Madras High Court
N. Ramayee vs The Sub-Registrar
Author: N. Sathish Kumar
Bench: C.V. Karthikeyan, N. Sathish Kumar
W.P.No.674 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on Delivered on
12~10~2020 05 ~11~2020
CORAM
The Hon'ble Mr. Justice C.V. KARTHIKEYAN
and
The Hon'ble Mr. Justice N. SATHISH KUMAR
Writ Petition No.674 of 2020
N. Ramayee .. Petitioner
Vs
1.The Sub-Registrar,
Registration Department,
Valapady 636 115,
Salem District.
2. A. Ramesh .. Respondents
Petition filed under Article 226 of the Constitution of India praying to
issue a Writ of Certiorarified Mandamus by calling for the records relating
to the order dated 20.12.2019 made in RFL/Valapady/103/2019 on the file
of the first respondent, quash the same and consequently direct the first
respondent to register the sale agreement dated 19.12.2019 submitted by the
Petitioner.
For Petitioner ... Mr.Murugamanickam
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W.P.No.674 of 2020
Senior Counsel for
Ms.Zeenath Begum
For Respondents ... Mr.S.R. Rajagopal
Additional Advocate General for
Mr.T.M. Pappiah
Special Govt. Pleader for
Mr.B. Kannan
Government Advocate [for R-1]
Mr.S. Suresh Kumar [for R-2]
ORDER
C.V.KARTHIKEYAN.J, In W.P.(MD) No.24429 of 2018, N.Raju Vs. District Registrar, Trichy, and Another, by order dated 07.03.2019, a learned Single Judge of this Court had directed the 2nd Respondent, Sub-Registrar, Sub-Registrar's Office, Thiruverumbur, Trichy, to register an Agreement of Sale entered into by the Petitioner, notwithstanding the fact that the Petitioner had earlier registered an Agreement of Sale with respect to the same property. The objections raised by the 2nd Respondent that the earlier agreement was still in force, was brushed aside by the learned Single Judge. Page 2/36 http://www.judis.nic.in W.P.No.674 of 2020
2.In W.P.No.33601 of 2019, Venkatamma Vs. Sub-Registrar, Hosur and Another, by order dated 02.12.2019, a learned Single Judge of this Court had directed the Petitioner therein who wanted to register a Settlement Deed, notwithstanding the fact that an Agreement of Sale with respect to the same property had been registered, to approach the competent Civil Court and seek a declaration that the Agreement of Sale was null and void and unenforceable.
3.In the instant Writ Petition No.674 of 2020, the learned Single Judge, faced with two directly contradictory views by two learned Single Judges, had, exercising prudence, placed the matter before the Hon'ble Chief Justice to form a Larger Bench to resolve the conflict of views.
4.The Hon'ble Chief Justice was pleased to constitute this Bench to examine the issues.
5.Naturally, the issues raised would have to be addressed by Page 3/36 http://www.judis.nic.in W.P.No.674 of 2020 meandering through the provisions of the Registration Act, 1908, vis-a-vis documents which presented for registration and the circumstances under which a Registering authority can refuse registration. The salient features of the Transfer of Property Act, 1882, will also have to be examined with specific reference to the rights created under an Agreement of Sale.
6.Erudite views and counter views were advanced by Mr.T.Murugamanickam, learned Senior Counsel and Mr.S.R.Rajagopal, learned Additional Advocate General and M/s.C.Prabakaran and S.Suresh Kumar, learned counsels.
7.The assistance referred by Ms.Zeenath Begum and Ms.K.Ponmani, learned counsels and Mr.T.M.Pappiah, learned Special Government Pleader, has to be also appreciated.
8.My learned Brother had undertaken the task of venturing into a discussion on all the relevant aspects. I agree and concur with the view taken by him namely, that there cannot be a refusal for registering a Page 4/36 http://www.judis.nic.in W.P.No.674 of 2020 document as presented by the Registering authority, except on the grounds as given under the provisions of the Registration Act, 1908. N. SATHISH KUMAR, J.
This matter has been placed for reference in view of the conflicting orders passed by the learned single judges on the issue as to whether once sale agreement is registered by the Vendor, the subsequent documents in respect of the same immovable property could be refused to be registered by the Registrar. The sum and substance of the reference is that once an agreement for sale is registered under the Registration Act, the vendor is debarred from effecting any agreement or transfer in respect of the same immovable property, subject matter of the agreement.
