Critical Analysis of The Registration Act, 1908 PDF

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Critical Analysis of The Registration Act, 1908...

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The Registration Act, 1908: Critical Analysis of the 1908 Act

Authored by: Shivam Goel, B.Com (H), LL.B. (Delhi University), LL.M. (NUJS); Author of: Corporate Manslaughter and Corporate Homicide: Scope for a New Legislation in India, Penguin-Partridge, Bloomington, 2015; and Concept of Rights in Islam, Lambert Publication, Germany, 2014. Associate, S.G. & Co. (New Delhi); [email protected]

The Registration Act, 1908: Critical Analysis of the 1908 Act Introduction: Registration is deemed to prevent fraud. The object of registering a document is to give notice to the world that such a document has been executed. Registration of a document does not confer the title over the property as mentioned in the document registered, but provides an evidence of such transactions being registered, based on which title over the property could be established. For registration of documents relating to conveyance of properties belonging to Government, local bodies or religious institutions, “No Objection Certificate” is required from the relevant authorities concerned. Test of Compulsory Registration: The test for compulsory registration of a document is the intention of parties as expressed in the document concerned. What is material for the purpose of compulsory registration of a document under Section 17(1) of the Registration Act, 1908 is that: 

The document (non-testamentary instrument1) must create, assign, declare, extinguish or limit,



whether in present or in future,



any right, title or interest, whether vested or contingent,



of the value of Rs. 100 and upwards, to or in



Immovable Property.

Note: 1. Registration of Will is optional. A Will is made to interfere in the line of succession. 2. According to Section 17(1) (a) of the Registration Act, 1908, instrument of gift of immovable property requires compulsory registration, whatever may be the value of the gift or the immovable property gifted. Section 123 of the Transfer of Property Act, 1882 requires that gift of immovable property must be registered. 3. Gift is a transfer of certain movable or immovable property voluntarily made and without consideration by a person called as the donor to a person called as the donee, and which is accepted by or on behalf of the donee; such acceptance must be given 1

A non-testamentary instrument is a document which is intended to operate immediately and is in nature final and irrevocable. Where a document does not purport to convey anything in the presenti, it is a Will.

within the lifetime of the donor and if the donee dies before acceptance, then the gift is void. 4. A document or instrument of gift of immovable property requires compulsory registration and it operates from the date of the execution of the gift deed. 5. Section 122 and Section 123 of the Transfer of Property Act, 1882 read with Section 47 of the Registration Act, 1908 provides that, the gift becomes enforceable from the date of the signing of the gift deed; it is also pertinent to mention here that mere registration of the gift deed would not by itself be an evidence of gift having been made, as the ingredients set forth under Section 122 of the Transfer of Property Act, 1882 are required to be fulfilled. 6. According to Section 129 of the Transfer of Property Act, 1882, a gift of moveable property in contemplation of death shall not be deemed to have affected any of the rules under the Muhammadan law. Hence, the law with respect to gift(s) and its validity have to be understood solely with regards to the Muslim law. Thus, Section 129 of the Transfer of Property Act, 1882 excludes the applicability of Section 123 of the Transfer of Property Act, 1882 on gift(s) been made by the Muslims. A gift under the Muslim law is called “Hiba”. 7. In the case of, Hafeeza Bibi & Ors. v. Shaikh Farid, (2011) 5 SCC 654, the Supreme Court of India held that, the position in regards to gift(s) under Muslim law is well settled and the same has been stated and restated time and again, that is, there are three (3) essentials of a gift under the Muhammadan law, these are: (1) Declaration of the gift by the donor; (2) Acceptance of the gift by the donee; and (3) Delivery of possession. Though rules of Muhammadan law do not make writing essential to the validity of a gift, an oral gift fulfilling all the three (3) essentials makes the gift complete and irrevocable. However, the donor may record the transaction of gift in writing. 8. If a Muslim gifts an immovable property to a Hindu by way of a written document, does it require registration? No. It is the document and not the transaction that is required to be registered. Similarly a document which does not create interest in any immovable property is not required to be registered. A document in question if it is not an operative document, and it does not contain all the essentials of the transaction, then it does not require registration. Non-registration of

