What is the effect of the non-registration of documents that need to be registered under the Registration Act, 1908 ?

Section 49 of the Registration Act, 1908 provides the provisions relating to Effect of non-registration of documents required to be registered. It states: No document required by section 17 of the Registration Act, 1908 or by any provision of the Transfer of Property Act, 1882, to be registered shall: affect any immovable property comprised therein, or confer any power to adopt, or be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered: Section 49 is mandatory, and a document which is required to be registered cannot be received in evidence as affecting immovable property. An unregistered document which comes within Section 17 cannot be used in any legal proceeding to bring out indirectly the effect which it would have if registered. However, as provided in Section 49, proviso, an unregistered document affecting immovable property and required by Registration Act, 1908 or the Transfer of property Act, 1882 to be registered may be received as evidence of a contract in a suit for specific performance or as evidence of part performance of a contract for the purposes of Section 53A of the Transfer of Property Act, 1882 or as evidence of any collateral transaction not to be effective by registered instrument. All that the proviso to Section 49 permits is that in a suit for specific performance an unregistered document affecting immovable property may be given in evidence. The purpose is that the document which has not conveyed or passed title may still be used as evidence of the terms. In K. Narasimha Rao v. Sai Vishnu, AIR 2006 NOC (A.P.) p. 80 , it has been held that: It is settled legal principle that an unstamped instrument is not at all admissible in evidence even for collateral purpose. But an unregistered instrument originally unstamped, if duly stamped subsequently can be admitted in evidence even though it continues to be unregistered for collateral purpose but actual terms of transaction cannot be looked into. In instant case, however settlement deed in question produced by defendant was not only unregistered but also insufficiently stamped. That apart on an objection raised by plaintiff, Court had already passed an order directing impounding of document, which was never complied with by defendant. In such circumstances, document in question, which still remained insufficiently stamped could not be admitted in evidence even for collateral purpose. Application filed by defendant seeking to admit said document for collateral purpose is liable to be dismissed.