2. Heard Mr.Murugamanickam, learned Senior Counsel appearing for the writ petitioner, Mr.S.R. Rajagopal, learned Additional Advocate General appearing for the 1st Respondent/Sub-Registrar, Salem and Mr.S. Suresh Kumar appearing for the 2nd Respondent.
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3. Before dealing with the substantive provision of law as to the registration and also transfer of properties, we feel it necessary to record the object of the Registration Act. The object and purpose of the Registration Act amongst other things is to provide a method of public registration of documents so as to give information to people regarding legal rights and obligation arising or affecting a particular property, and to perpetuate documents which may afterwards be of legal importance and also to prevent fraud. (Jogi Doss Vs. Fakir Panda AIR 1970 Ori.22)
4. The object of registering a document is to give public notice to the world that such a document has been executed, to prevent fraud and forgery and to secure a reliable and complete information or encumbrance over the immovable property. When we deal with various provisions of the Registration Act which empower the Registrar to refuse the document for registration, Section 19 of the Registration Act deals with the power of the Registrar to refuse to register the document, when the document presented for registration is in a language which the registering officer does not understand, and it is not a language which is commonly used in the district, he shall refuse to register the document, unless it is accompanied by a true Page 6/36 http://www.judis.nic.in W.P.No.674 of 2020 translation into a language commonly used in the district. Section 20 of the Act gives a discretion to the Registrar to refuse to accept any document which contain interlineations, blanks, erasures or alterations, unless those are attested by the persons executing the document with their signatures.
5.A reading of the above section and Sub-Clause 2 together makes it clear that even there are errors, interlineations, blanks, erasures or alterations, there is no bar for registration of the document. Similarly Section 21 of the Act deals with the power of the Registrar not to accept a document which does not contain the description of the property sufficient to identify the same. The above section also makes it clear that such refusal for acceptance of document to make the executant to give correct particulars. The combined reading of Section 19 to 21 of the Act, gives power to refuse the document only in order to set right things properly. Otherwise, if the description of the property is sufficient to identify the property, the Registrar has no other reason except to register the document.
6. Section 22-A was inserted by State of Tamil Nadu and Section Page 7/36 http://www.judis.nic.in W.P.No.674 of 2020 22-A of The Registration (Tamil Nadu Amendment) Act, 2008, which reads as follows:
"22-A Refusal to register certain doucments :
Notwithstanding anything contained in this Act, the registering officer shall refuse to register any of the following documents namely:-
(1) instrument relating to the transfere of immovable properties by way of sale, gift, mortgage, exchange or lease -
(i) belonging to the State Government or the local authority or Chennai Metropolitan Development Authority established under Section 9-A of the Tamil Nadu Town and Country Planning Act, 1971;
(ii) belonging to, or given or endowed for the purpose of any religious institution to which the Tamil Nadu Religious and Charitable Endowments Act, 1959 is applicable.Page 8/36
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(iii) donated for Bhoodan Yagna and vested in the Tamil Nadu State Bhoodan Yagna Board established under Section 3 of the Tamil Nadu Bhoodan Yagna Act, 1958; or
(iv) of Wakfs which are under the superintendence of the Tamil Nadu Wakf Board established under the Wakf Act, 1995.
Unless a sanction in this regard issued by the competent authority as provided under the relevant Act or in the absence of any such authority, an authority so authorised by the State Government for this purpose, is produced before the registering officer.
(2) instrument relating to the transfer of ownership of lands converted as house sites without the permission for development of such land from planning authority concerned:Page 9/36
http://www.judis.nic.in W.P.No.674 of 2020 provided that the house sites without such permission may be registered if it is shown that the same house site has been previously registered as house site."
