Holding

The Khararunama is a mere record of past family settlement and does not affect immovable property, so it is not compulsorily registrable and may be admitted as evidence for collateral purposes without violating Section 49.

Summary

The dispute arose from a partition of family property where the respondent sought a declaration of title and eviction of the appellants. The appellants relied on a family settlement document (Khararunama) dated 15‑04‑1986 and a receipt of Rs.2,00,000 as evidence of the parties' past arrangements. The trial court admitted the documents, but the High Court held them inadmissible because they were unregistered and unstamped, invoking Section 49 of the Registration Act, 1908. The Supreme Court examined whether the Khararunama is a compulsorily registrable instrument under Section 17(1)(b) and whether an unregistered document can be admitted as evidence. It held that the Khararunama merely records past transactions and does not create, declare, assign, limit or extinguish any right in immovable property; therefore it does not attract Section 49(1)(a) or (c) and may be admitted for collateral purposes without breaching the Act. The Court also observed that such a memorandum need not be stamped. Consequently, the appeal was allowed and the High Court’s order set aside.

Issues considered

Whether the family settlement document (Khararunama) is a compulsorily registrable instrument under Section 17(1)(b) of the Registration Act, 1908.
Whether an unregistered Khararunama can be admitted as evidence under Section 49 of the Registration Act, 1908.
Whether the document can be used to prove the transaction affecting immovable property or only for a collateral purpose.
Whether stamp duty is required on the Khararunama.

Legislation cited

Code of Civil Procedure, 1908s. Order 13 Rule 3, s. Order 13 Rule 4
Indian Evidence Act, 1872s. 91
Registration Act, 1908s. 17(1)(b), s. 17(1)(c), s. 49
Specific Relief Act, 1877
Transfer of Property Act, 1882

Subjects

Registration ActSection 49family settlementunregistered documentcollateral purposepartitionstamp dutyevidence admissibility

Judgment

836 [2021]REPORTS
SUPREME COURT 11 S.C.R. 836 [2021] 11 S.C.R.

A KORUKONDA CHALAPATHI RAO & ANR.
v.
KORUKONDA ANNAPURNA SAMPATH KUMAR
(Civil Appeal No(s). 6141 of 2021)
B OCTOBER 01, 2021
[K. M. JOSEPH AND S. RAVINDRA BHAT, JJ.]
Registration Act, 1908 – ss. 17(1)(b), 49 – Partition – Family
Settlement, if required registration – Suit filed by respondent inter
alia for declaration of title over the plaint schedule property and
C
eviction of the appellants – Appellants filed the evidence affidavit
and sought to mark Kharurunama - the family settlement and a receipt,
allowed by trial court – High Court held that the documents being
unregistered and unstamped were inadmissible in evidence – On
appeal, held: Words used in the document referred to the
D arrangements allegedly which the parties made in the past – It does
not purport to by itself create, declare, assign, extinguish or limit
right in properties and thus, the Khararunama may not attract
s.49(1)(a) – If the Khararunama by itself, does not ‘affect’ immovable
property, being a record of the alleged past transaction, though
relating to immovable property, there would be no breach of
E
s.49(1)(c), as it is not being used as evidence of a transaction
effecting such property – Being let in evidence is different from
being used as evidence of the transaction – Mere admission, in
evidence of the Khararunama and the receipt would not produce
any legal effect on the immovable properties in question – Further,
F in view of the nature of the Khararunama, being record of the alleged
transactions, it may not require to be stamped – Impugned judgment
set aside – Transfer of Property Act, 1882 – Code of Civil Procedure,
1908 – Or.13, rr.3, 4 – Deeds and Documents.
Registration Act, 1908 – Proviso to s.49, exceptions under –
G Discussed.
Allowing the appeal, the Court
HELD: 1.1 Section 49 deals with the effect of non-
registration of documents which are compulsorily registrable
under Section 17 of the Registration Act and Transfer of Property
H
836
KORUKONDA CHALAPATHI RAO v. KORUKONDA ANNAPURNA 837
SAMPATH KUMAR

Act. Section 49(a) of the Registration Act declares that an A
unregistered document which is compulsorily registrable cannot
‘affect’ any immovable property comprised therein. Section 49(c)
of Registration Act prohibits the admitting of compulsorily
registrable documents which are unregistered as evidence of any
transaction affecting immovable property unless it has been
B
registered. The proviso carves out two exceptions. This Court
is 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 C
registered document. 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
D
further would it be a collateral transaction? This question is posed
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 E
the parties. 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
F
document it would result in the breach of the mandate of the
Section 49 of the Registration Act. [Paras 24-26, 29][851-B-C,
E-F; 852-B-E; 853-G-H; 854-A]
1.2 If this Court applies the test as to whether the Khararunama
in this case by itself ‘affects’, i.e., by itself creates, declares, limits
or extinguishes rights in the immovable properties in question or G
whether it merely refers to what the appellants alleged were past
transactions which have been entered into by the parties, then,
going by the words used in the document, they indicate that the
words are intended to refer to the arrangements allegedly
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838 SUPREME COURT REPORTS [2021] 11 S.C.R.

