Unregistered and insufficiently stamped sale deed cannot prove possession where possession is integral to the sale transaction.

An insufficiently stamped instrument is inadmissible in evidence until deficit duty and penalty are paid under the Indian Stamp Act, and a document required to be registered is barred from evidence under the Registration Act unless a statutory exception applies. A collateral purpose must be independent of the main transaction; where possession is integral to the alleged sale, it cannot be proved through an unregistered document under the guise of collateral use. The order allowing marking of the sale deed for collateral purpose was therefore set aside.

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Issues: (i) Whether an unregistered and insufficiently stamped sale deed could be received in evidence for any purpose. (ii) Whether such a document could nonetheless be marked for the collateral purpose of proving possession.

Issue (i): Whether an unregistered and insufficiently stamped sale deed could be received in evidence for any purpose.

Analysis: Section 35 of the Indian Stamp Act, 1899 makes an insufficiently stamped instrument inadmissible for any purpose until the deficit duty and penalty are paid. The defect is curable, but until cure, the document cannot be acted upon in evidence. Likewise, Section 49 of the Registration Act, 1908 bars reception in evidence of a document required to be registered unless it is registered, subject only to the statutory exceptions in the proviso.

Conclusion: The unregistered and insufficiently stamped sale deed was not admissible in evidence.

Issue (ii): Whether such a document could nonetheless be marked for the collateral purpose of proving possession.

Analysis: A collateral transaction must be independent of, or divisible from, the main transaction requiring registration. Proof of possession in the present document was integral to the alleged sale transaction and not a separate collateral transaction. Where a document is inadmissible for want of registration, none of its terms can be used to prove an essential part of that transaction under the guise of collateral purpose.

Conclusion: The document could not be received even for the collateral purpose of proving possession.

Final Conclusion: The order permitting marking of the document for collateral purpose was set aside and the revision succeeded.

Ratio Decidendi: An insufficiently stamped document is inadmissible until duty and penalty are paid, and an unregistered document required to be registered cannot be used to prove any integral term of the main transaction under the label of collateral purpose.

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