7. Section 23 deals with the time limit within which the document shall be presented for registration. Section 34 of the Act deals with the power of Registrar to make any enquiry which reads as follows:
34. Enquiry before registration by registering officer :- (1) Subject to the provision contained in this part and in Sections 41, 43, 45,69, 75, 77, 88 and 89, no document shall be registered under this Act, unless the persons executing such document, or their representatives, assigns or agents authorized as aforesaid, appear before the registering officer within the time allowed for presentation under Sections 23, 24, 25 and 26 : Provided that, if owing to urgent necessity or unavoidable accident all such persons do not so appear, the Registrar, in cases where the delay in appearing does not exceed four months, may direct that on payment of a fine not exceeding ten times the amount of the proper registration fee, in addition to the fine, if any payable under Section 25, the Page 10/36 http://www.judis.nic.in W.P.No.674 of 2020 document may be registered. 21 (2) Appearances under sub-section(1) may be simultaneous or at different times. (3) The registering officer shall thereupon - (a) enquire whether or not such document was executed by the persons by the whom it purports to have been executed ; (b) satisfy himself as to the identity of the person appearing before him and alleging that they have executed the document ; and
(c) in the case of any person appearing as a representative, assign or agent, satisfy himself of the right of such person so to appear. (4) Any application for a direction under the proviso to sub-section (1) may be lodged with a Sub- Registrar, who shall forthwith forward it to the Registrar to whom he is subordinate. (5) Nothing in this section applies to copies of decrees or orders.
8. A reading of the above Section 34 makes it very clear that enquiry is contemplated before the registration by the registering officer to ascertain the person who is competent to present a document for registration. The Registrar has only to satisfy on three aspects that he shall enquire whether the document was executed by the persons by the whom it purports to have Page 11/36 http://www.judis.nic.in W.P.No.674 of 2020 been executed; secondly the Registrar can satisfy himself as to the identity of the person appearing before him averring that he executed the document. The third requirement will be a situation where a person is appearing as a representative in which case he shall consider whether that such a person has lawful right to represent. The scope of enquiry to be made by Registering officer is limited by the Act to the factum of execution and the identity of person executing the document.
9. Section 34-A of the Registration Act, 1908, reads as follows:
34-A. Person claiming under document for sale of property also to sign document:- Subject to the provisions of this Act, no document for sale of property shall be registered under this Act, unless the person claiming under the document has also signed such document."
The above makes it clear that the person claiming under the document has also to sign such document. Otherwise the document cannot be registered.
10. Section 35 deals with the procedure on admission and denial of execution of document. Section 35(3) reads as under: Page 12/36
http://www.judis.nic.in W.P.No.674 of 2020 S.35(3) (a) If any person by whom the document purports to be executed denies its execution, or
(b) if any such person appears to the registering officer to be a minor, an idiot or a lunatic, or
(c) if any person by whom the document purports to be executed is dead, and his representative or assign denies its execution, the registering officer shall refuse to register the document as to the person so denying, appearing or dead:
Provided that, where such officer is a Registrar, he shall follow the procedure prescribed in Part XII:
11. On such refusal an appeal also provided under Section 72 of the Act. Thereafter, the procedure contemplated for filing a suit as against such order under Section 77 of the Act.
12. The learned Senior counsel for the Petitioner relied upon the Page 13/36 http://www.judis.nic.in W.P.No.674 of 2020 judgment in Latif Estate Line India Ltd v. Hadeeja Ammal [2011 (2) CTC 1] wherein it has been held that there is no provision in the Transfer of Property Act or in the Registration Act, which deals with the Cancellation of Deed of sale. The reason is that the execution of a Deed of Cancellation by Vendor does not create, assign, limit or extinguish any right, title or interest in the immovable property and the same has no effect in the eye of law.
13. In Satya Pal Anand v. State of M.P. [(2016) 10 SCC 767] the Honourable Apex Court has held that the role of Sub-Registrar (Registration) stands discharged, once the document is registered. Power to cancel the registration is a substantive matter.
14. In K.S. Vijayendran vs. The Inspector General of Regulation & Another [2011(2) LW 648] this court has held as follows:
"None of the provisions of the Act or the Rules contemplate the Registrar to require the party appearing before him for presenting document to produce the original title deeds relating to the property so as to satisfy Page 14/36 http://www.judis.nic.in W.P.No.674 of 2020 himself about the ownership of the executant in respect of the property sought to be executed.
11. A close reading of the Act as well as the Rules, elicited above, shows that the reason which has been made out by the registering authority for refusing the registration does not find place either under the Act or the Rules. The scope of enquiry by the registering authority is restricted only as per the statutory provisions enunciated under the Act as well as the Rules framed thereunder and the authority cannot do anything which is contrary to the provisions of the statute."
