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High Court of Karnataka · body

2025 DAILYLAW 70595 (KAR)

M C SOMASHEKAR v. OFFICIAL LIQUIDATOR

CA/326/2021 · 2025-09-18

E S Indiresh

body2025

Judgment text

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- 1 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE E.S.INDIRESH COMPANY APPLICATION NO.326 OF 2021 C/W COMPANY APPLICATION NO.419 OF 2022 IN COMPANY PETITION NO.02 OF 2000 IN CA.NO.326/2021 BETWEEN: 1. M.C. SOMASHEKAR S/O LATE P.M. CHANNABASAVANNA AGED ABOUT 64 YEARS R/AT NO.14, KALIDASA ROAD MYSURU - 570002. 2. M.C. SWARNALATHA W/O M. MANJUNATH & D/O LATE P.M.CHANNABASAVANNA AGED ABOUT 62 YEARS R/AT NO.472, 10TH MAIN R.M.V. EXTENSION BENGALURU - 560080. 3. M.C.MOHAN KUMARI W/O H.S.MAHADEVA PRASAD & D/O LATE P.M.CHANNABASAVANNA AGED ABOUT 60 YEARS R/AT NO.20, GAGANACHUMBI DOUBLE ROAD KUVEMPUNAGAR, MYSURU-570023. Digitally signed by SHARMA ANAND CHAYA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 4. M.C. MALLIKARJUN AGED ABOUT 58 YEARS R/AT NO.53/A, II CROSS KALIDASA ROAD JAYALAKSHMIPURAM MYSURU-570012. …APPLICANTS (BY SRI. B.K. SAMPATH KUMAR, SENIOR ADVOCATE FOR SRI. G.S. PRASANNA KUMAR, ADVOCATE) AND: OFFICIAL LIQUIDATOR HIGH COURT OF KARNATAKA, M/S. KIRLOSKAR INVESTMENT AND FINANCE LTD. (IN LIQUIDATION) CORPORATE BHAVAN NO.26-27, 12TH FLOOR RAHEJA TOWERS, M.G. ROAD BENGALURU - 560001. …RESPONDENT (BY MISS. KRUTIKA RAGHAVAN, ADVOCATE FOR OFFICIAL LIQUIDATOR) THIS COMPANY APPLICATION IS FILED UNDER RULES 6 AND 9 OF THE COMPANIES (COURT) RULES, 1959, PRAYING TO DIRECT THE RESPONDENT TO HANDOVER THE ORIGINAL TITLE DEEDS OF THE SCHEDULE PROPERTY BEARING NO.2997, TEMPLE ROAD, VANIVILAS MOHALLA, MYSURU-570002 MEASURING EAST:87.50 FT., WEST: 85.75 FT., NORTH: 160FT., AND SOUTH: 158.25 FT. TOTALLY MEASURING 13630 SFT OR 1266 SQ.MT. TO THE APPLICANTS HEREIN. IN CA.NO.419/2022 BETWEEN: OFFICIAL LIQUIDATOR - 3 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 HIGH COURT OF KARNATAKA, M/S. KIRLOSKAR INVESTMENT AND FINANCE LTD. (IN LIQUIDATION) CORPORATE BHAVAN NO.26-27, 12TH FLOOR RAHEJA TOWERS, M.G. ROAD BENGALURU - 560001. …APPLICANT (BY MISS. KRUTIKA RAGHAVAN, ADVOCATE FOR OFFICIAL LIQUIDATOR) AND: 1. M.C. SOMASHEKAR S/O LATE P.M. CHANNABASAVANNA AGED ABOUT 64 YEARS R/AT NO.14, KALIDASA ROAD MYSURU - 570002. 2. MR. M.C. MALLIKARJUN S/O LATE P.M. CHANNABASAVANNA R/AT NO.53/A, II CROSS KALIDASA ROAD JAYALAKSHMIPURAM MYSURU-570012. 3. MRS. M.C. SWARNALATHA W/O M. MANJUNATH & D/O LATE P.M.CHANNABASAVANNA # B 204, WHISPERING MEADOWS 1ST MAIN ROAD, DOLLARS COLONY RMV 2ND STAGE BENGALURU - 560094. 4. MRS. M.C. MOHAN KUMARI D/O LATE P.M.CHANNABASAVANNA R/AT NO.20, GAGANACHUMBI, DOUBLE ROAD, KUVEMPUNAGAR, MYSURU-570023. - 4 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 …RESPONDENTS (BY SRI. B.K. SAMPATH KUMAR, SENIOR ADVOCATE FOR SRI. G.S. PRASANNA KUMAR, ADVOCATE) THIS COMPANY APPLICATION IS FILED UNDER RULES 6 AND 9 OF THE COMPANIES (COURT) RULES, 1959, PRAYING TO DIRECT THE RESPONDENT TO CO-OPERATE AND OBTAIN NECESSARY CHANGES IN RELEVANT REVENUE RECORDS BEFORE THE APPROPRIATE AUTHORITY ON SCHEDULE 'A' PROPERTY SO THAT THE REVENUE RECORDS REFLECT THE NAME OF THE COMPANY IN LIQUIDATION AS THE OWNER OF THE SCHEDULE 'A' PROPERTY TO ENABLE THE OFFICIAL LIQUIDATOR TO BRING THE PROPERTY FOR A SALE WITH THE APPROVAL OF THIS HON'BLE COURT. THESE APPLICATIONS HAVING BEEN RESERVED FOR ORDERS, COMING ON FOR PRONOUNCEMENT, THIS DAY, E.S. INDIRESH J., MADE THE FOLLOWING: CORAM: HON'BLE MR. JUSTICE E.S.INDIRESH CAV ORDER 1. In CA No.326 of 2021, the applicants claim to be the children of late P. M. Channabasavanna and Smt. H.N. Saroja. It is stated that, father of the applicants acquired the property bearing No.2997, Temple Road, Vanivilasa Mohalla, Mysore as per registered Sale Deed dated 05.06.1982 (Annexure-A). It is further stated that, the applicants are co-owners of the aforementioned property. It is further stated that the, - 5 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 parents of the applicants had entered into Joint Development Agreement dated 30.06.1997 (Annexure-B) with M/s. Kirlosker Investments and Finance Ltd., (hereinafter referred to as Company in liquidation). The Company in liquidation failed to perform its obligation as per the terms and conditions stipulated in the Joint Development Agreement, and in this regard, father of the applicants addressed letter dated 28.02.1988 about the non-performance of the obligation by the Company in liquidation and also made a reference for revocation of Joint Development Agreement. In reply to the same, the Company in liquidation by reply dated 18.03.1998 expressed their inability to complete the project within stipulated period (Annexures-C and D respectively). Thereafter, legal notice dated 17.12.1999 (Annexure-E) was issued by the parents of the applicants. Father of the applicants-P.M. Channabasavanna died on 25.01.2000 - 6 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 and mother of the applicants-H.N. Saroja, died on 22.03.2001 and as such, the applicants succeed to the estate of the deceased parents. It is also stated that, negotiations were held with regard to construction of the building and an extent of 10045 Sq.Ft. in built up area was offered to the applicants in lieu of apartments to be constructed on the schedule property. In this regard, the Company in liquidation had paid the sale consideration of Rs.74,33,000/- to the applicants. It is the grievance of the applicants that, the Company in liquidation failed to handover the original title deeds and as such, it is contended that, no title has been transferred in favour of the Company in liquidation in terms of the unregistered Joint Development Agreement. It is further stated in the application that, on account of loss in the business, and financial crises, the Company in liquidation, suffered an order of winding up of the Company as per - 7 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 the order passed by this Court on 24.12.2010. Thereafter, learned Official Liquidator was appointed to look after the affairs of the company in liquidation, hence, it is the case of the applicants that as the agreements entered into between the father of the applicants with the Company under liquidation in terms of Joint Development Agreement dated 30.06.1997 was not materialised and same has not been acted upon by the parties and as such, the applicants presented CA No.326 of 2021 seeking direction to the learned Official Liquidator to return the original title deeds in respect of schedule property and also under takes to refund sum of Rs.74,33,000/- to the Company in liquidation. 2. In CA No. 419 of 2022, the applicant is learned Official Liquidator of the Company in liquidation, stated that, the parents of the applicants have entered - 8 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 into Joint Development Agreement dated 30.06.1997 with the Company in liquidation to develop a multi storied residential apartment and the Company was to complete the construction and handover the possession of the built up space to an extent of 33% in the Schedule Property to the parents of the applicants. In this regard, Company in liquidation entered into an agreement dated 09.09.1997 with M/s. Nadig Constructions and Company, and further contended that, the Company in liquidation unable to fulfil its obligation in handing over the share of the owners. It is also stated that bilateral negotiation has been made between the company under liquidation and owners of the schedule properties and certain adjustments were worked out as per the Exchange Agreement on 22.03.2001 in respect of schedule property. It is also stated that, this court by order dated 24.12.2010, ordered for winding up of the - 9 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 Company in liquidation and learned Official Liquidator has been appointed to discharge the affairs the Company under liquidation. It is the case of the applicant that, learned Official Liquidator was unaware about the Exchange Agreement made by the Company under liquidation with the legal representatives of the Joint Development Agreement partners. It is also stated that, at the intervention of this Court in CA No. 326 of 2021, the learned Official Liquidator was able to secure the copy of the Exchange Agreement dated 22.03.2022 (Annexure-A). It is further stated in the application that, sale deeds have been executed in favour of the respondents in respect of the 'B' Schedule Property, however, 'A' Schedule Property has been retained by the Company in liquidation. It is further stated that, there are more than 43000 deposit holders to the tune of more than 60 Crores, and therefore, it is the claim of the applicant- learned - 10 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 Official Liquidator that, a direction be issued to the respondents (legal representatives of the owners of the schedule property) to co-operate for necessary changes in the revenue records pertaining to the share of the Company under liquidation in respect of 'A' Schedule Property. Hence, learned Official Liquidator has filed CA No.419 of 2022. 