Case BriefsHigh Courts

Andhra Pradesh High Court: M. Satyanarayana Murthy, J., expressed that,

“If a party to the document wants to annul the document, he has to file a suit under Section 31 of the Specific Relief Act before the competent Civil Court and if, third party wants to annul the document, he has to approach the competent Civil Court and seek relief under Section 34 of the Specific Relief Act.”

Murthy and Sodemma were husband and wife with no children. Murthy was the absolute owner of agricultural land and a house, he had alienated his entire property to his wife during his lifetime.

Sodemma who was the maternal aunt of the petitioner, bequeathed the said property to him as he had taken care of their welfare at the old age. Therefore, petitioner became the absolute owner and possessor of the said property as per the registered Will deed executed by Sodemma.

Respondent 15, son of younger brother of Murthy with a mala fide intention to become the owner of Murthy’s property hatched a plan and fabricated an adoption deed to claim that Murthy and Sodemma adopted respondent 14 and got the signature of Murthy and Sodemma on the said fabricated deed by fraud and misrepresentation.

Later, in the year 2002, respondent 15 fabricated unregistered agreement of sale on the blank stamp papers signed by Murthy having believed him.

Respondent 14 filed for partition of the above-mentioned property by claiming that he is adopted son of Murthy and Sodemma.

Respondent 15 also filed for specific performance of unregistered sale agreement alleged to have been executed by Murthy after lapse of more than 17 years from the date of alleged execution of the said unregistered agreement. Murthy and Sodemma contested both the suits and denied the execution of both the fabricated adoption deed dated 24.05.1993 and alleged unregistered agreement of sale.

Further, it was submitted that during the pendency of both the said suits, respondent 17, the then Minister for Animal Husbandry alleged to have purchased the property, which is the subject matter of those two suits, and started construction of palatial building in the subject property and he by abusing his power as the Minister for Animal Husbandry made the authorities concerned to issue antedated permissions in contravention of Rules.

This Court had directed that there shall not be any construction on the subject property.

Crux of the Matter

Alleged playing of fraud on Sub-Registrar in mutating the name of respondents 14 and 15,  registration of property in the name of respondent 16 allegedly at the instance of respondent 17.

Petitioners claim was that when the decree was passed, appeal were pending against both the decrees and common judgment, execution of sale deed by respondents 14 and 15 in favour of respondent 16 allegedly at the instance of respondent 17 deviating the decree was serious illegality and it amounted to ‘fraud’.

Tahsildar, respondent 8 was not supposed to mutate the names of respondents 14 and 15 and only due to influence of respondent 17.

Petitioner claimed that the very mutation of the name of respondents 14 and 15 in the revenue record, now mutated the name of respondent 16 after completion of sale transaction, registered document was tainted by ‘fraud’.

Analysis, Law and decision

To constitute fraud, there must be a suggestion, as a fact, of that which is not true, by one who does not believe it to be true; the active concealment of a fact by one having knowledge or belief of the fact; a promise made without any intention of performing it; any other act fitted to deceive; any such act or omission as the law specially declares to be fraudulent. 

In the present matter, Court stated that,

In the absence of any interim direction, registration of a document when presented for registration satisfying the requirements under the Stamp Act and Registration Act is justified.

 Court added that Registrar is bound to register the document presented for registration unless there is prohibition from registration of such document pertaining to the land covered by Section 22A, 35 (3) and Section 71 of the Registration Act. But no such ground was raised in the present matter.

In Court’s opinion, execution of registered sale deed by respondent 14 and 15 in favour of respondent 16 by playing fraud was purely a mixed question of fact and law, such a question cannot be decided in writ petition while exercising power under Article 226 of the Constitution of India.

Supreme Court in Satya Pal Anand v. State of M.P., AIR 2016 SC 4995, held that “a party aggrieved by registration of a document is free to challenge its validity before a competent Civil Court.”