15. Rule 22 of the Registration Rules deals with the power of registering officer to proceed with all requirements prescribed in the Act. Rule 23 to 26 deals with corrections, erasures or alterations, accompany of maps, verifying the correct survey numbers, sub-divsion etc., Rule 27 deals with the power of Registering officer to collect deficit stamp duty under Section 41 of the Stamp Act.
16. Rule 55 states that it is not the duty of the Registering Officer to Page 15/36 http://www.judis.nic.in W.P.No.674 of 2020 enquire into the validity of the document. However, he is bound to consider objections in any of the grounds stated in the rules namely:
(a) that the parties appearing or about to appear before him are not the persons they profess to be;
(b) that the document is forged;
(c) that the person appearing as a representative, assign or agent, has no right to appear in that capacity.
(d) that the executing party is not really dead, as alleged by the party applying for registration; or
(e) that the executing party is a minor or an idiot or a lunatic.
17. Rule 162 of the Registration Rules reads as follows:
"162. When registration is refused the reasons for refusal shall be at once recorded in Book 2. They will usually come under one or more of the heads mentioned below---
I. Section 19.---That the document is written in a language which the Registering Officer does not understand and which is not commonly used in the District, and that it is unaccompanied by a true translation and a true copy.Page 16/36
http://www.judis.nic.in W.P.No.674 of 2020 II. Section 20.---That it contains unattested interlineations, blanks, erasures or alterations which in the opinion of the Registering Officer require to be attested.
III. Section 21.---(1) to (3) and Section 22.-- That the description of the property is insufficient to identify it or does not contain the information required by Rule 18.
IV. Section 21(4).---That the document is unaccompanied by a copy or copies of any map or plan which it contains.
V. Rule 32.---That the date of execution is not stated in the document or that the correct date is not ascertainable.
VI. Sections 23, 24, 25, 26, 72, 75 and 77.---That it is presented after the prescribed time.
VII. Sections 32, 33, 40 and 43.---That it is presented by a person who has no right to present it.
VIII. Section 34.---That the executing parties or their representatives, assigns, or agents have failed to appear within the prescribed time.
IX. Sections 34 and 43.---That the Registering Officer is not satisfied as to the identity of a person appearing before him who alleges that he has executed the document.Page 17/36
http://www.judis.nic.in W.P.No.674 of 2020 X. Sections 34 and 40.---That the Registering Officer is not satisfied as to the right of a person appearing as a representative, assign, or agent so to appear.
XI. Section 35.---That execution is denied by any person purporting to be an executing party or by his agent. Note:-When a Registering Officer is satisfied that an executant is purposely keeping out of the day with a view to evade registration of a document or has gone to a distant place and is not likely to return to admit execution within the prescribed time, registration may be refused the non- appearance being treated as tantamount to denial of execution.
XII. Section 35.---That the person purporting to have executed the document is a minor, an idiot or a lunatic. Note:-When the executant of a document who is examined under a commission under Section 38 of the Act is reported by the Commissioner to be a minor, an idiot or a lunatic registration may be refused and it is not necessary that the Registering Officer should personally examine the executant to satisfy himself as to the existence of the disqualification.
XIII. Section 35.---That execution is denied by the representative or assign of a deceased person by whom the document purports to have been executed. Note:-When some of the representatives of a deceased executant admit and others deny execution, the registration of Page 18/36 http://www.judis.nic.in W.P.No.674 of 2020 the document shall be refused in toto, the persons interested being left to apply to the Registrar for an enquiry into the fact of execution.
XIV. Sections 35 and 41.---That the alleged death of a person by whom the document purports to have been executed has not been proved. XV. Section 41.---That the Registering Officer is not satisfied as to the fact of execution in the case of a will or of an authority to adopt presented after the death of the testator or donor.
XVI. Sections 25, 34 and 80.---That prescribed fee or fine has not been paid.
XVII. Section 230(A) of the Income Tax Act, 1961 (Act 43 of 1961).--That the prescribed certificates from the Income Tax Officer has not been produced.
XVIII. Section 10 of the Tamil Nadu Land Reforms (Fixation of Ceiling of Land) Act, 1961 (Act 58 of 1961).---That the declaration has not been filed by the transfer.