A which the parties made in the past. The document does not
purport to by itself create, declare, assign, extinguish or limit
right in properties. Thus, the Khararunama may not attract Section
49(1)(a) of the Registration Act. [Para 33][857-E-G]
2.3 As far as Section 49(1)(c) of the Registration Act is
B concerned, it provides for the other consequence of a compulsorily
registrable document not being so registered. That is, under
Section 49(1)(a), a compulsorily registrable document, which is
not registered, cannot produce any effect on the rights in
immovable property by way of creation, declaration, assignment,
limiting or extinguishment. Section 49(1)(c) in effect, reinforces
C and safeguards against the dilution of the mandate of Section
49(1)(a). Thus, it prevents an unregistered document being used
‘as’ evidence of the transaction, which ‘affects’ immovable
property. If the Khararunama by itself, does not ‘affect’ immovable
property, being a record of the alleged past transaction, though
D relating to immovable property, there would be no breach of
Section 49(1)(c), as it is not being used as evidence of a transaction
effecting such property. However, being let in evidence, being
different from being used as evidence of the transaction is
pertinent. Thus, the transaction or the past transactions cannot
be proved by using the Khararunama as evidence of the
E transaction. That is, it is to be noted that, merely admitting the
Khararunama containing record of the alleged past transaction,
is not to be, however, understood as meaning that if those past
transactions require registration, then, the mere admission, in
evidence of the Khararunama and the receipt would produce any
F legal effect on the immovable properties in question. As far as
stamp duty goes, on the finding regarding the nature of the
document, viz., Khararunama, being record of the alleged
transactions, it may not require to be stamped. When there has
been a partition, then, there may be no scope for invoking the
concept of antecedent right as such, which is inapposite after a
G disruption in the joint family status and what is more an outright
partition by metes and bounds. The appellants and the
respondents, admittedly, partitioned their joint family properties.
This is clear from the Khararunama wherein it is stated that they
have divided the joint family properties. The properties, which
H
KORUKONDA CHALAPATHI RAO v. KORUKONDA ANNAPURNA 839
SAMPATH KUMAR

are mentioned in the Khararunama, became the separate A
properties of the respondent. The impugned Judgment is set
aside. [Paras 34-36][857-G-H; 858-A-E, G-H; 859-A-B]
Subraya M.N. v. Vittala M.N. (2016) 8 SCC 705 : [2016]
5 SCR 924; Thulasidhara v. Narayanappa (2019) 6 SCC
409 : [ 2019] 8 SCR 212; Kale v. Dy. Director of B
Consolidation AIR 1976 SC 807 : [1976] 3 SCR 202;
Kirpal Kaur v. Bachan Singh and Ors. AIR 1958 SC
199 : [1958] SCR 950; Ram Charan v. Girja Nandini AIR
1966 SC 292; Krishna Beharilal v. Gulabchand AIR
1971 SC 1041 : [1971] Suppl. SCR 27; Yellapu Uma
Maheswari and Another v. Buddha Jagadheeswararao C
and Others (2015) 16 SCC 787; Sita Ram Bhama v.
Ramvatar Bhama (2018) 15 SCC 130 : [2018] 10 SCR
503; Roshan Singh and Others v. Zile Singh and Others
AIR 1988 SC 881 : [1988] 2 SCR 1106; SMS Tea
Estates (P) Ltd. v. Chandmari Tea Co. Private Ltd. (2011) D
14 SCC 66 : [2011] 9 SCR 382 – referred to.
Muruga Mudallar and Ors. v. Subba Reddiar AIR 1951
Madras 12; K. Panchapagesa Ayyar and Ors. v. K.
Kalyanasundaram Ayyar and Ors AIR 1957 Madras
472; A.M. Chakrapani Reddiar and others AIR 2001 E
Madras 135 – referred to.
N. Varada Pillai v. Jeevarathnammal AIR 1919 P.C.
44 – referred to.
Case Law Reference
[2016] 5 SCR 924 referred to Para 8 F
[2019] 8 SCR 212 referred to Para 8
[1976] 3 SCR 202 referred to Para 14
[1971] Suppl. SCR 27 referred to Para 20
[2018] 10 SCR 503 referred to Para 21 G
[1958] SCR 950 referred to Para 28
[1988] 2 SCR 1106 referred to Para 31
[2011] 9 SCR 382 referred to Para 32

H
840 SUPREME COURT REPORTS [2021] 11 S.C.R.

A CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6141
of 2021.
From the Judgment and Order dated 22.04.2016 of the High Court
of Judicature at Hyderabad for the State of Telangana and the State of
Andhra Pradesh in C.R.P. No.373 of 2015.
B M. Vijaya Bhaskar, Adv. for the Appellants.
K. Sita Rama Rao, Vijay Babu, Venkateswara Rao Anumolu,
Advs. for the Respondent.
The Judgment of the Court was delivered by
C K. M. JOSEPH, J.
1. Leave granted.
2. By the impugned order the High Court has set aside the order
passed by the Trial Court by which latter order, the Trial Court overruled
the objections of the respondent to the marking of Exhibits-B12 and B13
D
on the score that they were documents which were unregistered and
unstamped and matter was posted for the evidence of DW1 for marking
the said document. The High court found that the documents which
were the unregistered family settlement “Khararunama” and receipt
of Rs. 2,00,000/- (Rupees two lakhs) by the respondent, were not
E admissible in evidence.
3. The respondent is the younger brother of the appellants. The
respondent instituted the present Suit (O.S. No.39 of 2001) seeking
declaration of title over the plaint schedule property and for eviction of
the appellants who are the defendants and consequential perpetual
F injunction is also sought against the appellants.
4. It is not in dispute that there was a partition between the
appellants, the respondent and their other siblings. The partition list is
marked as Exhbit-A8 in the suit. It is dated 17.11.1980. The plaint
schedule properties are a part of F-Schedule in the Deed of partition
G allotted to the respondent. The case of the respondent is based on the
said partition deed allotting F-schedule to him. It is, inter alia, his case
in the suit as amended by order dated 19.12.2012 that he was in hospital
as in patient for treatment of his liver ailment. The appellants allegedly
obtained his signatures on papers and made up the alleged settlement
dated 15.4.1986 and the alleged receipt dated 08.12.1983 (The documents
H
KORUKONDA CHALAPATHI RAO v. KORUKONDA ANNAPURNA 841
SAMPATH KUMAR [K. M. JOSEPH, J.]