High Court held that while exercising jurisdiction under Article 226, this Court cannot annul document on the ground of ‘fraud’ and ‘misrepresentation’ since they are both mixed questions of fact and law, such roving enquiry cannot be conducted by the Constitutional Court to issue a writ of Mandamus as it is an extraordinary and discretionary relief.

When the documents are presented for registration before the Sub-Registrar, his duty is to register the same subject to any bar contained in any law and satisfying the requirements under the provisions of the Stamps and Registration laws. Such registration of document is nothing but discharging public duty.

Therefore, registration of document while discharging public duty by public officer cannot be said to be fraudulent act and such act will not attract the definition of fraud under Section 17 of the Indian Contract Act.

When can a document be cancelled?

It is settled law that the document can be cancelled only by filing suit before the Civil Court under Section 31 of the Specific Relief Act by a person, who is a party to the document.

If a third party intended to annul the document, he has to file a suit to declare the suit document as illegal and not binding on the plaintiff.

Due to lack of merits, no relief was granted and petition was dismissed.[Mangipudi Nagaraju v. State of Andhra Pradesh, 2021 SCC OnLine AP 3148, decided on 8-10-2021]

Case BriefsHigh Courts

Bombay High Court: The Division Bench of A.S. Chandurkar and Amit B. Borkar, JJ., addressees the present matter while explaining the existence or non-existence of the provisions for registration under Registration Act, 1908.

Petitioner sought a direction against respondent 5 – Sub-Registrar (Class-I) to register sale certificate on receipt of stamp duty and registration charges.

Further, the petitioner also sought a direction against respondent 7 – Government of Maharashtra, through Sales Tax Department to take action against the defaulters for evading taxes and attaching their movable properties and not to obstruct the sale of the properties by the petitioner – Bank for recovery of its dues.

Adding to the above, petitioner sought a declaration that respondents 1 and 2 are not entitled to recover the dues in view of the mandate of Section 26-E of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Petitioner—Bank had initiated proceedings under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Certificate of sale was issued in favour of the proprietor in the exercise of power under the Security Interest (Enforcement) Rules, 2002.

Main Grievance

The refusal to register the above-stated sale certificate by respondent 5 was the main grievance in the instant petition.

Analysis, Law and Decision

Bench noted that Sub-Section (1) of Section 22-A clearly provided that only if notification is published in the Official Gazette declaring that registration of any document or class of document is opposed to any public policy, only then the question of refusal of registration of the document will arise.

Court added that, even otherwise, since Section 22-A is no longer on the statute book, registration of the sale certificate could not have been refused on the ground of the same being in contravention of Section 22-A of the Act of 1908.

The ground of encumbrance to refuse registration of a document is in relation to marketable title of the property.

Bench referred to the decision of Supreme Court in Satyapal Anand v. State of Madhya Pradesh, (2016) 10 SCC 767, wherein it was held that:

“41. Section 35 of the Act does not confer a quasi-judicial power on the Registering Authority. The Registering Officer is expected to reassure that the document to be registered is accompanied by supporting documents. He is not expected to evaluate the title or irregularity in the document as such. The examination to be done by him is incidental, to ascertain that there is no violation of provisions of the 1908 Act. In the case of Park View Enterprises, it has been observed that the function of the Registering Officer is purely administrative and not quasi-judicial. He cannot decide as to whether a document presented for registration is executed by person having title, as mentioned in the instrument. We agree with that exposition.”

Purported source of power for rejection of sale certificate id under Clause (i) of Rule 44 of the Rules of 1961, which reads as follows:

“44(1). Before accepting any document for registration, a registering officer may not concern himself with its validity, but shall ascertain –
(a) …..

(b)…..
(c)…..
(d)…..
(e)…..
(f)…..
(g)…..
(h)…..
(i) that, if the transaction which is intended by the document, is prohibited by any existing act of Central or State Government, then the true copy of requisite permission or No Objection Certificate from the Competent Authority under the said act, has been attached along with the document, and that, the document  is not written in contradiction with any vital term or condition mentioned in that permission or No Objection Certificate.”