documents as required to be registered makes them unacceptable to be read into evidence of any transaction affecting such property or conferring such power. The registration work is carried out by the Sub-Registrars in their sub-areas according to their jurisdictional or territorial sub-divisions in each district under the control of the Registrar posted for the aforesaid purpose at the district headquarters. If the Sub-Registrar refuses the registration or lingers it for no cogent reason or the person affected otherwise feels aggrieved from the treatment of the meted out to him at the office of the Sub-Registrar, then he may make a complaint thereof to the Registrar of the district for redressal of his grievance. Important Terms: Doctrine of Res Nullius: This doctrine states that, no property can be without an owner at any point of time. Moveable Property: According to Section 2(9) of the Registration Act, 1908, moveable property includes standing timber, growing crops and grass, fruit upon and juice in trees, and property of every other description, except immovable property. Immovable Property: The term immovable property includes: land; benefits arising out of land; and things attached to the earth, or permanently fastened to anything attached to the earth (See: Section 3(26) of the General Clauses Act, 1897). For the purposes of the Transfer of Property Act, 1882, immovable property does not include: standing timber, growing crops and grass. Document: The term document has not been defined under the Registration Act, 1908, but, it has been defined under Section 3(16) of the General Clauses Act, 1897 as follows: “document” shall include any matter written, expressed or described upon any substance by means of letters, figures or marks or by more than one of these means, which is intended to be used or which may be used, for the purpose of recording that matter. According to Section 3 of the Indian Evidence Act, 1872, a document shall mean any matter expressed or prescribed upon any substance by means of letters or marks intended to be used for the purpose of recording that matter. Section 29 of the Indian Penal Code, 1860 provides a similar definition of the term ‘document’. Instrument: The term ‘instrument’ has not been defined under the Registration Act, 1908; however, the same has been defined under Section 2(14) of the Indian Stamp Act, 1899 to

include every document by virtue of which any right or liability is, or, purports to be, created, transferred, extended, extinguished or recorded. Important Case-Laws: 1. Suraj Lamps & Industries Pvt. Ltd. v. State of Haryana, AIR 2012 SC 206: It was held as follows: a. That an immovable property can be legally and lawfully transferred/ conveyed only by a registered deed of conveyance. b. Transactions in the nature of ‘General Power of Attorney Sales’ or ‘Sale by Agreement to Sell’ or ‘Transfer by Will’ are incapable of conveying title and do not amount to transfer, nor can they be recognised as valid mode of transfer of immovable property. The Courts are not to treat such transactions as completed or concluded transfers or conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognised as deeds conferring title except to the limited extent of Section 53-A of the Transfer of Property Act, 1882. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records. c. This rule applies not only to the deeds of conveyance in regards to freehold property but also to transfer of leasehold property. A lease can be validly transferred only vide a registered “Assignment of Lease”. d. An ‘Agreement to Sell/General Power of Attorney/ Will’ transaction neither conveys any title nor creates any interest in an immovable property. e. Court Held: Observations made by the High Court of Delhi in the case of, Asha M. Jain v. Canara Bank, 94 (2001) DLT 841, that the concept of ‘Power of Attorney Sales’ has become, over a period of time, a recognised mode of transfer apropos transactions concluded by way of Agreement to Sell or General Power of Attorney or Will, are unwarranted, unjustified and misleading. 2. Hansia v. Bakhtawarmal, AIR 1958 Raj 102: The question of law that arose for adjudication in this case was this- how far a non-registered document, which is compulsorily required to be registered under Section 17 of the Registration Act, 1908, can be used in a proceeding. The document in question in the present case was a mortgage deed which was not registered, although registration of such documents is obligatory under Section 17(1) of the Registration Act, 1908. In this case, it was held that, a suit for redemption based on an un-registered mortgage deed is bound to fall,