which are in controversy). It is his further case that appellants are in A
occupation of the property with his permission. On refusal of the
appellants to vacate and after exchange of notices, the suit is filed seeking
the relief as noted. There are two plaint schedule items. Item No.1 is the
terrace house, ground floor and upstairs. Item no.2 is half share nadava
portion in the boundaries in terms of F-Schedule of the partition deed.
B
5. On the other hand, the case of the appellants is that while
partition list dated 17.11.1980 was executed recording the fact of partition,
which was already effected, there were subsequent developments. The
respondent and his wife raised dispute before elders complaining that
the portion given to them was not sufficient. At the intervention of the
elders, it was settled and agreed between the appellants and the C
respondent that respondent should give away his portion to the second
appellant and respondent should also give away his one-third portion in
Nadava margam to the appellants and in consideration for the same the
first appellant was to give Rs.25,000/- and the second appellant was to
give Rs.75,000/- to the respondent. The said amounts were paid. On the D
advice of the elders the case of the appellants is that Khararunama
dated 15.04.1986 was executed recording the facts. On the pleading of
respondent and his wife to permit them to stay on, the respondent was
permitted to occupy the property. It is the further case of the appellants
that in December, 1993, respondent and his wife informed the appellants
that they would vacate the portion in the second appellant’s house and E
leave the same but defendants should pay some more money as they
intended to vacate the property. The elders settled the matter and it is
alleged that Second appellant had to pay Rs.2,00,000/-. Out of affection
towards the respondent and to purchase peace, the second appellant
agreed to pay Rs.2,00,000/- (Rupees Two Lakhs). Accordingly, F
Rs.2,00,000/- was paid on 08.12.1993 in the presence of elders and the
receipt dated 08.12.1993 was issued by the respondent to the second
appellant and on the same day, respondent is alleged to have vacated
and left the portion in his occupation in the house of the second appellant
and shifted to a rented portion.
G
6. After completion of the evidence on behalf of the respondent,
appellants filed the evidence affidavit and sought to mark the
Kharurunama and receipt dated 08.12.1993. As already noticed, the trial
court allowed the said documents to be marked. By the impugned
judgment the High Court has found that in the absence of registration
and not being stamped the documents were inadmissible. H
842 SUPREME COURT REPORTS [2021] 11 S.C.R.

A 7. We heard the learned counsel for the parties. We heard Shri
M. Vijay Bhaskar, learned Counsel on behalf of the appellants and also
Shri Venkateshwar Rao, learned Counsel on behalf of the respondent.
8. It is submitted by the appellants that the Family settlement
Khararunama dated 15.04.1986 was prepared in triplicate. The
B respondent also obtained one of the triplicate copies. In his examination
the respondent admitted his signature in the said ‘Khararunama’ and the
same has been marked as B1 to B3. It is further submitted that the
respondent as PW1 has admitted his signature on the receipt dated
08.12.1993 marked as (B4). B9 to B11 are stated to be admission of
signature on the Khararunama dated 15.04.1986 upon the respondent
C being confronted with the Khararunama. It is pointed out that High
Court erred in not considering the family settlement Khararunama and
receipt dated 08.12.1993 in accordance with well-established principles
relating to the law of family settlement /family arrangement. Reliance is
placed on the judgment of this court in Subraya M.N. v. Vittala M.N.1
D to contend that there can be an oral relinquishment of the share of the
family members in the family settlement and family arrangement. If the
terms of the said family settlement is reduced into writing, and it is only
a memorandum executed subsequently recording the terms of the oral
family settlement, then, no registration is needed, it is contended. The
decision of this Court in Thulasidhara v. Narayanappa2 has also been
E relied upon. It is lastly contended that even if the family settlement
Khararunama is required to be registered, in view of the fact that without
registration written document of family settlement/arrangement could
be used as corroborative evidence as explaining the arrangement made
thereunder and the conduct of the parties, the order of the High Court is
F infirm.
9. Per contra, apart from reiterating his case about the appellants
obtaining his signature on blank papers and subsequently utilizing them
for the family settlement, it is contended that family settlement
Khararunama dated 15.04.1986 required registration under section
G 17(1)(b) of the Registration Act, 1908. Under the said settlement,
appellants ought to pay certain sum to the respondent. The document
would come into force after the receipt of the consideration. It is
contended that the High Court is right in finding that unregistered family

1
(2016) 8 SCC 705
H 2
(2019) 6 SCC 409
KORUKONDA CHALAPATHI RAO v. KORUKONDA ANNAPURNA 843
SAMPATH KUMAR [K. M. JOSEPH, J.]

Khararunama, whereunder a past transaction of relinquishment is A
recorded, was inadmissible for want of registration and deficiency of
stamp duty.
10. The Khararunama reads, inter alia, as follows:
“We, the three are brothers. We and our brothers divided family
properties and executed partition list dated 17-11-1980. As per B
the said partition list B schedule property fallen to No.1 of us and
E schedule property fallen to No.2 of us and F schedule property
fallen to No. 3 of us and we are enjoying those properties. While
the matter stood some constructions were undertaken to the house.
Nos. 2 and 3 of us have divided the property which jointly fallen C
to them and made some constructions and enjoying. Nadava way
is being enjoyed by all of us jointly.
Even after 17-11-1980 by this date we are having common dining
though properties are divided and little disputes are arising among
us and elders are interfered and settled. D
We have not reduced into writing the events that took place among
three of us subsequent to 17-11-1980. We are enjoying the
properties as per the following changes as per the advice of the
elders.
The Nadava way which was originally fell jointly to three of us is E
being enjoyed by Nos.1 and 2 of us since no. 3 of us gave away
his undivided 1/3rd in favour of Nos. 1 and 2 of us. Likewise, Nos.
1 and 2 of us have been enjoying said Nadava way with an
understanding to enjoy Nadava way likewise if any further floors
are raised over ground floor. The undivided ½ share house portion F
which originally fallen to share of No. 3 of us which was
subsequently mutually divided among Nos. 2 and 3 of us was
given away by No.3 of us to No.2 of us and accordingly No.2 of
us has been in enjoyment of the entire house portion. No.3 of us is
enjoying with absolute rights the shop room which was fallen to
his share with an understanding that No.3 of us can raise G
constructions over the said shop room within the measurements
of shop room. We have been enjoying with an understanding that
eastern wall of above said shop shall be joint between Nos.2 and
3 of us and western wall shall be joint for all the three of us and
northern wall shall be joint between Nos.2 and 3 of us. We have
H
844 SUPREME COURT REPORTS [2021] 11 S.C.R.

