agreement must be considered to have been incorporated in the decree (or order), the decree (or order) being sufficient evidence of its terms. The learned judges did not choose to give the expression order or decree such a wide meaning as was given by the Bombay and Lahore High Courts. It is however, clear that the terms of the security bond were not embodied in any order of the Court. All that was done was that the security bond was accepted by the Court. This acceptance by itself, will not make the order as a substitute for the security bond. On the facts of the present case there can be no doubt that the liability under the security bond could not be enforced unless it was registered64. In Aribam Keshorjit Sarma v. Kanjangham Amu Singh65 under Sec. 35 of the Indian Stamp Act the Munsif was correct in calling upon the petitioner to deposit Rs. 34.50 towards the deficit stamp duty and penalty. If they are deposited, the document in question becomes validly stamped simple mortgage bond, still it can be relied on as evidence of the money debt. 4.6 EFFECT OF NON-REGISTRATION OF GIFT DEED A gift can be duly effected by a registered instrument whether it is accompanied by possession or not. An unregistered instrument of gift cannot be received as evidence of the gift. But it can go in not to prove any definite gift, but for what it is worth that there was talk
63

Nachhattar Singh v. Jagir Kaur AIR 1986 P. & H. 197. Narahariappa v. Mohd. Moulana AIR 1967 AP 5. AIR 1969 Manipur 23.

64

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PROJECT SUBMISSION of making some assignment at that date." An unregistered instrument purporting to be an instrument of gift of immoveable, property and actionable claims, does not necessarily fall as a gift of actionable claims, unless the donees getting of actionable claims is ,conditional on his also getting the immovables allotted to him. A registered document operates from the time from which it was intended to operate and not from the date of registration. A registered document, other than a will, relating to property, takes effect against any oral agreement relating to such property. However, when the oral agreement is accompanied by delivery of possession, then the oral agreement will prevail over the registered document.

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CONCLUSION

The provisions regarding registration of documents in India is rather elaborate, detailed and vast. The necessity of registration cannot be stressed upon enough. The Courts have taken an elaborate stand regarding the position of registered documents. A certain strictness has to be maintained to ensure that registerable documents need to registered to maintain absolute records of all land transactions happening within the state. This strictness can only be brought about by Courts of law. This state of strictness will lead to a position where every-one registers every document whether it is mandatory or not. This will lead to the creation of a smoother judicial system where unnecessary delays and side litigation is avoided on the basis of an invalid registration, wrongful registration or lack of registration. The massive judicial backlog is partly due to the lackadaisical attitude of the people who fail to register mandatory documents and when suits happen on those documents, there are delays due to additional litigation going on to admit a certain document as evidence.

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BIBLIOGRAPHY

BOOKS 1. A.K. BANERJEE, COMMENTARIES ON THE TRANSFER OF PROPERTY ACT (2007). 2. ALISON CLASKE, PROPERTY LAW (2005). 3. AVTAR SINGH, TRANSFER OF PROPERTY ACT (2007). 4. B. CHRISTOPHER MUELLER & LAIRD C. KIRKPATRICK, EVIDENCE (2009). 5. CROSS & TAPPER , EVIDENCE (8th ed. 1995). 6. G.P. TRIPATHI, TRANSFER PROPERTY ACT (2006). 7. H.P. GUPTA, LAW OF EVIDENCE (2007). 8. I.H. DENNIS, LAW OF EVIDENCE (2nd Ed. 2007). 9. M. MONIR, THE LAW OF EVIDENCE (14th Ed. 2006). 10. MALIK, THE REGISTRATION ACT, 1908 (2004). 11. P.P. SAXENA, PROPERTY LAW (2006). 12. PETER MURPHY, A PRACTICAL APPROACH TO EVIDENCE 1 (2nd ed. 1985). 13. PHIPSON, EVIDENCE (15th ed. 2000). 14. R.S. RAO, LECTURES ON TRANSFER OF PROPERTY (2006). 15. RATANLAL RANCHODDAS & DHIRAJLAL K. THAKORE, LAW OF EVIDENCE (2006). 16. SOLI J. SORABJEE, TRANSFER OF PROPERTY ACT (2004). 17. STEVE UGLOW, EVIDENCE: CASES AND MATERIALS (1997). 18. V. KRISHNAMCHARI, LAW OF EVIDENCE (2007). 19. VEPA P. SARATHI, LAW OF TRANSFER OF PROPERTY (2005). WEBSITES 1. www.google.com 2. www.manupatra.com 3. www.westlaw.com 4. www.books.google.com 5. www.westlawindia.com 6. www.ccs.org

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