Unregistered Agreement Of Sale-Cum-Possession Cannot Be Marked Without Stamp Duty And Penalty Merely Because Subsequent Pleadings Deny Possession: Andhra Pradesh High Court

"Levy of the stamp duty and penalty is always in relation to the document which is to be marked before the Court and such levy cannot depend upon the pleadings of the parties. Unless the document is sufficiently stamped it cannot be marked even for collateral purpose." Andhra Pradesh High Court, in a judgment, held that an unregistered agreement of sale-cum-possession cannot be received or marked in evidence without payment of the requisite stamp duty and penalty under the Indian Stamp Act, 1899, regardless of subsequent pleadings or amendments regarding possession.

A bench of Justice Venkateswarlu Nimmagadda observed that the requirement for stamp duty is determined by the nomenclature and recitals of the document itself, rather than subsequent deviations in the parties' pleadings.

The petitioner-plaintiff instituted a civil suit seeking specific performance of a possessory agreement of sale dated November 14, 2019, alongside permanent injunction and subsequent recovery of possession. The plaintiff sought to mark the unregistered agreement of sale-cum-possession as an exhibit during trial. The trial court rejected this request, holding that the document recited delivery of possession and thus could not be marked without paying the requisite stamp duty and penalty.

The primary question before the court was whether an unregistered agreement of sale-cum-possession can be received and marked as an exhibit in a specific performance suit without paying stamp duty and penalty when the plaintiff's possession is subsequently disputed or amended.

Court Rejects Reliance On Subsequent Pleadings

The court analyzed the competing contentions of both parties concerning the admissibility of the document. The plaintiff contended that since the defendant disputed possession in the written statement and the plaint was subsequently amended to seek recovery of possession, the document ought to be treated purely as an agreement of sale without possession, attracting the proviso to Section 49 of the Registration Act, 1908.

"Document Nature Governs Stamp Duty"

Rejecting this argument, the bench observed that the levy of stamp duty and penalty relates strictly to the description and recitals of the instrument itself. Justice Nimmagadda noted that because the instrument was explicitly styled as an agreement of sale-cum-possession and contained a specific recital of delivery of property on the date of execution, its character cannot be altered by subsequent pleadings or interim developments.

Distinguishing Precedents On Effective Possession

The court examined the scope of judgments cited by the petitioner, including the Supreme Court's ruling in S. Kaladevi v. V.R. Somasundaram and the erstwhile Andhra Pradesh High Court decision in Cheryala Srinivas v. Moola Sujatha. The bench clarified that while an unregistered document can be received as evidence of a contract in a specific performance suit under the proviso to Section 49 of the Registration Act, it remains subject to the Indian Stamp Act when a clear and absolute recital of possession is embedded in the document.

"Stamp Duty Compulsory For Possessory Agreements"

Relying on judicial pronouncements such as Kota Ganga Rao v. Kamineni Anjaneyulu and K. Panchapagesa Ayyar v. K. Kalyanasundaram Ayyar, the court underscored that agreements containing recitals of delivery of possession are deemed conveyances for the purpose of imposing stamp duty. The bench reiterated that unless a document requiring stamp duty is sufficiently stamped, it cannot be marked even for a collateral purpose.

Final Directions And Order

Concluding that the trial court committed no illegality in refusing to mark the unregistered possessory agreement of sale without payment of stamp duty and penalty, the High Court dismissed the civil revision petition. All pending interlocutory applications were ordered to stand closed.

Date of Decision: 24 June 2026