Bench opined that respondent 5 could not have purportedly invoked Clause (i).  Sub-Rule (1) of Rule 44 of the Rules of 1961 provides that before accepting any document for registration, the Registering Officer is concerned with its validity, but he should ascertain the various factors set out in Clauses (a) to (i).

Further, it was stated that Clause (i) of Rule 44 of the Rules of 1961 will apply only when the transaction is covered by the document which is prohibited by a Central or State Statute. There is an encumbrance of the Department of Sales Tax.

In view of the Supreme Court decision in Satyapal Anand v. State of Madhya Pradesh, (2016) 10 SCC 767, the Registering Officer under the Act of 1908 has no power to adjudicate upon the issue of marketable title to the property.

The power of the Registering Officer is purely administrative and is not quasi-judicial power. The Registering Officer has no right to decide whether a person who has presented the document for registration has marketable title or not.

 Non-Testamentary Document?

 Section 17(2)(xii) of the Act of 1908 specifically provides that a certificate of sale granted to any purchaser of any property sold by public auction by a Civil or Revenue Officer does not fall under the category of non-testamentary document which requires registration under Sub-Sections (b) & (c) of Section 17(1) of the Act of 1908.

It is well settled that when a property is sold by public auction, in pursuance of an order of the Court and the sale is confirmed by the Court in favour of the purchaser, the said becomes absolute and the title vests in the purchaser. A sale certificate is issued to the purchaser only when the sale becomes absolute.

“…when an auction purchaser derives title on confirmation of sale in his favour, no further deed of transfer from the Court is required.”

Hence, High Court held that respondent 5 ought to have taken into consideration the above-stated position of law before refusing the sale certificate issued by the Authorized Officer.

Priority of the secured creditor to recover its debt over liability to pay tax under MVAT Act

Court while stating that the issue was no longer res-integra, expressed that, if any Central Statute creates priority of a charge in favour of the secured creditor, the same will rank above the charge in favour of the State for a tax due under the Value Added Tax of the State. 

Therefore, it is the duty of respondent 5 to register the sale certificate issued in favour of the auction purchaser by the Authorized Officer under the provisions of the Rules of 2002.

Adding to the above, Bench stated that respondent 7 is duty-bound to take action against the defaulter for evading taxes and recovering its dues by attaching their movable properties.

“…the priority of charge created under Section 26-E of the Act of 2002 in favour of the secured creditor will rank above the charge in favour of a State for a tax due under Value Added Tax of the State.”

In view of the above, the Rule was made partly absolute and pending applications if any disposed of. [State Bank of India v. State of Maharashtra, 2021 SCC OnLine Bom 1544, decided on 4-08-2021]


Advocates before the Court:

 Shri M. Anilkumar, Advocate for the petitioner

Ms. S.S. Jachak, AGP for the respondents 1 to 4 & 6

Case BriefsHigh Courts

Chhattisgarh High Court: Sanjay K. Agarwal, J. allowed a petition filed by a Sub-Registrar duly appointed under Section 6 of the Registration Act, 1908, who was implicated in an FIR registered for the commission of the offences punishable under Sections 420, 120-B and 424 read with Section 34 IPC, and quashed the FIR insofar the petitioner was concerned.

While discharging his duties as Sub-Registrar, the petitioner allowed a sale deed to be registered. The said transaction regarding the subject land off-shot into the registration of FIR against the vendors alleging that the subject land was transferred fraudulently. The petitioner was also implicated in the FIR as an accused. Soumitra Kesharwani, Advocate for the petitioner, submitted that the petitioner purely acted in the capacity of Sub-Registrar under the Registration Act, and therefore, the FIR against him should be quashed. Per contra, S.K. Agrawal, Government Advocate submitted that the prosecution against the petitioner was strictly in accordance with the law and no exception could be taken against it. While, Govind Dewangan, Advocate for the vendors supported the case of the petitioner.