XIX. Section 27 of the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978 (Act 24 of 1978).---That the statement has not been filed by the transferror and transferee. Page 19/36 http://www.judis.nic.in W.P.No.674 of 2020 Rule 162 makes it obligatory for the Registering Officer to record in Book No.2 the reasons for refusal to register a document. Interestingly, rule 162 lists out the various heads under which the refusal to register may fall. [Rajambal v. Inspector General (Registration), Government of Tamil Nadu, 2012 (1)CWC 627].
18. Conspectus of the various provisions referred above make it clear that the Registering Officer cannot go into the title of the property in respect of which document is presented. However, under various provisions he has power to refuse to accept the document for registration unless mistakes found in the document are set right properly. Except Section 22-A of the Tamil Nadu Act, other provisions referred above do not give any power to the registering officer to refuse to register the document presented by the person executing documents. Rule 60 also states that the registering officer can only enquire about the executant and the claimant of the instrument of sale regarding whose identity he has to satisfy himself. But the provisions does not give absolute power to refuse registration. As already indicated Page 20/36 http://www.judis.nic.in W.P.No.674 of 2020 above, the purpose and object of the Act is to give a public notice about any encumbrance in the immovable property.
19. It is also relevant to note that even when the document is undervalued and the Registrar registering the document has reason to believe that the market value of the property has not been truly set out in the document, he has to receive the document and refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon as per Section 47-A of the Stamp Act. Even on such ground also the Registrar has no right to refuse to register the document.
20. In the light of the above when we deal with the various provisions of the Transfer of Property Act the question arises as to whether the transfer is restricted to one time in respect of the immovable property, unless the previous transfer or any agreement is set aside in the court of law, and other transfer is permissible? The answer is absolutely "No" for the following reasons:
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http://www.judis.nic.in W.P.No.674 of 2020 The property of any kind may be transferred, except as otherwise provided by the transfer of property Act or by any other law for the time being, as provided in Section 6 of the Transfer of property Act.
21. Every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the extent and in the manner allowed and prescribed by any law for the time being in force, as per Section 7 of the Transfer of Property Act. The reading of the above section makes it very clear that even a person not entitled transferable property is competent to transfer such property when he was authorised to dispose of such property.
22. Section 41 of the Transfer of Property Act deals with the power of the ostensible owner to effect the transfer of the property with consent, express or implied of the real owner.
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23. From the principle underlined in the Section 41 of the Transfer of Property Act is that the ostensible owner of the property, with the consent express or implied and representing himself as owner of the property though he is not having the title, can deal with the property. Similarly, Section 42 of the T.P. Act deals with the transfer by a person having authority to revoke the former transfer. When a person transfers any immovable property reserving power to revoke the transfer, and subsequently transfers the property for consideration to another transferee, such transfer operates in favour of such transferee subject to any condition attached to the exercise of the power as a revocation of the former transfer to the extent of the power.
24. Similarly section 43 of Transfer of Property Act deals with transfer by unauthorised person who subsequently acquires interest in the property transferred. The above section makes it very clear that even a person who has no title over the property purports to transfer to another by deed and when he subsequently acquires any interest in the property, sufficient to satisfy the transfer, the title would pass to the transferee without any further act on the part of the transferor, provided the transferee Page 23/36 http://www.judis.nic.in W.P.No.674 of 2020 has not rescinded the transfer and opts for such effectuation. The above principle also makes it very clear even a transfer by unauthorised person is not prohibited. Only the validity of the title would be subject to his acquiring subsequent interest in the property.
25. Section 48 of the Transfer of Property Act deals with priority of rights created by transfer, which reads as follows:
48. Where a person purports to create by transfer at different times rights in or over the same immoveable property, and such rights cannot all exist or be exercised to their full extent together, each later created right shall, in the absence of a special contract or reservation binding the earlier transferees, be subject to the rights previously created.
26. The above section determines the priority when there are successive transfers, where the person creates transfer at different times right in or over the same immovable property, such rights cannot all exist or be exercised to their full extent together, each later created right shall, in the Page 24/36 http://www.judis.nic.in W.P.No.674 of 2020 absence of a special contract or reservation bind the earlier transferee and be subject to the rights previously created.
27. Reading of the above section makes it clear that there is no bar for successive transfers. However, the rights in later transfer shall always be subject to the rights already created in the earlier transfer.
28. It is also pertinent to note that even if transfer is made during a pending suit, such transfer is not void but is subject to the result of the suit. Section 53 of the Transfer of Property Act, deals with fraudulent transfer. Even such fraudulent transfer is made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. Even in such cases the rights of transferee in good faith and for consideration is protected.