A been enjoying with an understanding that none of us shall arrange
any door-ways, windows or ventilators to said joint walls.
For the above adjustments No.1 of us has already paid Rs.25,000/
- (Rupees Twenty-Five Thousand) to No. 3 of us previously and
No. 2 of us has already paid Rs. 75,000/- (Rupees Seventy-Five
B Thousand) to No. 3 of us previously.
We have agreed to arrange separate steps from our respective
ground floor portion as and when further floors are constructed.
Nos. 1 to 3 of us have been enjoying the properties as mentioned
above with absolute rights. We have been enjoying the remaining
C properties fallen to us as per partition list dated 17-11-1980 which
are not mentioned in this document.
This Kharurunama is executed for record purpose and for
remembrance purpose. All the contents of this document are read
over and explained to all of us and we have willfully agreed the
D contents on our volition. We will not raise any disputes in future.”
Parties 1 and 2 are the appellants. The 3rd party is the respondent.
11. As far as the receipt is concerned, it is signed on a 20 paise
revenue stamp. It is allegedly executed by the respondent having received
Rs.2,00,000/- (Rupees two lakhs) on 08.12.1983 as per the advice of the
E
elders besides the amount of Rs.1,00,000/- (Rupees one lakh) already
paid to the respondent mentioned in the Khararunama dated 15.04.1986
while vacating the house portion mentioned in the Kharurunama
excepting the shop room which fell to the share of the respondent under
the Partition List 1980 purportedly signed by two witnesses. It is executed
F in favour of the second appellant.
12. Undoubtedly, Section 17(1)(b) makes ‘other non-testamentary
instruments’, which purport or operate to create, assign, limit or extinguish
whether in present or in future any right or interest whether vested or
contingent of the value of Rs.100/- and upwards in an immovable property
G compulsorily registrable. Section 17(1)(c) reads as follows:
“17(1)(c) non-testamentary instruments which acknowledge the
receipt or payment of any consideration on account of the creation,
declaration, assignment, limitation or extinction of any such right,
title or interest; and”
H
KORUKONDA CHALAPATHI RAO v. KORUKONDA ANNAPURNA 845
SAMPATH KUMAR [K. M. JOSEPH, J.]

13. Section 17 (2) provides nothing in Clauses (b) and (c) of sub- A
Section(1) applies, inter alia, to any instrument of partition made by the
revenue officer. Section 49 of the Registration Act reads as follows:
“49. Effect of non-registration of documents required to be
registered.—No document required by section 17 1[or by any
provision of the Transfer of Property Act, 1882 (4 of 1882)], to be B
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 C
property or conferring such power, unless it has been
registered: 54 [Provided that an unregistered document affecting
immovable property and required by this Act or the Transfer of
Property Act, 1882 (4 of 1882), to be registered may be received
as evidence of a contract in a suit for specific performance under
Chapter II of the Specific Relief Act, 1877 (3 of 1877) 55, 56 [***] D
or as evidence of any collateral transaction not required to be
effected by registered instrument.] ..”
14. There is a long line of judgments of this court dealing with the
question as to whether a family arrangement is compulsorily registrable.
We need only refer to the case of Kale v. Dy. Director of E
Consolidation3. This Court has summed up the essentials of the family
settlement in the following proposition:
“10. In other words to put the binding effect and the essentials of
a family settlement in a concretised form, the matter may be
reduced into the form of the following propositions: F
“(1) The family settlement must be a bona fide one so as to
resolve family disputes and rival claims by a fair and equitable
division or allotment of properties between the various members
of the family;
(2) The said settlement must be voluntary and should not be G
induced by fraud, coercion or undue influence;
(3) The family arrangement may be even oral in which case
no registration is necessary;
3
AIR 1976 SC 807 H
846 SUPREME COURT REPORTS [2021] 11 S.C.R.

A (4) It is well settled that registration would be necessary only
if the terms of the family arrangement are reduced into writing.
Here also, a distinction should be made between a document
containing the terms and recitals of a family arrangement
made under the document and a mere memorandum prepared
after the family arrangement had already been made either
B
for the purpose of the record or for information of the court
for making necessary mutation. In such a case the memorandum
itself does not create or extinguish any rights in immovable
properties and therefore does not fall within the mischief of
Section 17(2) of the Registration Act and is, therefore, not
C compulsorily registrable;
(5) The members who may be parties to the family arrangement
must have some antecedent title, claim or interest even a
possible claim in the property which is acknowledged by the
parties to the settlement. Even if one of the parties to the
D settlement has no title but under the arrangement the other
party relinquishes all its claims or titles in favour of such a
person and acknowledges him to be the sole owner, then the
antecedent title must be assumed and the family arrangement
will be upheld and the courts will find no difficulty in giving
assent to the same;
E
(6) Even if bona fide disputes, present or possible, which may
not involve legal claims are settled by a bona fide family
arrangement which is fair and equitable the family arrangement
is final and binding on the parties to the settlement.”
(Emphasis supplied)
F
15. In the facts of this case, the contention of the appellants is
that the Kharurunama dated 15.04.1986 merely sets out the arrangement
arrived at between the brothers which is the family arrangement and it
was a mere record of the past transaction and therefore by itself it did
not create or extinguish any right over immovable property. Resultantly,
G the document did not attract Section 17(1)(b) of the Registration Act. In
other words, it is contended that even if there is relinquishment of rights
by the family member, since the document is only a record of what had
already happened in the past, the law did not mandate registration.
16. It is to be noted that in this regard emphasis is placed by the
H appellants on the decision of this Court in Subraya M.N. v. Vittala M.N.
KORUKONDA CHALAPATHI RAO v. KORUKONDA ANNAPURNA 847
SAMPATH KUMAR [K. M. JOSEPH, J.]