3. Heard Sri. B. K. Sampath, Kumar learned Senior Counsel appearing on behalf of learned counsel Sri. G. S. Prasanna Kumar, for the applicants (legal representatives of the original owner) and Smt. Krutika Raghavan, learned counsel appearing for learned Official Liquidator. 4. Sri. B. K. Samapth Kumar, learned Senior Counsel for the applicants in CA No.326 of 2021 and respondents in CA No.419 of 2022 argued that, subject land is belong to the parents of the applicants. - 11 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 The applicants in CA No. 326 of 2021 disputes the claim made by the learned Official Liquidator based on the Joint Development Agreement, dated 30.06.1997 (Annexure-B in CA No. 326 of 2021). It is submitted that, the Joint Development Agreement dated 30.06.1997 is not a registered document, which requires compulsorily registration, as there is sharing of apartments, as per Clause 2 and 5 of the Joint Development Agreement, said to have been executed by the parents of the applicants in favour of M/s.Kirlosker Investments and Finance Ltd.,- the Company in liquidation. It is also submitted by the learned Senior Counsel that, since, the Company in liquidation did not comply with the terms and conditions stipulated in the Joint Development Agreement and further, parents of the applicants caused legal notice dated 17.12.1999 (Annexure-E in CA No.326 of 2021) terminating the Joint - 12 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 Development Agreement and to take legal action for recovery of damages as per Clause 'A' of the legal notice, (Annexure-E in CA No.326 of 2021) and therefore, argued that, the Joint Development Agreement is unsustainable and contrary to law. Referring to these aspects, the learned Senior Counsel appearing for the applicants submitted that, since the said document is inadmissible in evidence though marked during evidence not being used for collateral purpose, on account of the fact that, the said document is unregistered and therefore, it is contended that, the claim made by the learned Official Liquidator through the Company in liquidation requires to be dismissed and to direct the learned Official Liquidator to release the title deeds in favour of the applicants, being legal representatives of the deceased P.M. Chennabasavanna. It is also argued by the learned Senior Counsel, by referring to Section 17 and - 13 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 49 of the Registration Act, that, as the Joint Development Agreement dated 30.06.1997, (Annexure-B in CA No.326 of 2021) and Exchange Agreement dated 22.03.2001 (Annexure-A in CA No.419 of 2022), are unstamped and are not registered as required under law and therefore, sought for interference of this Court. It is also submitted by the learned Senior Counsel appearing for the applicants in CA No.326 of 2021, that, the defects in the alleged Joint Development Agreement dated 30.06.1997 and the Exchange Agreement dated 22.03.2001, which are compulsorily registrable documents are incurable and they have been marked during evidence erroneously, and therefore, as these documents are unregistered and undervalued documents, are inadmissible in evidence and no rights would be conveyed between the parties under those documents and in this regard, learned Senior Counsel - 14 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 places reliance on the judgment of the Hon'ble Supreme Court, in the case of Suraj Lamps And Industries Limited Vs. State of Haryana and Another reported in (2012) 1 SCC 656, in the case of Vinod Infra Developers Ltd vs. Mahaveer Lunia reported in AIR 2025 SC 2933, in the case of Sushil Kumar Agarwal vs. Meenakshi Sadhu and Others reported (2019) 2 SCC 241 and in the case of Shyam Narayan Prasad vs. Krishna Prasad and Others reported in (2018) 7 SCC 646. 5. Nextly it is contended by the learned Senior Counsel for the applicants that, mere marking of the alleged documents, referred to above, does not cure inadmissibility and as such, referred to the judgment of the Hon'ble Supreme Court n the case of G M Shahul Hameed vs. Jayanthi R Hegde reported in 2024 INSC 493, in the case of Hemendra Rasiklal - 15 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 Ghia vs. Subodh Mody reported in (2009) 2 AIR Bom R 296 (FB), and in the case of R.V.E. Venkatachala Gounder vs. Arulmigu Viswesaraswami & V.P. Temple and Another reported in (2003)8 SCC 752. It is also contended by the learned Senior Counsel for the applicants that, as the learned Official Liquidator neither sought for recovery of sale consideration nor cancellation of the sale deeds as required under Section 31 of the Specific Relief Act, and as such, submitted that the relief claimed by the learned Official Liquidator is barred by limitation and accordingly, sought for allowing CA No.326 of 2021 and to dismiss the CA No. 419 of 2022 filed by the learned Official Liquidator. 6. Per contra, Smt. Krutika Raghavan, learned counsel appearing for the applicant- Official Liquidator in CA No.419 of 2022 and respondent in CA No.326 of - 16 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 2021, submits that as per the Joint Development Agreement, the Company in liquidation was to complete the construction and to handover the possession of 33% of the subject land, to the original owners, however, as the contractor (M/s. Nadig Construction and Company) has failed to complete the project in time, resulting in non-fulfilment of obligations in the Joint Development Agreement. It is also argued that, 07 flats of 1045 Sf ft, along with respective car parking space in another location was allotted to the children of the agreement holders (Applicants in C A No. 326 of 2021), in exchange for giving up their claim in land in question and therefore, submitted that the respondents in the application have acquiesced their rights and title in respect of the schedule land and therefore, opposed the arguments of the learned Senior Counsel appearing for the applicants in CA No.326 of 2021. It is also argued by - 17 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 the learned Official Liquidator that, as per the order dated 24.12.2010 passed by this court, the Company in liquidation was wound up and further, learned Official Liquidator was unaware about the execution of Exchange Agreement dated 22.03.2001 by the respondent and the Company in liquidation and therefore, contended that, as the Company being partner to the Joint Development Agreement and Exchange Agreement and further, having taken benefit out of the Exchange Agreement, the application filed by the applicants in CA No.326 of 2021, does not survive for consideration. It is also argued by the learned counsel appearing for Official Liquidator that, the respondents have to co-operate for necessary modification in the revenue records, and if the application filed by the contesting respondents i.e. applicants in CA No.326 of 2021 is allowed and same would cause irreparable loss to the - 18 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 creditors/share holders of the Company in liquidation and accordingly, sought for dismissal of CA No.326 of 2021 and to allow CA No.419 of 2022 by directing the respondents to co-operate for change of revenue records in respect of schedule property. In order to buttress her arguments, learned Official Liquidator places reliance on the judgment of the Hon'ble Supreme Court in the case of R.V.E. Venkatachala Gounder vs. Arulmigu Viswesaraswami & V.P. Temple and Another reported in (2003) 8 SCC 752 and in the case of Korukonda Chalapathi Rao and Another vs. Korukonda Annapurna Sampath Kumar reported in (2022) 15 SCC 475. 