29. Section 56 of the Transfer of Property Act deals with marshalling by subsequent purchaser. The above provision also makes it clear that when the owner of two or more properties mortgages them to one person Page 25/36 http://www.judis.nic.in W.P.No.674 of 2020 and then sells one or more of the properties to another person, the buyer is in the absence of a contract to the contrary, entitled to have the mortgage- debt satisfied out of the property or properties not sold to him, so far as the same will extend, but not so as to prejudice the rights of the mortgagee or persons claiming under him or of any other person who has for consideration acquired an interest in any of the properties. The above provision also makes it clear that though there were mortgages already created there is no bar for subsequent transfer of the property. But subsequent transfer is subject to the mortgage earlier created.
30. Section 57 of the Transfer of Property Act deals with the Provision by Court for encumbrances and sale freed therefrom. The Section also makes it clear that even the properties already encumbered can be brought under court sale and the encumbrance can be freed after issuance of notice to the encumberer.
31. It is also relevant to note that even a mortgage is a transfer of an interest in specific immoveable property for the purpose of securing the Page 26/36 http://www.judis.nic.in W.P.No.674 of 2020 payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. Therefore, it cannot be said that once the encumbrance is made by creating a mortgage, the mortgagor is totally prohibited from effecting any further transfer. In fact if any such transfer is made, it is always subject to the mortgage alone. If the analogy is drawn from the judgement of the single judge in W.P.No.33601 of 2019 [Venkattamma vs. The Sub-Registrar and another] that agreement once registered there cannot be any subsequent settlement deed is accepted, such situation even may lead to the contention that even where a simple mortgage is created, the mortgagor cannot transfer the property for any other purpose even for a lease, even though lease is just transfer of right to enjoy the property. The judgement of the learned single Judge in W.P.No.33601 of 2019 [Venkattamma vs. The Sub-Registrar and another] holding that unless there is declaration declaring the agreement for sale is null and void is obtained from civil court no further transfer could be registered, which is, in our view, not according to law. It is also to be noted that in the above case only agreement for sale was registered. It is relevant Page 27/36 http://www.judis.nic.in W.P.No.674 of 2020 to extract Section 54 of the Transfer of Property Act
54. “Sale” defined.—‘‘Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Sale how made.—3Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument. 1In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property. Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property. Contract for sale.—A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property."
32. The contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest or charge on such property. The agreement of sale is merely a document creating right to obtain a document Page 28/36 http://www.judis.nic.in W.P.No.674 of 2020 of sale on fulfilment of terms and conditions specified therein and it is only capable of enforcement in the event of breach of contract by the other side. Even to enforce such agreement for specific performance, the agreement holder has to establish not only the contract but other grounds viz., ready and willingness on his part to get a decree of specific pereformance provided the suit is filed within time.
33. In Narandas Karsondas vs. S.K.Kamtam & another[AIR 1977 SC 774] the Honourable Supreme Court also considered the nature of the right created on the immoveable property by a contract for sale. It has been stated that contract of sale in view of section 24 of T.P.Act does not of itself create any interest in or charge on the property. The personal obligation created by a contract of sale (as recognised in Section 3 of the Specific Relief Act and section 91 of the Trust Act is described in Section 40 of the T.P. Act) as an obligation arising out of contract. An annexure to the ownership of the property, but not amounting to interest or easement therein.
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34. Section 19(b) of Specific Relief Act also protects the subsequent transferee for value and for consideration in good faith without notice of the original contract. Even if a person has no title to the property has entered into a contract for sale, the transferee can seek for specific performance under section 13 of the Specific Relief Act.
35. From a combined reading of various provisions of the Transfer of Property Act as referred above, we are of the view that there is no bar for creating subsequent transfer of the immovable property. Effect of the subsequent transfer is always subject to the earlier transfer created by the transferor of the immovable property. Therefore, it cannot be said that since the agreement for sale is registered the owner viz., the Vendor has no right to execute any document. In Venkatamma's case [W.P.No.33601 of 2019] in fact settlement deed has been presented for registration by the Vendor after three years of the so called contract. Merely on the basis of the agreement for sale, the registrar refused to register the document which is against the very substantive law of the country. If such approach is accepted a situation may arise in every loan transaction if some contract is Page 30/36 http://www.judis.nic.in W.P.No.674 of 2020 registered, merely because it shown in the encumbrance as a registered agreement, the owners of the property would be prohibited from dealing with the property as long as the encumbrance finds place in the encumbrance certificate. Such situation in fact would lead to deprive the right of the owner of the property to deal with the property which is a constitutional right.