(supra). Therein, in regard to the dispute to plaint items 1 and 2 properties, A
there was D22 resolution passed by the village panchayat signed by the
Panchayatdar, plaintiffs 3 and 4 and defendant. It was, inter alia,
mentioned therein that the defendant, in whose favour the plaintiffs 3
and 4 relinquished the rights, had paid Rs.15,000/- each to the said
plaintiffs. Dealing with the impact of Section 17 and 49 of the Registration
B
Act this Court, inter alia, held:
“16. Even though recitals in Ext. D-22 are to the effect of
relinquishment of right in Items 1 and 2, Ext. D-22 could be taken
as family arrangements/ settlements. There is no provision of law
requiring family settlements to be reduced to writing and registered,
though when reduced to writing the question of registration may C
arise. Binding family arrangements dealing with immovable
property worth more than rupees hundred can be made orally and
when so made, no question of registration arises. If, however, it is
reduced to the form of writing with the purpose that the terms
should be evidenced by it, it required registration and without D
registration it is inadmissible; but the said family arrangement can
be used as corroborative piece of evidence for showing or
explaining the conduct of the parties. In the present case, Ext. D-
22 panchayat resolution reduced into writing, though not registered
can be used as a piece of evidence explaining the settlement arrived
at and the conduct of the parties in receiving the money from the E
defendant in lieu of relinquishing their interest in Items 1 and 2.”
(Emphasis supplied)
17. This view has been also followed in Thulasidhara v.
Narayanappa4. Paragraph-9.5 reads as below: F
“9.5. As held by this Court in Subraya M.N. [Subraya
M.N. v. Vittala M.N., (2016) 8 SCC 705] even without registration
a written document of family settlement/family arrangement can
be used as corroborative evidence as explaining the arrangement
made thereunder and conduct of the parties. In the present case, G
as observed hereinabove, even the plaintiff has also categorically
admitted that the oral partition had taken place on 23-4-1971 and
he also admitted that 3 to 4 panchayat people were also present.
However, according to him, the same was not reduced in writing.
4
(2019) 6 SCC 409 H
848 SUPREME COURT REPORTS [2021] 11 S.C.R.

A Therefore, even accepting the case of the plaintiff that there was
an oral partition on 23-4-1971, the document, Ext. D-4 dated 23-
4-1971, to which he is also the signatory and all other family
members are signatory, can be said to be a list of properties
partitioned. Everybody got right/share as per the oral partition/
partition. Therefore, the same even can be used as corroborative
B
evidence as explaining the arrangement made thereunder and
conduct of the parties. Therefore, in the facts and circumstances
of the case, the High Court has committed a grave/manifest error
in not looking into and/or not considering the document Ext. D-4
dated 23-4-1971.”
C
18. In the said case plaintiff had admitted the oral partition and
the unregistered document dated 23.04.1971 to which he was the
signatory, was accepted as the list of properties in the partition.
19. In Ram charan v. Girja Nandini5, this Court was dealing with
a case of a compromise decree and this Court went on to hold that it
D
was a family arrangement. It went on to hold as follows:
“.. For as the Privy Council pointed out in Mst. Hiran Bibi’s case,
AIR 1914 PC 44 in a family settlement each party takes a share
in the property by virtue of the independent title which is admitted
to that extent by the other parties. It is not necessary, as would
E
appear from the decision in Rangasami Gounden v. Nachiappa
Gounden 46 Ind App 72 (AIR 1918 PC 196), that every party
taking benefit under a family settlement must necessarily be shown
to have, under the law, a claim to a share in the property. All that
is necessary is that the parties must be related to one another in
F some way and have a possible claim to the property or a claim or
even a semblance of a claim on some other ground as, say
affection.”
(Emphasis supplied)

G 20. This view has been reiterated in Krishna Beharilal v.
Gulabchand6. In Yellapu Uma Maheswari and Another v. Buddha
Jagadheeswararao and Others 7 , this Court found that the

5
AIR 1966 SC 292
6
AIR 1971 SC 1041
7
H (2015) 16 SCC 787
KORUKONDA CHALAPATHI RAO v. KORUKONDA ANNAPURNA 849
SAMPATH KUMAR [K. M. JOSEPH, J.]

relinquishment of the right was made through the document. Hence, it A
was found that documents were compulsorily registrable. This Court
inter alia held as follows:
“15. It is well settled that the nomenclature given to the document
is not decisive factor but the nature and substance of the
transaction has to be determined with reference to the terms of B
the documents and that the admissibility of a document is entirely
dependent upon the recitals contained in that document but not on
the basis of the pleadings set up by the party who seeks to introduce
the document in question. A thorough reading of both Exts. B-21
and B-22 makes it very clear that there is relinquishment of right
in respect of immovable property through a document which is C
compulsorily registrable document and if the same is not registered,
it becomes an inadmissible document as envisaged under Section
49 of the Registration Act. Hence, Exts. B-21 and B-22 are the
documents which squarely fall within the ambit of Section 17(1)(b)
of the Registration Act and hence are compulsorily registrable D
documents and the same are inadmissible in evidence for the
purpose of proving the factum of partition between the parties.
We are of the considered opinion that Exts. B-21 and B-22 are
not admissible in evidence for the purpose of proving primary
purpose of partition.”
E
(Emphasis supplied)
21. We may notice that in Sita Ram Bhama v. Ramvatar Bhama8,
wherein the appellant and respondent were brothers, according to the
appellant, a memorandum of settlement as decided by their late father
was recorded in regard to his acquired property. The question arose as F
to whether the settlement was admissible. It is necessary to notice
paragraph-10, which reads as under:
“10. The only question which needs to be considered in the present
case is as to whether document dated 9-9-1994 could have been
accepted by the trial court in evidence or the trial court has rightly G
held the said document inadmissible. The plaintiff claimed the
document dated 9-9-1994 as memorandum of family settlement.
The plaintiff’s case is that earlier partition took place in the lifetime
of the father of the parties on 25-10-1992 which was recorded as
8
(2018) 15 SCC 130 H
850 SUPREME COURT REPORTS [2021] 11 S.C.R.