7. Having heard the learned counsel appearing for the parties, I have carefully examined the original records. - 19 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 8. It is not in dispute that, the property bearing No.2997, Temple Road, Vanivilas Mohalla, Mysuru was acquired by P.M. Channabasavanna (father of the applicants in CA No.326 of 2021) as per the registered Sale Deed dated 05.06.1982. The said P.M. Channabasavanna entered into Joint Development Agreement dated 30.06.1997 (Annexure-A in CA No.326 of 2021) with M/s. Kirloskar Investments and Finance Limited (Company in Liquidation). Perusal of Clause 7 and 22 of the said Joint Development Agreement would indicate that, the Company under liquidation shall develop and deliver the Apartments to be constructed therein, within a period of 18 months from the commencement of the project. Perusal of the record would indicate that, the Company in liquidation failed to adhere to the terms and conditions of the Joint Development Agreement dated 30.06.1997. In the meanwhile, the said P.M. - 20 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 Channabasavanna addressed a letter dated 28.02.1998 to the Company in liquidation, calling for settlement of accounts on the ground of non- performance of their obligation as per terms and conditions of the Joint Development Agreement. Pursuant to the same, Company in liquidation, by its letter dated 18.03.1998 admitted their inability to complete the project as per the Joint Development Agreement and sought time to complete the project at the earliest. In the meanwhile, P.M. Channabasavanna issued a legal notice dated 17.12.1999 to the Company in liquidation, terminating the Joint Development Agreement dated 30.06.1997. It is also pertinent to mention here that, Reserve Bank of India, filed Company Petition No.2 of 2000 before this Court and sought for winding up of the Company in liquidation and this Court, after considering the report of the Committee of Management, by its order dated - 21 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 24.12.2010, ordered for winding up of the Company. The Official Liquidator attached to this Court was directed to take over the affairs of the Company in liquidation as per Section 449 of the Companies Act, 1956. It is also forthcoming from the records that, P.M. Channabasavanna died on 25.01.2000 and his wife - Smt. H.N. Saroja died on 22.03.2001 leaving behind their legal representatives, who are the applicants in CA No.326 of 2021 . In that view of the matter, it is not in dispute that, the applicants in CA No.326 of 2021, succeed to the estate of deceased P.M. Channabasavanna. It is also to be noted that, after the termination of the agreement by said P.M. Channabasavanna with the Company in liquidation, negotiations were held and some of the Apartments totalling to 10,045 Sq.ft. built up area in an alternate location -Hemavathi Apartments were offered to be acquired for the benefit of the applicants. The - 22 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 Company in liquidation had paid Rs.74,33,000/- to the applicants. It is also not in dispute that, the Company in liquidation, has not completed the project and therefore, the Joint Development Agreement dated 30.06.1997 was impliedly cancelled on account of not fulfilling the conditions mentioned therein. 9. It is pertinent to mention here that, at the time of recording of evidence, unregistered Joint Development Agreement dated 30.06.1997 was marked as Ex.P2 and further, unregistered Exchange Agreement dated 22.03.2001 was marked as Ex.R2 The entire case of the Official Liquidator is based on these two unregistered documents, wherein, the parents of the applicants in CA No.326 of 2021 - P.M. Channabasavanna and his wife Smt. H.N. Saroja entered into an agreement with the Company in liquidation to develop the schedule property. Perusal - 23 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 of the recitals in these two documents, reveals about conveyance of the portion of the property by P.M. Channabasavanna and H.N. Saroja, in favour of the Company under liquidation. It is also to be noted that, as per the Joint Development Agreement dated 30.06.1997, Clause 5, 9, 10, 12 and 22, provides for sharing of flats in the undivided portion of the land in question in the schedule property by the parties to the contract. Clause 15 of the Joint Development Agreement, stipulates that the Company in liquidation shall complete the entire project within a period of 18 months from the date of commencement of the project. Clause 16 of the Joint Development Agreement provides that the original title deeds of the schedule property shall be retained by the Company in liquidation. Indisputably, these two documents namely, Joint Development Agreement dated 30.06.1997 (Ex.P2) and Exchange Agreement dated - 24 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 22.03.2001 (Ex.R2) are unregistered. Taking into consideration the recitals of these two documents, as the owners of the schedule property conveying portion of the undivided interest in favour of the Company in liquidation, these two documents are compulsorily required to be registered under Section 17 of the Registration Act and duly stamped as per Section 5(f) of the Karnataka Stamp Act, 1957. In this regard, it is relevant to follow the declaration of law made by the Hon'ble Supreme Court in the case of Vinod Infra Developers Ltd (supra) wherein, paragraphs 9.13 and 9.24 of the Judgment reads as under: "9. **** 13. Recently in K.B. Shah and Sons (P) Ltd v. Development Consultant Ltd, this Court noticed the following statement of Mulla in his Indian Registration Act, (7th Edn., at p. 189): “The High Courts of Calcutta, Bombay, Allahabad, Madras, Patna, Lahore, Assam, Nagpur, Pepsu, Rajasthan, Orissa, Rangoon and Jammu & Kashmir; the former Chief Court of Oudh; the Judicial Commissioner's Court of Peshawar, Ajmer and Himachal Pradesh and the Supreme Court have held that a document which requires registration under Section 17 and which is not admissible for want of - 25 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 registration to prove a gift or mortgage or sale or lease is nevertheless admissible to prove the character of the possession of the person who holds under it……” This Court then culled out the following principles : (K.B. Saha Case, SCC p. 577, para 34) “1. A document required to be registered, if unregistered is not admissible into evidence under Section 49 of the Registration Act. 2. Such unregistered document can however be used as an evidence of collateral purpose as provided in the proviso to Section 49 of the Registration Act. 3. A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration. 4. A collateral transaction must be a transaction not itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immovable property of the value of one hundred rupees and upwards. 5. If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose.” * * * 24. We therefore reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance. Transactions of the nature of ‘GPA sales’ or ‘SA/GPA/WILL transfers’ do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immoveable property. The courts will not treat such transactions as completed or concluded - 26 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of section 53-A of the TP Act. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records. What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered assignment of lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales.” 10. It is held by the Hon'ble Supreme Court in the above case, that if a document requires compulsory registration and duly stamped, is an unregistered document and same is not admissible in evidence under Section 49 of the Registration Act. Even if such a document is unregistered, same shall be considered for proving a collateral transaction and such transaction not itself requires to be effected by a registered document and to prove the other documents independently. It is to be noted that, such inchoate document be referred for limited purpose - 27 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 only and same do not convey title or interest over the schedule property. 