much because the purpose of the mortgage deed is to prove the mortgage. The unregistered mortgage deed can be used only for collateral purposes as provided for in the proviso to Section 49 of the Registration Act, 1908. The necessary conclusion is this, that, the un-registered mortgage deed can be used by the plaintiff in a suit for possession (and not in a suit for redemption) to prove the “nature of possession”, if the defendant denies the claim of the plaintiff on the ground of adverse possession. Thus, proviso to Section 49 of the Registration Act, 1908 cannot be relied upon for availing any benefit in a suit for redemption. Collateral purpose connotes a purpose other than that for creating, assigning, declaring, extinguishing or limiting a right to an immovable property; documents requiring compulsory registration under the Registration Act, 1908, can be used for collateral purpose. Note: The property mortgaged is only a security for the payment of the money lent. The mortgagor is entitled to get back his property on payment of the principal and interest after the expiry of the due date for the repayment of the mortgagee's money. This right of the mortgagor is called the Right of Redemption. Note: The term “collateral transaction” is used not in the sense of an ancillary transaction to a principal transaction or a subsidiary transaction to a main transaction. The root meaning of the word “collateral” is running together or running on parallel lines. The transaction as recorded would be a particular or specific transaction. But it would be possible to read in that transaction what may be called the purpose of the transaction and what may be called a collateral purpose, the fulfilment of that collateral purpose would bring into existence a collateral transaction, a transaction which may be said to be a part and parcel of the transaction but none the less a transaction which runs together with or on parallel lines with the same. 3. Tek Bahadur Bhujil v. Debi Singh Bhujil , AIR 1966 SC 292: In this case, it was held that, where a family arrangement was brought about by a document in writing with the purpose of using that writing as a proof of what the family had arranged for, then such a document would require compulsory registration because it is then that such a document would amount to a document of title declaring for future, what rights/claims and what properties the parties i.e. each member of the family would possess or enjoy. 4. Ghulam Ahmad v. Ghulam Qadir, AIR 1968 J. & K. 35: In this case, it was held that, when the agreement is purely mutual and a family one for the enjoyment of property without limiting or extinguishing the right of anybody, then it may not be

registered. It was held that, after examining, whether or not, a document is compulsorily registrable under Section 17 of the Registration Act, 1908, comes the stage of examining the document and seeing whether it could be admitted to registration in view of Section 21 of the 1908 Act, once is it found that the document is to be compulsorily registered. Thus, the test is, if the document is hit by any of the provisions of Section 17 of the 1908 Act, the application or non-application of Section 21 of the 1908 Act does not at all arise for consideration, because it is the second-step in the chain of steps which completes the registration formality. A document which comes within the terms of Section 17(1) (b) of the 1908 Act is compulsorily registrable; whatever is saved from the operation of this clause (that is, clause (b) of sub-section (1) of Section 17 of the 1908 Act) of the Section is not compulsorily registrable. Document is any substance having any matter expressed or described upon it by marks capable of being read. As per the law for time being in force in India, it is the matter written and not the substance on which the matter is expressed or described which is said to be a document. Meaning of the words- creating, declaring, limiting and extinguishing: 

The word “create” in legal terminology means to bring into being, to invest with a new title, or to produce. Therefore, every non-testamentary instrument which means to, or has the effect of originating some right, title or interest in immovable property will be governed by the word “create”.



The word “declare” is equivalent to “define” or “authoritatively set forth”; a mere recital of fact does not tantamount to a declaration.



The word “limit” connotes restriction of some right or interest in immovable property.



The word “extinguish” is a counter-part of the word “create”, for it means “to bring to an end” or to “quench” some right, title or interest in immovable property.

A non-testamentary instrument which varies the right or interest made by an earlier instrument, has as much the effect of creating some new right or extinguishing an old one as an absolutely fresh document would do- such a document also requires registration.

A compromise is a settlement of disputed claim and applies to demands of all sorts. Where it merely contains a recital of a previous agreement, it does not require registration, but where the compromise itself declares a right to immovable property then it operates as a contract and requires registration. 5. Ram Sewak Jaiswal v. Abdul Majeed, AIR 1980 All. 262: In this case it was held as follows: i.