A memorandum of family settlement on 9-9-1994. There are more
than one reasons due to which we are of the view that the document
dated 9-9-1994 was not mere memorandum of family settlement,
rather a family settlement itself. Firstly, on 25-10-1992, the father
of the parties was himself owner of both, the residence and shop
being self-acquired properties of Devi Dutt Verma. The High Court
B
has rightly held that the said document cannot be said to be a will,
so that the father could have made the will in favour of his two
sons, the plaintiff and the defendant. Neither the plaintiff nor the
defendant had any share in the property on the day when it is said
to have been partitioned by Devi Dutt Verma. Devi Dutt Verma
C died on 10-9-1993. After his death, the plaintiff, the defendant
and their mother as well as sisters become the legal heirs under
the Hindu Succession Act, 1956 inheriting the property being a
Class I heir. The document dated 9-9-1994 divided the entire
property between the plaintiff and the defendant which document
is also claimed to be signed by their mother as well as the sisters.
D
In any view of the matter, there is relinquishment of the rights of
other heirs of the properties, hence, the courts below are right in
their conclusion that there being relinquishment, the document dated
9-9-1994 was compulsorily registrable under Section 17 of the
Registration Act.”
E 22. Thereafter, we may notice the view of this Court in paragraph-
13 as under:
“13. There is only one aspect of the matter which needs
consideration i.e. whether the document dated 9-9-1994, which
was inadmissible in evidence, could have been used for any
F collateral purpose. In a suit for partition, an unregistered document
can be relied upon for collateral purpose i.e. severancy of title,
nature of possession of various shares but not for the primary
purpose i.e. division of joint properties by metes and bounds…”
23. No doubt in the said case, the court has followed the Judgment
G in Yellapu Uma Maheswari and Another(supra). It found that the
unregistered memorandum could be used for collateral purpose within
the meaning of Section 49 of the Registration Act subject to payment of
penalty and stamp duty.
24. Order 13 Rule 3 of the Code of Civil Procedure, 1908
H (hereinafter referred to as ‘the Code’, for short) enables the Court to
KORUKONDA CHALAPATHI RAO v. KORUKONDA ANNAPURNA 851
SAMPATH KUMAR [K. M. JOSEPH, J.]

reject any document which is considered irrelevant or otherwise A
inadmissible recording the ground of such rejection. Order 13 Rule 4 of
the Code provides for the procedure when a document has been admitted
in evidence. Section 49 deals with the effect of non-registration of
documents which are compulsorily registrable under Section 17 of the
Registration Act and Transfer of Property Act. Section 49(a) of the
B
Registration Act declares that an unregistered document which is
compulsorily registrable cannot ‘affect’ any immovable property
comprised therein. The expression ‘affect’ has been explained by the
full bench judgment of the Madras High Court in Muruga Mudallar
and Ors. v. Subba Reddiar9. We may notice only the following discussion
in the judgment of Satyanarayana Rao,J.: C
“As pointed out by Spencer J. in Saraswathamma v. Paddayya,
46 Mad. 349 : (A. I. R. 1923 Mad. 297) the verb “affect” in
Section 49 is only a compendious term employed by the Legislature
to express the meaning of the longer phrase “purporting or
operating to create, declare, assign, limit or extinguish, whether in D
present or in future, any right, title or interest whether vested or
contingent to” (See also Kanjee & Moolji Bros, v. Shanmugham
Pillai, 56 Mad. 169 : (A. I. R. 1932 Mad. 734), where the view of
Spencer J. was accepted).”
25. Section 49(c) of Registration Act prohibits the admitting of E
compulsorily registrable documents which are unregistered as evidence
of any transaction affecting immovable property unless it has been
registered. In the very same Judgment, we notice the following discussion:
“The other consequence of non-registration is to prohibit the
document from being received not “in” evidence, but “as” evidence F
of any transaction affecting such property. The emphasis on the
word “as” was, in my opinion, rightly laid by Venkatasubba Rao J.
in Saraswathamma v. Paddayya, 46 Mad. 349 : (A. I. R. 1923
Mad. 297), where the learned Judge observed:
“What is prohibited by the section is receiving a document as G
evidence of a
transaction, not merely receiving it in evidence, i.e., as a piece of
evidence having a bearing on the question to be ultimately decided.”
9
AIR 1951 Madras 12 H
852 SUPREME COURT REPORTS [2021] 11 S.C.R.

A 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).”
B (Emphasis supplied)
26. The proviso carves out two exceptions. We are only
concerned, in this case, with only one of them and that is contained in
the last limb of the proviso. The unregistered document can be used as
evidence of any collateral transaction. This is however subject to the
C 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
D 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
E can be looked into to prove the conduct of the parties and the nature of
the possession which was enjoyed by the parties.
27. In N. Varada Pillai v. Jeevarathnammal10, the Privy Council
Court took the view that though unregistered, the document could be
used to explain the nature of the possession of a person. In the said
F case, in fact, two widows, who were in possession of the property in
equal shares applied to the Collector that they had given away the
property as Stridhan to a lady and that the orders may be issued for
transferring the property to her. The property was so transferred on the
basis of the petition. On the question whether the transferee had obtained
G title by adverse possession while finding the unregistered petition before
the Collector could not be admitted to prove a gift, the fact that transferee
was continuing as a donee and owner was gleaned from the said petition
to support the case of adverse possession.