36. In view of the above, we are of the view that the view taken by the learned single judge in W.P.No.33601 of 2019 [Venkattamma vs. The Sub-Registrar and another], does not lay down correct position of law and the same is hereby overruled. Another single Judge in W.P.(MD) No.24429 of 2018 [Raju vs. The District Registrar, Trichy and another] had directed to register the subsequent agreement, however without any reasons. In the above judgment also the learned single Judge has not gone into the provisions of law except issuing a mere direction. The said judgement is also not based on any discussion on substantive law or proceedings and therefore does not lay down any law.
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37. Accordingly, we answer the reference as follows:
If an agreement for sale is registered in respect of immovable property, the same will not be a bar for the owner of the property to effect subsequent transfers in respect of the same property. The Registrar has no right to refuse to register the document, except the documents relating to immovable properties mentioned in Section 22-A of the Tamil Nadu Act and as contemplated under Rule 162 of the Registration Rules.
38. It is also brought to our notice about the new circular in No. 24011/C1/2020 dated 08.10.2020. It is the contention of the learned Additional Advocate General that the Registrar has power to regulate the registration in order to prevent fraud and hence, the Registrar is having powers under the Registration Act to regulate the registration and the right to refuse the document and that such power is available under Section 71 of the Registration Act. Such contention is not acceptable for the simple reason that the circular bars transfer of property on the ground that when a lease is already executed in respect of the property, without expiry of the lease, transfer cannot be permitted or without consent of lessee no Page 32/36 http://www.judis.nic.in W.P.No.674 of 2020 registration is permissible. Further, insisting a no objection from mortgagee before registration is also against the very substantive provision of law. If any property is sold with existing mortgage, the transferee steps into the shoes of mortgagor. He has the right to redeem the property by paying the mortgage money. Therefore in the name of regulating the registration, any circular which is in the nature of violating the substantive provision of law, which deals with the transfer of property, then such circular cannot stand in the eye of law. If the contention of learned Advocate General that without seeking declaration and cancellation of the agreement of sale, subsequent agreement or transaction cannot be registered, is accepted then such restriction, in fact, infringes the very Constitutional right of the citizen provided under Article 300 A of the Constitution.
39. We are of the view that except as provided in the Registration Act and any other statute, the Registrar has no power to refuse to register a document. Though the object of the Act is to prevent fraud, such occasion arises only where some private properties are notified under the Tamil Nadu Private Forest Act. In such case, sale of such property without Page 33/36 http://www.judis.nic.in W.P.No.674 of 2020 permission of the Collector of the District is void. Only when such notification is available in respect of any property, the Registrar can verify whether the sanction of the Collector is obtained or not. Similarly, whenever properties have been declared as forest land or elephant corridor, etc., and the notification is available with the Registrar, based on the above notification he can exercise power. Except the above, the Registrar has no power to refuse to register the document.
40. As already indicated, the purpose of registration is only to give a public notice. It is for the buyer or subsequent transferee to make reasonable enquiry. Doctrine of caveat emptor will also apply to every transfer. It is for them to verify the title of the property by making reasonable enquiry. At any event, subsequent transfer will always be subject to the rights already created. Therefore, it cannot be said that merely because agreement for sale is registered without obtaining decree of declaration that such agreement is void, subsequent transfer is prohibited and cannot be registered. We hold that as discussed in our judgement, Registrar has no right to refuse to register the subsequent document on the Page 34/36 http://www.judis.nic.in W.P.No.674 of 2020 basis that agreement of sale was already registered in respect of same property. Accordingly, the reference is answered. Post the writ petition in W.P.No.674 of 2020 before the learned single judge for disposal.
[C.V.K., J.] [N.S.K.,J.]
05 -11-2020
Index : yes
Internet : yes
smv/ggs
Page 35/36
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W.P.No.674 of 2020
C.V. KARTHIKEYAN, J.
and
N. SATHISH KUMAR, J.
smv/ggs
Order in:
Writ Petition No.674 of 2020
05-11-2020
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