In case of an agricultural lease, a registered kabuliyat coupled with acceptance of the same by the landlord is sufficient to constitute a lease in the eyes of law.

ii.

A rent-note or kabuliyat is executed unilaterally by the lessee alone, by which, the lessee agrees to take some immovable property on lease from the lessor. A rent-note or kabuliyat comes within the definition of the term ‘lease’ for the purposes of Section 2(7) of the Registration Act, 1908, though it cannot be termed as ‘lease’ sensu stricto for the purposes of Section 107 of the Transfer of Property Act, 1882, however, it shall require compulsory registration if it is executed for a period stated in Section 17(1) (d) of the Registration Act, 1908.

iii.

A rent-note or kabuliyat is inadmissible in evidence if it is not registered, though it requires compulsory registration under Section 17(1) of the Registration Act, 1908.

iv.

Note: The period for which the house was taken according to the terms of the rent-note was for 11 months and the rent reserved was Rs. 5/- per month, it was held that, no compulsory registration was required as regards Section 17(1) (d) of the Registration Act, 1908, although the above arrangement shall constitute a lease within the mischief of Section 2(7) of the Registration Act, 1908. Thus, no registration was required, neither within the mandate of Section 17 of the Registration Act, 1908, nor within the mandate of any of the provisions of the Transfer of Property Act, 1882, as the lease was for a period which was less than one-year. (Note: Section 2(7) of the Registration Act, 1908: “lease” includes a counterpart, Kabuliyat, as undertaking to cultivate or occupy, and an agreement to lease)

6. Naran Das Karsan Das v. S.A. Kamtam, AIR 1977 SC 774: a. Section 59 of the Transfer of Property Act, 1882 provides that where the principal money secured is Rs. 100/- or upwards, a mortgage other than a mortgage by

deposit of title-deeds can be effected only by a registered instrument signed by the mortgagor (that is, the person who mortgages the property) and attested by at least two witnesses. (Note: Section 59 of the Transfer of Property Act, 1882: Mortgage when to be by assurance) b. A mortgage by deposit of title-deeds may be created without any writing and merely by delivery of title-deeds with the intention of creating a security for a debt; no question of registration arises in such a transaction. c. In case of a simple mortgage there must be a registered document. A document would require registration if independently of the provisions of Section 58(f) of the Transfer of Property Act, 1882, it creates a mortgage. (Note: Section 58(f) of the Transfer of Property Act, 1882: Mortgage by deposit of title-deeds) d. A document specifying that in case the mortgagor fails to repay the loan amount within the stipulated period, then the mortgagor would be entitled to sell the mortgaged property for recovering the loan amount, would be compulsorily registrable, as the title in the property was created in favour of the mortgagee by virtue of the said document. Mortgagor has a right to redeem until the sale of the mortgaged property is complete. By registration the mortgagor does not lose right of redemption. e. Conferment of power to sell the mortgaged property by the mortgagee without intervention of the court in a mortgage-deed by itself will not deprive the mortgagor of his right to redemption. The equity of redemption is not extinguished by mere contract for sale by the mortgagee of the mortgaged property; the mortgagor’s right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed. 7. Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra, AIR 2004 SC 4342: It was held that the essential conditions which are required to be fulfilled if a transferee (the one to whom the property has been transferred by the transferor) wants to defend or protect his possession under Section 53-A of the Transfer of Property Act, 1882, are as follows: I.

There must be a contract for transfer of any immovable property for consideration;

II.

The contract must be writing, signed by the transferor, or by someone on his behalf;

III.

The writing must be in such words from which the terms necessary to construe the transfer can be ascertained;

IV.

The transferee must in part-performance of the contract take possession of the property, or any part thereof;

V.

The transferee must have done some act in furtherance of the contract; and,

VI.

The transferee must have performed or be willing to perform his part of the contract.

If these conditions are fulfilled then in a given case there is equity in favour of the proposed transferee who can protect his possession against the propos...