Case: PRAKASH SAHU Vs. SAULAL AND OTHERS

Leave granted. 1. We have heard learned counsel for the parties. 2. The short question in the present appeal is whether an unregistered agreement of sale can be seen for collateral purposes under the proviso to Section 49 of the Registration Act, 1908. 3. The Trial Court based its reasoning on a decision of this Court in S. Kaladevi vs. V.R. Somasundaram & Ors. (2010) 5 SCC 401 elucidating as follows:- (I) In that situation it is essential for the registration of the document, if, unregistered is not admissible in evidence under Section 49 of the Registration Act. (ii) Yet, such unregistered document can be used by way of collateral evidences provided in the proviso to the Section 49 of the Registration Act. (iii) For effecting with the collateral transaction, whose registration is required by law should be free from the transaction or be divisible from that. (iv) Collateral transaction should be such a transactionwhich may not be automatically expected of effecting by the registered document, i.e. Rupees One Hundred or any transaction or instrument or right or interest in any immovable property of the value of more than Rupees One Hundred. (v) If the document is inadmissible in evidence in the absence of registration then any of its estopple cannot be admitted in evidence and for use of the document for purposes of proving important part, it would not be utilized by way of collateral purpose. 4. The High Court failed to consider the aforesaid while holding that the unregistered document could not be taken into consideration for collateral purposes.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]4. The High Court failed to consider the aforesaid while holding that the unregistered document could not be taken into consideration for collateral purposes.