11. The Hon'ble Supreme Court in the case of Suraj Lamps And Industries Limited (supra), held that, the document which provides for transfer of ownership or interest in immovable property of value exceeding Rs.100/- is required to be compulsorily registered. In the case of Susheel Kumar Agarwal vs. Meenakshi Sadhu and Others reported in (2019) 2 SCC 241, at paragraph No.23 held as follows: "23. In the present case, the respondent agreed to pay the appellant the costs and expenses along with the agreed remuneration upon completion of the construction. If the respondent failed to pay, the appellant was entitled to realise its money by selling 58% of the total constructed area. Clauses 6, 10 and 11 of the agreement indicate that the respondent would retain 42% of the total constructed area and the balance 58% would remain secured for due payment of the construction costs. It was further agreed, that the total construction costs shall not exceed 58% of the constructed area. The intention of the parties is clear from the agreement. This was an agreement to carry out the construction of the building for which payment of the construction costs and agreed - 28 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 remuneration had to be made. The agreement did not create an interest in the land for the developer. If the payment due to the developer was made, there would arise no security interest. Moreover, the security interest in respect of 42% of the constructed area would arise only if the construction came up and the payment due to the builder was not made. In the present case, admittedly there is no construction at all." 12. It is also to be noted that, if a Joint Development Agreement involves transfer of rights in the built up area in an undivided share in the land in question, such transfer constitutes conveyance which requires compulsory registration under law. It is also to be noted that, Hon'ble Supreme Court in the case of Sham Narayan Prasad Vs. Krishna Prasad and Others, reported in (2018) 7 SCC 646, held that, Section 118 of the Transfer of Property Act read with Section 17 of the Registration Act, mandates compulsory registration of the Exchange of immovable property by the parties to the document in question. - 29 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 Paragraphs 18 to 22 of the Sham Narayan (supra), reads as under: "18. It is clear from this provision that where either of the properties in exchange are immovable or one of them is immovable and the value of anyone is Rs 100 or more, the provision of Section 54 of the TP Act relating to sale of immovable property would apply. The mode of transfer in case of exchange is the same as in the case of sale. It is thus clear that in the case of exchange of property of value of Rs 100 and above, it can be made only by a registered instrument. In the instant case, the exchange deed at Ext. P-2 has not been registered. 19. Section 49 of the Registration Act, 1908 provides for the effect of non-registration of the document, which is as under: “49. Effect of non-registration of documents required to be registered.—No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882), to be registered shall— (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:” 20. Section 17(1)(b) of the Registration Act mandates that any document which has the effect of creating and taking away the rights in respect of an immovable property must be registered and Section 49 of the Registration Act imposes bar on the admissibility of an unregistered document and deals with the documents that are required to be registered under Section 17 of the Registration Act. Since, the deed of exchange has the effect of creating and taking away the rights in respect of an immovable property, namely, RCC building, it - 30 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 requires registration under Section 17. Since the deed of exchange has not been registered, it cannot be taken into account to the extent of the transfer of an immovable property. 21. In Roshan Singh v. Zile Singh [Roshan Singh v. Zile Singh, AIR 1988 SC 881 : (1988) 2 SCR 1106] , this Court was considering the admissibility of an unregistered partition deed. It was held thus: (AIR p. 885, para 9) “9. … Section 17(1)(b) lays down that a document for which registration is compulsory should, by its own force, operate or purport to operate to create or declare some right in immovable property. … Two propositions must therefore flow: (1) A partition may be affected orally; but if it is subsequently reduced into a form of a document and that document purports by itself to effect a division and embodies all the terms of bargain, it will be necessary to register it. If it be not registered, Section 49 of the Act will prevent its being admitted in evidence. Secondary evidence of the factum of partition will not be admissible by reason of Section 91 of the Evidence Act, 1872.” (emphasis supplied) 22. It is clear from the above judgment that the best evidence of the contents of the document is the document itself and as required under Section 91 of the Evidence Act the document itself has to be produced to prove its contents. But having regard to Section 49 of the Registration Act, any document which is not registered as required under law, would be inadmissible in evidence and cannot, therefore, be produced and proved under Section 91 of the Evidence Act. Since Ext. P-2 is an unregistered document, it is inadmissible in evidence and as such it can neither be proved under Section 91 of the Evidence Act nor any oral evidence can be given to prove its contents. Therefore, the High Court has rightly discarded the exchange deed at Ext. P- 2." - 31 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 13. It is also relevant to mention that, if an unregistered document is marked during the trial, even in the absence of objection raised by the other side, same shall not cure inadmissibility of such document and such document is void and do not confer any rights to the parties. It is to be noted that, Hon'ble Supreme Court in the case of G.M. Shahul Hamid (supra), speaking through the Hon'ble Shri. Justice Dipankar Datta, at paragraphs 14 to 21, held as follows: "14. The Presiding Officer of a court being authorised in law to receive an instrument in evidence, is bound to give effect to the mandate of Sections 33 and 34 and retains the authority to impound an instrument even in the absence of any objection from any party to the proceedings. Such an absence of any objection would not clothe the Presiding Officer of the court with power to mechanically admit a document that is tendered for admission in evidence. The same limitation would apply even in case of an objection regarding admissibility of an instrument, owing to its insufficient stamping, being raised before a court of law. Irrespective of whether objection is raised or not, the question of admissibility has to be decided according to law. The Presiding Officer of a court when confronted with the question of admitting an instrument - 32 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 chargeable with duty but which is either not stamped or is insufficiently stamped ought to judicially determine it. Application of judicial mind is a sine qua non having regard to the express language of Sections 33 and 34 and interpretation of pari materia provisions in the Stamp Act, 1899 (“the 1899 Act” hereafter) by this Court. However, once a decision on the objection is rendered — be it right or wrong — Section 35 would kick in to bar any question being raised as to admissibility of the instrument on the ground that it is not duly stamped at any stage of the proceedings and the party aggrieved by alleged improper admission has to work out its remedy as provided by Section 58 of the 1957 Act. 15. Profitable reference may be made to the decision of this Court in Javer Chand v. Pukhraj Surana [Javer Chand v. Pukhraj Surana, 1961 SCC OnLine SC 22 : (1962) 2 SCR 333 : AIR 1961 SC 1655] . There, provisions of Section 36 of the 1899 Act, which is pari materia Section 35 of the 1957 Act, came up for consideration. A Bench of four Hon'ble Judges of this Court held [Javer Chand v. Pukhraj Surana, 1961 SCC OnLine SC 22 : (1962) 2 SCR 333 : AIR 1961 SC 1655] that when a document's admissibility is questioned due to improper stamping, it must be decided immediately when presented as evidence. The relevant paragraph is extracted hereunder : (SCC OnLine SC para 4) “4. … Where a question as to the admissibility of a document is raised on the ground that it has not been stamped, or has not been properly stamped, it has to be decided then and there when the document is tendered in evidence. Once the court, rightly or wrongly, decides to admit the document in evidence, so far as the parties are concerned, the matter is closed. Section 35 is in the nature of a penal provision and has far- reaching effects. Parties to a litigation, where such a controversy is raised, have to be circumspect and the party challenging the admissibility of the document has to be alert - 33 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 to see that the document is not admitted in evidence by the court. The court has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case. The record in this case discloses the fact that the hundis were marked as Exts. P-1 and P-2 and bore the endorsement “admitted in evidence” under the signature of the court. It is not, therefore, one of those cases where a document has been inadvertently admitted, without the court applying its mind to the question of its