Unregistered sale agreement may be used for a collateral purpose when sufficiently stamped, with no need for impounding.

An unregistered sale agreement executed on stamp paper carrying the prescribed duty was treated as sufficiently stamped under Article 5(j) of Schedule I of the Indian Stamp Act. The Madras High Court held that Section 49 of the Registration Act permits an unregistered document to be received in evidence for a collateral purpose, and where the document is not relied on as proof of completed transfer, impounding and sending it to the stamp authority was unnecessary. On those facts, the application to impound was rightly rejected and the revision was dismissed.

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Issues: Whether the unregistered sale agreement, written on stamp paper of the prescribed value, required impounding and could be sent to the stamp authority, and whether it could be admitted in evidence for a collateral purpose under the Registration Act.

Analysis: The document was found to have been executed on stamp paper carrying the duty prescribed for a sale agreement under Article 5(j) of Schedule I of the Indian Stamp Act, and was therefore treated as sufficiently stamped. The Court further held that Section 49 of the Registration Act permits an unregistered document to be received in evidence for a collateral transaction, and that when such a document is tendered not as proof of completed transfer but for a permissible collateral purpose, the question of impounding and sending it to the Deputy Collector did not arise.

Conclusion: The application to impound the document was rightly dismissed, and the revision petitioner was not entitled to interference.

Final Conclusion: The unregistered sale agreement was held admissible for a collateral purpose and was not liable to be impounded on the facts found, resulting in dismissal of the revision.

Ratio Decidendi: An unregistered document that is sufficiently stamped may be admitted for a collateral purpose under Section 49 of the Registration Act, and impounding is unnecessary where no deficiency in stamp duty is found.

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