10
H AIR 1919 P.C. 44
KORUKONDA CHALAPATHI RAO v. KORUKONDA ANNAPURNA 853
SAMPATH KUMAR [K. M. JOSEPH, J.]

28. An attempt to derive support from the said judgment was A
refused on a different set of facts by this court in Kirpal Kaur v. Bachan
Singh and Ors.11. In the said case the court was dealing with the
following facts. The widow of a Hindu upon the death of her husband
came by possession of the plaint schedule properties. She even got the
property mutated. A gift was made by her. The reversioners thereafter
B
approached her and an unregistered document was entered into with
her wherein she purported to acknowledge that she had only a life estate.
Thereafter the suit came to be filed. The widow set up the case of
adverse possession. On the other hand, the plaintiffs placed reliance on
the unregistered document and relied upon the judgment of the N. Varada
Pillai(supra). This Court repelled the case of the plaintiffs and held as C
follows in Kirpal Kaur (supra):
“15. We cannot agree that on the authority of Varatha Pillai’s
case (1918) 46 I.A. 285, the agreement of February 6, 1932, can
be admitted in evidence in the case in hand to show the nature of
Harnam Kaur’s possession of the lands subsequent to its date. In D
Varatha Pillai’s case (1918) 46 I.A. 285, Duraisani had got into
possession only after the petition and claimed to retain possession
only under the gift mentioned in it. The petition was therefore
admissible in evidence to show the nature of her possession. In
the present case Harnam Kaur had been in possession before the
E
date of the document and to admit it in evidence to show the
nature of her possession subsequent to it would be to treat it as
operating to destroy the nature of the previous possession and to
convert what had started as adverse possession into a permissive
possession and, therefore, to give effect to the agreement contained
in it which admittedly cannot be done for want of registration. To F
admit it in evidence for the purpose sought would really amount to
getting round the statutory bar imposed by Section 49 of the
Registration Act.”
(Emphasis supplied)
29. This is significant for the reason that the law is not that in G
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

11
AIR 1958 SC 199 H
854 SUPREME COURT REPORTS [2021] 11 S.C.R.

A allowing the case of the party to consider an unregistered document it
would result in the breach of the mandate of the Section 49 of the
Registration Act.
30. We may also usefully refer to the views expressed by the
Division Bench of the Madras High Court in K. Panchapagesa Ayyar
B and Ors. v. K. Kalyanasundaram Ayyar and Ors.12:
“25. To sum up it is well settled in a long series of decisions which
have since received statutory recognition by the Amending Act of
1929 (vide the concluding words of the new proviso to Section 49
of the Registration Act) that a compulsorily registrable but an
C unregistered document is admissible in evidence for a collateral
purpose that is to say, for any purpose other than that of creating,
declaring, assigning, limiting or extinguishing a right to immovable
property.
The expression “collateral purpose” is no doubt a very vague one
D and the Court must decide in each case whether the purpose for
which it is sought to use the unregistered document is really a
collateral one or is to establish directly title to the immovable
property sought to be conveyed by the document. But by the simple
device of calling, it a “collateral purpose” a party cannot use the
unregistered document in any legal proceedings to bring about
E indirectly the effect which it would have had if registered.
To quote Sir George Lowndes in James R. R. Skinner v. Robert
Hercules Skinner ILR 51 All 771: MANU/PR/0091/1929 : AIR
1929 PC 269 (Z 22) the collateral purpose to which the document
is put should be nothing else than an evasion of the statute and
F render almost nugatory the hitherto well-established rule relating
to the limited uses to which an unregistered partition deed can be
put to.”
(Emphasis supplied)
31. In Roshan Singh and Others v. Zile Singh and Others13,
G
the question arose whether Exhibit P12 in the said case was an instrument
of partition and therefore inadmissible for want of registration under
Section 49 of the Registration Act or whether it was merely a

12
AIR 1957 Madras 472
H 13
AIR 1988 SC 881
KORUKONDA CHALAPATHI RAO v. KORUKONDA ANNAPURNA 855
SAMPATH KUMAR [K. M. JOSEPH, J.]

memorandum of family arrangement. This Court after referring to the A
document held as follows:
“8. According to the plain terms of the document Exh. P-12, it is
obvious that it was not an instrument of partition but merely a
memorandum recording the decision arrived at between the parties
as to the manner in which the partition was to be effected. The B
opening words of the document Exh. P-12 are: ‘Today after
discussion it has been mutually agreed and decided that....’ What
follows is a list of properties allotted to the respective parties.
From these words, it is quite obvious that the document Exh. P-12
contains the recital of past events and does not itself embody the
C
expression of will necessary to effect the change in the legal
relation contemplated. So also the Panch Faisla Exh. P-1 which
confirmed the arrangement so arrived at, opens with the words
‘Today on 31-1-1971 the following persons assembled to effect a
mutual compromise between Chaudhary Puran Singh and
Chaudhary Zile Singh and unanimously decided that....’ The purport D
and effect of the decision so arrived at is given thereafter. One of
the terms agreed upon was that the gher marked B2 would remain
in the share of Zile Singh, representing the Plaintiffs.
9. It is well-settled that while an instrument of partition which
operates or is intended to operate as a declared volition constituting E
or severing ownership and causes a change of legal relation to
the property divided amongst the parties to it, requires registration
under Section 17(1)(b) of the Act, a writing which merely recites
that there has in time past been a partition, is not a declaration of
will, but a mere statement of fact, and it does not require
F
registration. The essence of the matter is whether the deed is a
part of the partition transaction or contains merely an incidental
recital of a previously completed transaction. The use of the past
tense does not necessarily indicate that it is merely a recital of a
past transaction. It is equally well-settled that a mere list of
properties allotted at a partition is not an instrument of partition G
and does not require registration. Section 17(1)(b) lays down that
a document for which registration is compulsory should, by its
own force, operate or purport to operate to create or declare
some right in immovable property. Therefore, a mere recital of
what has already taken place cannot be held to declare any right
H
856 SUPREME COURT REPORTS [2021] 11 S.C.R.