admissibility. Once a document has been marked as an exhibit in the case and the trial has proceeded all along on the footing that the document was an exhibit in the case and has been used by the parties in examination and cross-examination of their witnesses, Section 36 of the Stamp Act comes into operation. Once a document has been admitted in evidence, as aforesaid, it is not open either to the trial court itself or to a court of appeal or revision to go behind that order. Such an order is not one of those judicial orders which are liable to be reviewed or revised by the same court or a court of superior jurisdiction.” (emphasis ours) 16. Once again, addressing a matter concerning Section 36 of the 1899 Act, a Bench of three Hon'ble Judges of this Court in Ram Rattan v. Bajrang Lal [Ram Rattan v. Bajrang Lal, (1978) 3 SCC 236] held as follows : (SCC pp. 239-40, para 6) “6. When the document was tendered in evidence by the plaintiff while in witness box, objection having been raised by the defendants that the document was inadmissible in evidence as it was not duly stamped and for want of registration, it was obligatory upon the learned trial Judge to apply his mind to the objection raised and to decide the objects in accordance with law. Tendency sometimes is to postpone the decision to avoid interruption in the process of - 34 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 recording evidence and, therefore, a very convenient device is resorted to, of marking the document in evidence subject to objection. This, however would not mean that the objection as to admissibility on the ground that the instrument is not duly stamped is judicially decided; it is merely postponed. In such a situation at a later stage before the suit is finally disposed of it would nonetheless be obligatory upon the court to decide the objection. If after applying mind to the rival contentions the trial court admits a document in evidence, Section 36 of the Stamp Act would come into play and such admission cannot be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped. The court, and of necessity it would be the trial court before which the objection is taken about admissibility of document on the ground that it is not duly stamped, has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case and where a document has been inadvertently admitted without the court applying its mind as to the question of admissibility, the instrument could not be said to have been admitted in evidence with a view to attracting Section 36 (see Javer Chand v. Pukhraj Surana [Javer Chand v. Pukhraj Surana, 1961 SCC OnLine SC 22 : (1962) 2 SCR 333 : AIR 1961 SC 1655] ). The endorsement made by the learned trial Judge that “Objected, allowed subject to objection”, clearly indicates that when the objection was raised it was not judicially determined and the document was merely tentatively marked and in such a situation Section 36 would not be attracted.” (emphasis ours) 17. The pivotal aspect emerging for consideration on the terms of Sections 33 and 34 of the 1957 Act, with which we are concerned, is that whether the trial court did judicially - 35 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 determine the question of admissibility. It is here that we need to ascertain the rationale behind the trial court's approach to go behind admission of the GPA in evidence and marking thereof as an exhibit, leading to the order under challenge before the High Court. Relevant portions of the order of the trial court read thus: “2.*** There are two suits before this Court, one is the present suit and another suit is OS No. 301/03. In the present suit, the GPA holder of plaintiff filed an affidavit by way of chief examination in the morning session and the documents were marked. While marking the documents he was held up in the Court of Civil Judge (Junior Division), Mangalore and hence no objection regarding the deficiency of stamp duty on GPA could be raised before this Court. Accordingly the matter has been adjourned for cross-examination of PW 1. The alleged GPA is in favour of third party with power to sell the property and hence Article 41 of the Karnataka Stamp Act, 1957 is applicable and stamp duty on the market value has to be paid on the same. The GPA is executed on a stamp paper of value of Rs 100 only. As per Section 33 of the Karnataka Stamp Act, 1957, the court shall impound the said GPA even without the objections by the advocate for 1st defendant. His absence at the time of chief examination of PW 1 is not intentional but as he was held up in another court. 3. The 1st defendant has also filed IA No. IX under Section 114, read with Section 151CPC to review the order of marking Ext. P- 2 which is insufficiently stamped and to hear the objections regarding inadequacy of stamp duty on the similar grounds. *** 7. The points that arise for consideration are: 1. Whether Ext. P-2 GPA is insufficiently stamped and plaintiff is liable to pay deficit duty and penalty? - 36 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 2. Whether the order permitting the plaintiff to mark the document requires to be reviewed? 8. The points are answered in affirmative for the following: Reasons 9. *** The clauses are very specific that the power of attorney has been given powers to sell the properties and the power of attorney has acted upon the GPA and has executed the sale deed in favour of the plaintiff as per Ext. P-3. Under Article 41(e), when the power of attorney is given for consideration and authorising the attorney to sell the immovable property, the duty payable is same duty as a conveyance for a market value equal to the amount of the consideration. As stated above, no consideration has been mentioned in the GPA, but the GPA has been given authorising to sell the immovable property. The GPA has been issued to a third party, … Article 41(ab) is applicable. The learned counsel for the plaintiff objected for considering these applications on the ground that the document is already marked without any objections and hence the question of reviewing the order considering the question of stamp duty at this stage does not arise. As seen from the order-sheet, the plaintiff was examined on 6-6-2010 and document was marked on same day. Immediately on the next date of hearing the counsel has filed IAs Nos. IX and X to consider the aspect of payment of stamp duty and penalty i.e. on the day on which the matter was posted for cross-examination of PW 1. It is certain that the Senior Counsel appearing for the plaintiff was not present at the time of examination of PW 1 in chief as the court remembers that the junior counsel was present and probably being unaware of the question of stamp duty has not raised any objections. The court has marked the document as an exhibit and has put the seal for having marked the document as to who - 37 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 has produced the document and admitted through which witness and marked for plaintiff. No doubt, there is mention that the document is admitted through PW 1 and Ext. P-2, but the court has not applied its mind while marking the document as to whether document is sufficiently stamped or insufficiently stamped. 10.***The circumstances under which the application is being filed and circumstances under which the document came to be marked, clearly show that the document was marked without application of the mind of the court and without objection of the other side and this Court is of the view that the admissibility of the document could be considered at this stage. ORDER IAs Nos. IX and X are allowed.” (emphasis supplied) 18. On the face of such an order, it does not leave any scope for doubt that on the date the GPA was admitted in evidence and marked as an exhibit, the trial court did not deliberate on its admissibility, much less applied its judicial mind, resulting in an absence of judicial determination. In the absence of a “decision” on the question of admissibility or, in other words, the trial court not having “decided” whether the GPA was sufficiently stamped, Section 35 of the 1957 Act cannot be called in aid by the respondent. For Section 35 to come into operation, the instrument must have been “admitted in evidence” upon a judicial determination. The words “judicial determination” have to be read into Section 35. Once there is such a determination, whether the determination is right or wrong cannot be examined except in the manner ordained by Section 35. However, in a case of “no judicial determination”, Section 35 is not attracted. 