K.B. Shah & Sons Pvt. Ltd. v. Development Consultant Ltd., (2008) 8 SCC 564: JT 2008 (9) SC 12 as approved in
S. Kaladevi v. V.R. Somasundaram,
AIR 2010 SC 1645
1. A document required to be registered 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.
To the aforesaid principles, one more principle may be added, namely, that a document required to be registered, if unregistered, can be admitted in evidence as evidence of a contract in a suit for specific performance.
Source: M A Rashid