The question for consideration before the High Court was — whether the petitioner/Sub-Registrar while registering the sale deed, was required to make roving enquiry upon the absolute title of the vendors qua subject land before making registration of sale deed in favour of vendees?

The Court perused Sections 34(3) and 35(1) of the Registration Act and noted: “A conjoint reading of Sections 34 and 35 shows that the scope of enquiry to be made by the registering officer is limited by the Act, restricted to the factum of execution and the identity of the person executing document, other than the levy of stamp duty, collection of registration charges and the completion of procedural formalities such as attestation, etc. There is nothing in this provision requiring the registering officer to make a roving enquiry about the title of the person with regard to the property which is being sold by the sale of deed. In my considered opinion, provisions contained in Section 34(1) do not cast any duty on the registering officer to make an enquiry qua title of the person transferring the subject land to the transferee/purchaser”.

After referring to a conspectus of authorities, the Court reached a conclusion that registration of sale deed allowed by the petitioner/Sub-Registrar while acting in the capacity of Sub-Registrar was in accordance with law. Therefore, it was held that the FIR insofar as the petitioner was concerned, was liable to be quashed and orders were made accordingly. [Daduram Sidar v. State of Chhattisgarh, 2019 SCC OnLine Chh 59, decided on 20-06-2019]

Case BriefsSupreme Court

Supreme Court: In the matter where the moot question before the Court was that whether the Sub-Registrar (Registration) has authority to cancel the registration of any document including an Extinguishment Deed after it is registered? Similarly, whether the Inspector General (Registration) can cancel the registration of Extinguishment Deed in exercise of powers under Section 69 of the Registration Act, 1908, the Court said that in absence of any express provision regarding cancellation of registration, it is not open to assume that the Sub-Registrar (Registration) would be competent to cancel the registration of the documents in question. Similarly, the power of the Inspector General is limited to do superintendence of registration offices and make rules in that behalf. Even the Inspector General has no power to cancel the registration of any document which has already been registered.

In the present matter that was placed before the 3-Judge Bench of Ranjan Gogoi, P.C. Pant and A.M. Khanwilkar, JJ owing to the difference of opinion between Dipak Misra and V. Gopala Gowda, JJ while deciding the question as to authority of the sub-registrar to register the Extinguishment deed, the Court explained that the fact whether the document was properly presented for registration cannot be reopened by the Registrar after its registration. The power to cancel the registration is a substantive matter. Section 35 of the Act does not confer a quasi-judicial power on the Registering Authority. The Registering Officer is expected to reassure that the document to be registered is accompanied by supporting documents. He is not expected to evaluate the title or irregularity in the document as such. The examination to be done by him is incidental, to ascertain that there is no violation of provisions of the Act of 1908. He cannot decide as to whether a document presented for registration is executed by person having title, as mentioned in the instrument. The validity of such registered document can, indeed, be put in issue before a Court of competent jurisdiction.

Another question that was placed before bench was whether in absence of any specific Rule in the State of Madhya Pradesh with regard to the registration of an Extinguishment Deed, the general principle laid down in the case of Thota Ganga Laxmi v. Government of Andhra Pradesh, (2010)15 SCC 207 would be applicable where it was held that a unilateral cancellation deed cannot be registered with reference to Rule 2(k)(i) of the Rules framed by the State of Andhra Pradesh under Section 69 of the Act of 1908. The Court held that the said judgment was dealing with the express provision as applicable in the State of Andhra Pradesh and the dictum in that decision cannot have universal application to all the States and hence, in absence of such an express provision, in other State legislations, the Registering Officer would be governed by the provisions in the Act of 1908. [Satya Pal Anand v. State of M.P., 2016 SCC OnLine SC 1202, decided on 26.10.2016]