19. In the light of the aforesaid reasoning of the trial court of admitted failure on its part to - 38 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 apply judicial mind coupled with the absence of the counsel for the appellant before it when the GPA was admitted in evidence and marked exhibit, a factor which weighed with the trial court, we have no hesitation to hold that for all purposes and intents the trial court passed the order dated 19-10-2010 in exercise of its inherent power saved by Section 151 CPC, to do justice as well as to prevent abuse of the process of court, to which inadvertently it became a party by not applying judicial mind as required in terms of Sections 33 and 34 of the 1857 Act. We appreciate the approach of the trial court in its judicious exercise of inherent power. 20. Reference to Section 58 of the 1957 Act by the learned counsel for the respondent is without substance. The clear language of Section 58 refers to a situation, where an order is passed admitting an instrument in evidence as duly stamped or as one not requiring a stamp, for its attraction. As is evident from a bare reading of the order dated 19-10-2010, the trial court did neither hold the GPA as duly stamped or as not requiring a stamp and, therefore, its applicability was not attracted. 21. We may not turn a blind eye to the fact that the Revenue would stand the risk of suffering huge loss if the courts fail to discharge the duty placed on it per provisions like Section 33 of the 1957 Act. Such provision has been inserted in the statute with a definite purpose. The legislature has reposed responsibility on the courts and trusted them to ensure that requisite stamp duty, along with penalty, is duly paid if an unstamped or insufficiently stamped instrument is placed before it for admission in support of the case of a party. It is incumbent upon the courts to uphold the sanctity of the legal framework governing stamp duty, as the same are crucial for the authenticity and enforceability of instruments. Allowing an instrument with insufficient stamp duty to pass unchallenged, merely due to - 39 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 technicalities, would undermine the legislative intent and the fiscal interests of the State. The courts ought to ensure that compliance with all substantive and procedural requirements of a statute akin to the 1957 Act are adhered to by the interested parties. This duty of the court is paramount, and any deviation would set a detrimental precedent, eroding the integrity of the legal system. Thus, the court must vigilantly prevent any circumvention of these legal obligations, ensuring due compliance and strict adherence for upholding the rule of law." 14. The Hon'ble Supreme Court in the case of Venkatachala Goundar (supra), at paragraph 20, held as follows: "20. The learned counsel for the defendant- respondent has relied on Roman Catholic Mission v. State of Madras [AIR 1966 SC 1457] in support of his submission that a document not admissible in evidence, though brought on record, has to be excluded from consideration. We do not have any dispute with the proposition of law so laid down in the abovesaid case. However, the present one is a case which calls for the correct position of law being made precise. Ordinarily, an objection to the admissibility of evidence should be taken when it is tendered and not subsequently. The objections as to admissibility of documents in evidence may be classified into two classes: (i) an objection that the document which is sought to be proved is itself inadmissible in evidence; and (ii) where the objection does not dispute the admissibility of the document in evidence but is directed towards the mode of proof alleging the same to be irregular or insufficient. In the first case, merely because a document has been marked as “an exhibit”, an objection as to its admissibility is not excluded and is available to be raised even at a later stage - 40 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 or even in appeal or revision. In the latter case, the objection should be taken when the evidence is tendered and once the document has been admitted in evidence and marked as an exhibit, the objection that it should not have been admitted in evidence or that the mode adopted for proving the document is irregular cannot be allowed to be raised at any stage subsequent to the marking of the document as an exhibit. The latter proposition is a rule of fair play. The crucial test is whether an objection, if taken at the appropriate point of time, would have enabled the party tendering the evidence to cure the defect and resort to such mode of proof as would be regular. The omission to object becomes fatal because by his failure the party entitled to object allows the party tendering the evidence to act on an assumption that the opposite party is not serious about the mode of proof. On the other hand, a prompt objection does not prejudice the party tendering the evidence, for two reasons: firstly, it enables the court to apply its mind and pronounce its decision on the question of admissibility then and there; and secondly, in the event of finding of the court on the mode of proof sought to be adopted going against the party tendering the evidence, the opportunity of seeking indulgence of the court for permitting a regular mode or method of proof and thereby removing the objection raised by the opposite party, is available to the party leading the evidence. Such practice and procedure is fair to both the parties. Out of the two types of objections, referred to hereinabove, in the latter case, failure to raise a prompt and timely objection amounts to waiver of the necessity for insisting on formal proof of a document, the document itself which is sought to be proved being admissible in evidence. In the first case, acquiescence would be no bar to raising the objection in a superior court." - 41 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 15. The Full Bench of the Bombay High Court in the case of Hemendra Rasiklal (supra) at paragraphs 55 to 62 and at paragraphs 73 and 74, held as follows: "55. The admissibility of the document in evidence may be broadly classified into three classes-(i) that objection to the document which is sought to be proved is itself insufficiently stamped and the objection relates to deficiency of stamp duty of the document; (ii) where the objection does not dispute admissibility of document in evidence but is directed towards the mode of proof alleging the same to be irregular or insufficient; and (iii) the objection that the document which is sought to be proved is ab initio inadmissible in evidence. 56. In the first case, the Court, before which the objection is taken about admissibility of document on the ground that it is not duly stamped, has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case as held by the Constitution Bench in Zaver Chand v. Pukhraj Surana (supra). Once a document has been marked as an exhibit in the case and has been used by the parties in examination and cross-examination of their witnesses, section 36 comes into operation. 57. Once a document has been admitted in evidence, as aforesaid, it is not open either to the trial Court itself or to a Court of Appeal or Revision to go behind that order. Such an order is not one of those judicial orders which are liable to be reviewed or revised by the same Court or a Court of superior jurisdiction. Similar view is expressed by the Supreme Court in the case - 42 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 of Bipin Shantilal Panchal (supra); wherein it is made clear that if the objection relates to deficiency of stamp duty of a document, the Court has to decide the objection before proceeding further. In the case of Ram Ratan v. Bajarang Lal (supra) the Apex Court reiterating the above view has observed that the Court, as of necessity it would be trial Court, before which the objection is taken about admissibility of document on the ground that it is not duly stamped, has to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case. 58. So the objection relating to deficiency of duty cannot be raised or decided at the later stage of the suit. It has to be decided there and then unless taken on record subject to objection so as to avoid the rigour of section 36 of the Stamp Act. In the second category of the case, the objection should be taken when the evidence is tendered. Once the document has been admitted in evidence and marked as an exhibit, the objection that it should not be admitted in evidence or that the mode adopted for proving the document is irregular cannot be allowed to be raised at any stage subsequent to the marking of the document as an exhibit. This proposition is rule of fair play. The crucial test is whether an objection, if taken at the appropriate point of time, would enable the party tendering the evidence to cure the defect and resort to such mode of proof as would be regular. 