A and there would be no necessity of registering such a document.
Two propositions must therefore flow: (1) A partition may be
effected orally; but if it is subsequently reduced into a form of a
document and that document purports by itself to effect a division
and embodies all the terms of bargain, it will be necessary to
register it. If it be not registered, Section 49 of the Act will prevent
B
its being admitted in evidence. Secondly evidence of the factum
of partition will not be admissible by reason of Section 91 of the
Evidence Act, 1872. (2) Partition lists which are mere records of
a previously completed partition between the parties, will be
admitted in evidence even though they are unregistered, to prove
C the fact of partition: See Mulla’s Registration Act, 8th Edn., pp.
54-57.”
(Emphasis supplied)
Thereafter, the Court also approved of the use of the said document
for a collateral transaction and observed as follows:
D
“11. Even otherwise, the document Exh. P 12 can be looked into
under the proviso to Section 49 which allows documents which
would otherwise be excluded, to be used as evidence of ‘any
collateral transaction not required to be effected by a registered
instrument’. In Varada Pillai v. Jeevarathnammal, (1919) 46 Ind
E App 285 : AIR 1919 PC 44 the Judicial Committee of the Privy
Council allowed an unregistered deed of gift which required
registration, to be used not to prove a gift ‘because no legal title
passed’ but to prove that the donee thereafter held in her own
right. We find no reason why the same rule should not be made
F applicable to a case like the present.”
32. In SMS Tea Estates (P) Ltd. v. Chandmari Tea Co. Private
Ltd.14, the question arose whether an arbitration agreement contained in
a compulsorily registrable document which was not registered could be
used to prove the collateral transaction, namely, the provision for
arbitration. This court held as follows:
G
“11. Section 49 makes it clear that a document which is
compulsorily registerable, if not registered, will not affect the
immovable property comprised therein in any manner. It will also

14
H (2011) 14 SCC 66
KORUKONDA CHALAPATHI RAO v. KORUKONDA ANNAPURNA 857
SAMPATH KUMAR [K. M. JOSEPH, J.]

not be received as evidence of any transaction affecting such A
property, except for two limited purposes. First is as evidence of
a contract in a suit for specific performance. Second is as evidence
of any collateral transaction which by itself is not required to be
effected by registered instrument. A collateral transaction is not
the transaction affecting the immovable property, but a transaction
B
which is incidentally connected with that transaction. The question
is whether a provision for arbitration in an unregistered document
(which is compulsorily registerable) is a collateral transaction, in
respect of which such unregistered document can be received as
evidence under the proviso to Section 49 of the Registration Act.
C
16. An arbitration agreement does not require registration under
the Registration Act. Even if it is found as one of the clauses in a
contract or instrument, it is an independent agreement to refer the
disputes to arbitration, which is independent of the main contract
or instrument. Therefore having regard to the proviso to Section
49 of the Registration Act read with Section 16(1)(a) of the Act, D
an arbitration agreement in an unregistered but compulsorily
registerable document can be acted upon and enforced for the
purpose of dispute resolution by arbitration.”
(Emphasis supplied)
E
33. If we apply the test as to whether the Khararunama in this
case by itself ‘affects’, i.e., by itself creates, declares, limits or
extinguishes rights in the immovable properties in question or whether it
merely refers to what the appellants alleged were past transactions which
have been entered into by the parties, then, going by the words used in
the document, they indicate that the words are intended to refer to the F
arrangements allegedly which the parties made in the past. The document
does not purport to by itself create, declare, assign, extinguish or limit
right in properties. Thus, the Khararunama may not attract Section
49(1)(a) of the Registration Act.
34. As far as Section 49(1)(c) of the Registration Act is concerned, G
it provides for the other consequence of a compulsorily registrable
document not being so registered. That is, under Section 49(1)(a), a
compulsorily registrable document, which is not registered, cannot
produce any effect on the rights in immovable property by way of
creation, declaration, assignment, limiting or extinguishment. Section
H
858 SUPREME COURT REPORTS [2021] 11 S.C.R.

A 49(1)(c) in effect, reinforces and safeguards against the dilution of the
mandate of Section 49(1)(a). Thus, it prevents an unregistered document
being used ‘as’ evidence of the transaction, which ‘affects’ immovable
property. If the Khararunama by itself, does not ‘affect’ immovable
property, as already explained, being a record of the alleged past
transaction, though relating to immovable property, there would be no
B
breach of Section 49(1)(c), as it is not being used as evidence of a
transaction effecting such property. However, being let in evidence, being
different from being used as evidence of the transaction is pertinent
[See Muruga Mudallar (supra)]. Thus, the transaction or the past
transactions cannot be proved by using the Khararunama as evidence
C of the transaction. That is, it is to be noted that, merely admitting the
Khararunama containing record of the alleged past transaction, is not
to be, however, understood asmeaning that if those past transactions
require registration, then, the mere admission, in evidence of the
Khararunama and the receipt would produce any legal effect on the
immovable properties in question.
D
35. As far as stamp duty goes, on our finding regarding the nature
of the document, viz., Khararunama, being record of the alleged
transactions, it may not require to be stamped. We notice the following
conclusion of the Division Bench of the Madras High Court inA.C.
Lakshmipathy and others v. A.M. Chakrapani Reddiar and others 15:
E
“42. To sum up the legal position
xxx xxx xxx
(V) However, a document in the nature of a Memorandum,
evidencing a family arrangement already entered into and had
F been prepared as a record of what had been agreed upon, in
order that there are no hazy notions in future, it need not be stamped
or registered.”
36. No doubt, when there has been a partition, then, there may be
no scope for invoking the concept of antecedent right as such, which is
G inapposite after a disruption in the joint family status and what is more
an outright partition by metes and bounds. In this regard, it is to be noticed
that the appellants and the respondents, admittedly, partitioned their joint
family properties. This is clear from the Khararunama wherein it is

15
H AIR 2001 Madras 135
KORUKONDA CHALAPATHI RAO v. KORUKONDA ANNAPURNA 859
SAMPATH KUMAR [K. M. JOSEPH, J.]

stated that they have divided the joint family properties. The properties, A
which are mentioned in the Khararunama, became the separate
properties of the respondent.
37. Resultantly, the Appeal is allowed. The impugned Judgment is
set aside subject to the observations as contained in this Judgment. There
will be no Order as to costs. B

Divya Pandey Appeal allowed.

C

D

E

F

G

H