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Synopsis

The Madras High Court recently ruled that registering authorities and district registrars are quasi-judicial authorities who cannot annul sale deeds through summary proceedings.

The division bench of Justices SM Subramaniam and K Rajasekar held that in respect of the documents falling under Section 22-B of the Registration Act (the Act), if sought to be cancelled, then the Registrar is empowered to cancel the documents under Section 77-A of the Act. 

However, in respect of other documents registered prior to the amendment of 2022 to the Act, those documents are to be dealt with per the law prevailing at the time of registration by approaching the Civil Court of law.

It is to be noted that Section 22-B of the Act denotes refusal to register forged documents and other documents prohibited by law. Under this provision, the Registering Officer can refuse to register the following documents:

(1) forged document, 

(2) document relating to transaction, which is prohibited by any Central Act or State Act for the time being in force,

(3) document relating to transfer of immovable property by way of sale, gift, lease or otherwise, which is attached permanently or provisionally by a Competent Authority under any Central Act or State Act, for the time being in force or any Court or Tribunal and

(4) any other document as the State Government may, by notification, specify.

Court noted that Section 22-B was inserted by Tamil Nadu Act No.41 of 2022 with effect from August 16, 2022. Therefore, Section 22-B must be read along with Section 77-A of the Act, which was also inserted by the Tamil Nadu Act 41 of 2022, court held. 

It added that prior to amendment of 2022, Section 22-A and Section 22-B were not in force, thus, Section 77-A could not have retrospective effect.

"Section 77-A must be read in conjunction with Section 22-A and Section 22-B of the Act. Insertion of all these three Sections are to be understood holistically to avoid any inorderliness," court said. 

Court noted that under Section 77-A of the Act, the District Registrars are empowered to conduct summary proceedings and to identify fraud or impersonation with reference to the provisions of the Registration Act, more specifically, the procedures as contemplated under the Act and Rules.

However, it added that "the powers conferred to the District Registrar to cancel the document under the grounds of fraud or impersonation cannot be expanded for adjudicating the title, ownership or disputed issues between the parties".

"The District Registrars cannot conduct a trial nature proceedings by adjudicating the title deeds or other documents produced by the respective parties. Only if prima facie case has been established for cancellation on the ground of fraud or impersonation, then alone the District Registrar has to pass orders for cancellation of document," court underscored. 

Further, court observed any person executing a sale deed gets a property right and once the property right is acquired by him through the sale deed, such right becomes a constitutional right.

Property right is a constitutional right conferred under Article 300A of the Constitution of India. Such a constitutional right can be interfered only by the authority of law and certainly not through the summary proceedings, court said.

It stressed that property rights if infringed by conducting a summary proceedings from the hands of the District Registrar, the same would result in an unconstitutionality.

"The very insertion of Tamil Nadu Act 41 of 2022 dated 16.08.2022, amplifies that registration of a fraudulent document and certain document prohibited under law are to be refused. Refusal of registration would arise only in respect of documents presented after amendment. Therefore, in respect of documents already registered, the District Registrar cannot have power to cancel the document, wherein the allegations of fraud or impersonation have been raised. Thus, the provisions cannot have retrospective effect, so as to confer the power on the District Registrar to adjudicate the documents, whichever is registered prior to the amendment. All those cases have to be relegated to the Competent Civil Court of Law for adjudication," court held. 

The observations were made in a plea filed by Netvantage Technologies Pvt Ltd challenging the annulment of sale deeds. The company had acquired the property from a vendor in 2007, who had obtained it in 2004. Individual respondents claimed ownership and petitioned the district registrar to revoke the sale deeds involving both the vendor and the company. Subsequently, after summary proceedings, the district registrar invalidated the sale deeds.

Upon appeal, the Inspector General of Registration upheld this decision. Later, when the company sought redress from the high court, a single judge, acknowledging a title dispute, directed the parties to pursue resolution in the civil court and dismissed the plea without granting relief. Consequently, dissatisfied with the outcome, the company filed the current appeal.

The division bench noted that the subject document cancelled by the Competent Authority, was registered in 2004 and 2007 and during the relevant point of time, neither the District Registrar nor the Inspector General of Registration vested with powers to cancel the Sale Deed executed otherwise by following the procedures as contemplated under the Act and the Rules.

The remedy for an aggrieved person is to approach the Competent Civil Court of Law, seeking cancellation of Sale Deeds or to declare the same as null and void, court held. 

Further, court pointed out that as far as the order under challenge was concerned, the writ court considered the existence of civil dispute between the parties and relegated them to approach the civil court of law.

"The issue is not about title, but relates to powers of the Registering Officer, District Registrar and the Appellate Authority under the Act. The scope of cancellation of registered Sale Deed is an issue, which is to be necessarily dealt with in the writ proceedings, which has not been undertaken by the Writ Court", the division bench opined. 

Therefore, the bench allowed the appeal while setting aside the single-judge bench's order. 

Case Title: Netvantage Technologies Pvt Ltd v. The Inspector General of Registration and Stamps and Others