59. The omission to object become fatal because by his failure the party entitled to object allows the party tendering the evidence to act on an assumption that the opposite party is not - 43 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 serious about the mode of proof. On the other hand, a prompt objection does not prejudice the party tendering the evidence, for two reasons; firstly, it enables the Court to apply its mind and pronounce its decision on the question of admissibility there and then; and secondly, in the event of finding of the Court on the mode of proof sought to be adopted going against the party tendering the evidence, the opportunity of seeking indulgence of the Court for permitting a regular mode or method of proof and thereby removing the objection raised by the opposite party, is available to the party leading the evidence. Failure to raise a prompt and timely objection amounts to waiver of the necessity for insisting on formal proof of a document, the document itself which is sought to be proved being admissible in evidence. 60. If the objection to the proof of document is not decided and the document is taken on record giving tentative exhibit, then the right of the cross-examiner is seriously prejudiced. Once the document is used in cross-examination, then the document gets proved and can be read in evidence as held by the Supreme Court in the case of Ram Janki Devi v. Juggilal Kamlapat, 1971 (1) SCC 477. If the cross-examiner decides not to cross-examine based on unexhibited document and, ultimately, at the fag end of the trial, the document is held to be admissible and proved, then, the cross-examiner as a rule of fair play would be entitled to further opportunity to cross- examine based on that document resulting in delayed trial defeating the very object and purpose of the amendment to the Civil Procedure Code. 61. In the third case merely because a document has been marked as “an exhibit”, an objection as to its admissibility is not excluded. It is available to be raised even at later stage or even in appeal or revision. There is no question of inadmissible documents being read into evidence - 44 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 merely on account of such documents being given exhibit numbers in affidavit filed by in examination-in-chief or while recording oral evidence. For example in case of unregistered sale-deed or gift-deed or lease-deed requiring registration, no evidence of the terms thereof can be given. On the ground of public policy, evidence derived from unpublished official records of the State cannot be given except with the permission of the head of the department concerned as laid down under section 123 of the Evidence Act. 62.Such a document, therefore, can be tentatively exhibited and the decision thereon can be postponed till the suit reaches the stage of judgment. However such objection has also to be decided before the judgment is delivered. The objection to the admissibility of such evidence can always be taken at any stage of the suit. Thus, we hold and rule that ordinarily an objection to the admissibility of the document in first and second categories of cases (excluding third type of case) has to be taken before the document is exhibited which, necessarily, postulates decision on the objection then and there. * * * 73. However, by way of exception, the objection relating to the admissibility of the document requiring resolution of complex issues, having effect of arresting progress of the matter, or if the admissibility of the evidence is dependent on receipt of further evidence, then, in such cases the trial Court can, in the interest of justice, defer the issue of deciding admissibility of the document. In Ram Ratan v. Bajarang Lal (supra), the Supreme Court has also observed that in a given circumstance a document can be exhibited with the endorsement made by the learned trial Judge “objected, allowed subject to objection”, clearly indicating that the objection has not been judicially determined and the document was - 45 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 tentatively marked. This procedure is to be followed only in exceptional circumstances. Ordinarily, the objection to the admissibility of the document should be decided as and when raised without reserving the question as to admissibility of the document until final judgment in the case. We may make it clear that omission to object to a document, which in itself is inadmissible in evidence, would not constitute such document in evidence. 74. It is also duty of the Court to exclude all irrelevant evidence even if no objection is taken to its admissibility by the parties. The question of relevancy of the document being a question of law can be raised and decided at any stage of the proceeding." 16. Following the declaration of law referred to above, I am of the opinion that, though the Joint Development Agreement and Exchange Agreement, were marked despite being unregistered and not duly stamped, do not confer any right or interest to the parties in those documents. 17. Nextly, it is relevant to mention the Judgment of the Hon'ble Supreme Court in the case of K.B. Saha and Sons Private Limited vs. Development Consultant Limited reported in (2008) 8 SCC - 46 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 564, wherein, at paragraphs 23, 24, 26, 33 and 34 held as follows: "23. Another section which would also be material for us to decide this appeal is Section 49 of the Registration Act which runs as under: “49. Effect of non-registration of documents required to be registered.—No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882) to be registered shall— (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered: Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (1 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument.” 24. Having heard the learned counsel for the appellant and after going through the judgment of the High Court as well as of the trial court, we do not find any ground for which interference can be made with the judgment of the High Court. * * * 26. The High Court in the impugned judgment has come to a conclusion that the decision in Juthika Mulick case [(1995) 1 SCC 560 : AIR 1995 SC 1142] cannot be of any benefit to the appellant on the ground that in Juthika Mulick case [(1995) 1 SCC 560 : AIR 1995 SC 1142] the respondent had leased out the premises in - 47 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 question in favour of the lessee under a registered deed of sale whereas in the instant case, the lease deed was not registered. The High Court has observed that the lease agreement between the parties was in effect an agreement for lease of the suit premises and was unregistered. Relying on Section 49 of the Registration Act, the High Court observed that a document purporting to be a lease and required to be registered under Section 107 of the Transfer of Property Act is not admissible in evidence if it is not registered. Proviso to Section 49, however, provides that although a lease deed falling under the provision of Section 107 of the Transfer of Property Act will not be admissible in evidence if the same is not registered but that deed may be used as evidence of any collateral transaction not required to be effected by a registered instrument. Therefore, the High Court observed that the question to be decided in this appeal is whether the conditions noted in the lease deed could be looked into for determining the question that the tenancy in question would be used only for the purpose of occupation of the named officer of the respondent. * * * 33. In Rana Vidya Bhushan Singh v. Ratiram [(1969) 1 UJ 86 (SC)] the following has been laid down: “A document required by law to be registered, if unregistered, is inadmissible as evidence of a transaction affecting immovable property, but it may be admitted as evidence of collateral facts, or for any collateral purpose, that is for any purpose other than that of creating, declaring, assigning, limiting or extinguishing a right to immovable property. As stated by Mulla in his Indian Registration Act, 7th Edn., at p. 189: q‘The High Courts of Calcutta, Bombay, Allahabad, Madras, Patna, Lahore, Assam, Nagpur, Pepsu, Rajasthan, Orissa, Rangoon and Jammu & Kashmir; the former Chief Court of Oudh; the Judicial Commissioner's Court of - 48 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 Peshawar, Ajmer and Himachal Pradesh and the Supreme Court have held that a document which requires registration under Section 17 and which is not admissible for want of registration to prove a gift or mortgage or sale or lease is nevertheless admissible to prove the character of the possession of the person who holds under it.’ ” 34 [Ed.: Para 34 corrected vide Official Corrigendum No. F.3/Ed.B.J./76/2008 dated 15- 9-2008.] . From the principles laid down in the various decisions of this Court and the High Courts, as referred to hereinabove, it is evident that: 1. A document required to be registered, if unregistered is not admissible into evidence under Section 49 of the Registration Act. 2. Such unregistered document can however be used as an evidence of collateral purpose as provided in the proviso to Section 49 of the Registration Act. 3. A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration. 4. A collateral transaction must be a transaction not itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immovable property of the value of one hundred rupees and upwards. 5. If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose." - 49 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 18. The Hon'ble Supreme Court in the case of Korukonda Chalapathi (supra) at paragraphs 26, 27 and 31 held as follows: "26. Section 49(c) of the Registration Act prohibits the admitting of compulsorily registrable documents which are unregistered as evidence of any transaction affecting immovable property unless it has been registered. In the very same judgment, we notice the following discussion : (Murdga Mudaliar case [Murdga Mudaliar v. Subba Reddiar, 1950 SCC OnLine Mad 136 : AIR 1951 Mad 12] , SCC OnLine Mad) “… The other consequence of non- registration is to prohibit the document from being received not “in” evidence, but “as” evidence of any transaction affecting such property. The emphasis on the word “as” was, in my opinion, rightly laid by Venkatasubba Rao, J. in Atluru Saraswatamma v. Atluru Paddayya [Atluru Saraswatamma v. Atluru Paddayya, 1922 SCC OnLine Mad 203 : ILR (1923) 46 Mad 349 : AIR 1923 Mad 297] , where the learned Judge observed : (SCC OnLine Mad) ‘What is prohibited by the section is receiving a document as evidence of a transaction, not merely receiving it in evidence that is, as a piece of evidence having a bearing on the question to be ultimately decided.’ In other words, the prohibition is to prevent a person from establishing, by the use of the document in evidence a “transaction, affecting immovable property”. A person should not be permitted to establish indirectly by use of the document what he is prevented from doing directly under Clause (a).” (emphasis in original and supplied) - 50 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 27. The proviso carves out two exceptions. We are only concerned, in this case, with only one of them and that is contained in the last limb of the proviso. The unregistered document can be used as evidence of any collateral transaction. This is, however, subject to the condition that the said collateral transaction should not itself be one which must be effected by a registered document. It is this expression contained in the proviso which leads us to ask the question as to what would constitute a collateral transaction. If it were collateral transaction, then an unregistered document can indeed be used as evidence to prove the same. Would possession being enjoyed or the nature of the possession on the basis of the unregistered document, be a transaction and further would it be a collateral transaction? We pose this question as the contention of the appellants is that even if the Khararunama dated 15-4-1986 cannot be used as evidence to prove the factum of relinquishment of right which took place in the past, the Khararunama can be looked into to prove the conduct of the parties and the nature of the possession which was enjoyed by the parties. * * * 31. This is significant for the reason that the law is not that in every case where a party sets up the plea that the court may look into an unregistered documents to show the nature of the possession that the court would agree to it. The cardinal principle would be whether by allowing the case of the party to consider an unregistered document it would result in the breach of the mandate of the Section 49 of the Registration Act." 19. In the light of the aforementioned declaration of law made by the Hon'ble Supreme Court, since the Joint Development Agreement dated 30.06.1997 - 51 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 (Ex.P2) and Exchange Agreement dated 22.03.2001 (Ex.R2), which are compulsorily requires registration and duly stamped before admitting in evidence at the time of marking and in the absence of such procedure at the time of marking of these two unregistered documents, I am of the view that, these two documents cannot be considered as to be Deed of Conveyance under the provisions of the Transfer of Property Act. It is well settled principle in law that if a statutory provision prescribes a particular procedure to be followed by the authority or the Courts to do an act, it should be done in that particular manner only. This aspect of the matter was considered by the Hon'ble Supreme Court in the case of Mackinnon Mackenzie and Company Limited vs. Mackinnon Employees Union reported in (2015) 4 SCC 544. In that view of the matter, since these two alleged documents were marked in the absence of the - 52 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 objection at the time of marking during evidence and such documents are held to be void ab intio as there is no conveyance of the property between the parties to the agreement/contract. Though the learned Official Liquidator referred to the Judgment of the Hon'ble Supreme Court in the case of Bhagwat Sharan (D) through LR's vs. Purushottam and Others reported in (2020) 6 SCC 387 and argued that the doctrine of election is a facet of law of estoppel and the applicants in CA No.326 of 2021 having acted upon as per Exchange Agreement, can not be permitted to blow hot and cold simultaneously, to seek quashing of the said document and the said submission cannot be accepted on the sole ground that these two documents are void and do not confer any legal right on the parties on account of non- registration and insufficiently stamped. In that view of the matter, I find force in the submission made by - 53 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 the learned Senior Counsel appearing for the applicants in CA No.326 of 2021 as no estoppel could operate against a Statute and if any act is contrary to law as well as any provision in a Statute and such acts are unenforceable in law and there is no promissory estoppel against such inadmissible documents. (See. (2012) 11 SCC 1). Therefore, I am of the opinion that the applicants in CA No.326 of 2021 have made out a case for interference to direct the Company in liquidation to return the original title deeds to the legal representatives of deceased P.M. Channabasavanna and Smt. H.N. Saroja. In this regard, the arguments advanced by learned Official Liquidator based on the Joint Development Agreement dated 30.06.1997 and Exchange Agreement dated 22.03.2001, cannot be accepted as those documents do not confer legal rights to the parties to the contract. Be that as it may, if the arguments advanced by the learned - 54 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 Official Liquidator is accepted, nothing is produced before this Court as to the cancellation of deeds in question as required under Section 31 of the Specific Relief Act and such efforts made by the Company in liquidation as well as learned Official Liquidator. In that view of the matter, on assessing the entire case of the parties, based on the dictum of the Hon'ble Supreme Court referred to above, the application in CA No.326 of 2021 has to be accepted by dismissing CA No.419 of 2022 filed by the Official Liquidator. 20. In the result, I pass the following: ORDER i) The application in CA 326 of 2021 filed by the applicants is allowed. ii) The respondent - Official Liquidator is directed to handover the original title deeds of the schedule property bearing No.2997, - 55 - HC-KAR NC: 2025:KHC:37548 CA No.326 of 2021 C/W CA No.419 of 2022 In COP No.02/2000 Temple Road, Vanivilasa Mohalla, Mysuru, to an extent of 13630 Sq.Ft. to the applicants in CA No.326 of 2021 within four weeks from the receipt of certified copy of this order. iii) The application in CA No.419 of 2022 filed by the Official Liquidator is hereby dismissed. SD/- (E.S.INDIRESH) JUDGE SB List No.: 2 Sl No.: 25