In Kanwar Raj Singh v. Gejo1, a two-Judge Bench of the Supreme Court of India recently examined the interplay between Section 47 of the Registration Act, 1908 (the Registration Act) and Section 54 of the Transfer of Property Act, 1882 (the Transfer of Property Act).
Section 47 of the Registration Act, titled “time from which registered document operates”, states that a registered document shall operate from the time from which it would have commenced to operate if no registration has been required or made, and not from the time of its registration.
On the other hand, Section 54 of the Transfer of Property Act, 1882 provides that transfer of immovable property of the value of Rs 100 or above can only be made by a registered instrument. Further, in Suraj Lamp and Industries (P) Ltd. (2) v. State of Haryana2, the Supreme Court held that a transfer of immovable property by way of sale can only be by a deed of conveyance (sale deed) and in the absence of a deed of conveyance that is duly stamped and registered as required by law, no right, title or interest in an immovable property can be transferred.
In Kanwar Raj Singh3, the original plaintiff (represented through her legal representatives, the respondents in the Supreme Court) sought a declaration of ownership over certain land based on a sale deed executed in her favour by the first defendant (predecessor of the appellants) on 6-6-1975 and registered on 23-7-1975. After execution of the sale deed, the first defendant executed a gift deed regarding â…”rd share in the same property in favour of the eighth defendant who was his wife. The original plaintiff’s grievance was that after the execution of the sale deed, an interpolation was made by the first defendant in the sale deed by adding that only â…“rd of the land was being sold. In opposition, the stand of the first defendant was that the correction was made by him in the sale deed prior to its registration (with such interpolation) and was, therefore, binding on the original plaintiff.
The High Court judgment affirmed the decree passed by the trial court in favour of the original plaintiff which held that what was sold to the original plaintiff was the entire land. The Supreme Court refused to interfere with the High Court’s judgment and by reference to Section 47 of the Registration Act, held that once the sale deed was registered on 23-7-1975 the sale deed as originally executed on 6-6-1975 will operate and the corrections unilaterally made by the first defendant after its execution, which were without the knowledge and consent of the original plaintiff purchaser, will have to be ignored.
This position was not always so. Prior to the year 1864, the order of registration was determinative of priority of rank. However, the Registration Acts of 1864, 1866, 1871 and 1908 introduced the present principle of relation of a registered document to the date of its execution. The only recognised exceptions are where a deed itself indicates that it has come into operation from a date prior to the date of execution or that it will come into operation on some future date.
In Gurbax Singh v. Kartar Singh4, an interesting question arose as to priority when two documents were executed on the same day. The Supreme Court held that in such a situation, the time of execution of the two documents would determine their priority, irrespective of the time of their registration, and hence, the document executed earlier in time will prevail over the document executed subsequently even though the former was registered subsequently.
In Kanwar Raj Singh5, the Supreme Court referred to an earlier decision of a Constitution Bench in Ram Saran Lall v. Domini Kuer6, where the question was whether a demand for pre-emption under Mohammedan Law, which was applicable to the parties, was made by the appellants (original plaintiffs) before or after the completion of the sale. In Ram Saran Lall7, the facts were that a deed of sale was executed in favour of the respondent purchaser on 31-1-1946, which was presented for registration on the same day. On 2-2-1946 the appellants, on coming to know about the execution of the deed of sale, made the talab-i-mowasibat (the first demand). On 7-2-1946 the receipt given by the registration office was handed over by the sellers to the respondent purchaser who paid the balance consideration. On 9-2-1946 the documents were copied in the Registrar’s books and the registration became complete as per Section 61 of the Registration Act. The respondent purchaser thereafter received the deed of sale from the registrar’s office on 13-2-1946.
The suit for pre-emption filed on 9-9-1946 was decreed by the trial court and was maintained by the first appellate court. The High Court set aside the decree in second appeal with the result that the suit stood dismissed. The High Court held that when a sale had to be made by a registered instrument, it becomes complete only on the instrument of sale being copied in the books of the registration office. Therefore, the sale only became complete on 9-2-1946, when the instrument was copied in the books of the registration office. Hence, the High Court concluded that the appellants were not entitled to enforce their right of pre-emption because they had not made the preliminary demand after the completion of the sale, but before that on 2-2-1946.
The appellants relied on Section 47 of the Registration Act and contended that the High Court was in error in not considering that once the deed of sale was registered, it became operative on the date of its execution and that although the present suit may fail, the appellants would be entitled to enforce their right of pre-emption when the sale was completed on 31-1-1946.
The Supreme Court, by majority, negatived the submissions of the learned Attorney General who appeared for the appellants and dismissed the appeal. The Court held that Section 47 does not state when a sale would be deemed to be complete and only applies to a document after it has been registered. The Court further held that a sale is not complete till the registration of the instrument of sale is completed and hence, cannot be deemed to be completed at any time prior to its registration because of the operation of Section 47. Therefore, the Court negatived the submission of the appellants that the sale was completed on 31-1-1946.
The Supreme Court further observed that having regard to the said view, it was not necessary to discuss the question of construction of the instrument of sale in that case and to decide whether on its proper reading, the transfer was intended to take immediate effect on its execution or later after the balance of the purchase money had been paid.
The minority view expressed by the Supreme Court was that the time of completion of the sale was to be determined by application of the principle of intention laid down under Section 47 of the Registration Act and the time when the sale should be deemed to be complete should be gathered by reference to the instrument itself. The intention of the parties therein would be the crucial and only test. On facts, the minority view found that the terms of the instrument of sale clearly expressed the intention of the parties to give effect to the deed from the date of its execution and therefore, the title of the property was transferred to the vendee on the execution thereof on 31-1-1946.
In the author’s view, the majority judgment in Ram Saran Lall8 evolved a harmonious balance between the peremptory language of Section 54 of the Transfer of Property Act and the deeming fiction under Section 47 of the Registration Act. It also implicitly recognised that Section 54 draws a clear distinction between transfer of tangible immovable property of a value more than Rs 100 and less than Rs 100. In the former case, such transfer can only be made through a registered instrument, whereas in the latter case the transfer may be either by a registered instrument or by delivery of the property. Further, Section 49 of the Registration Act provides the effect of non-registration of a compulsorily registrable document and makes it clear that such an unregistered document shall not affect any immovable property comprised therein or be adduced in evidence of any transaction affecting such property.
Interestingly, in Kanwar Raj Singh9, the Supreme Court observed that since a compulsorily registrable document can, after its registration, operate from the date when it would have commenced to operate if no registration had been required or made, the date of the operation would depend on the nature of the transaction. However, the said observation appears to have been superfluous, since this case also related to an instrument of sale which was subsequently registered and to that extent, the underlying facts were similar to Ram Saran Lall10.
In conclusion, it is evident that by virtue of Section 54 of the Transfer of Property Act, there will be no transfer of right, title or interest in an immovable property of a value over Rs 100 unless the instrument of transfer is registered. Additionally, Section 47 of the Registration Act is not determinative of completion of a sale and will only apply when a compulsorily registrable instrument is registered subsequent to its execution and not prior to such registration.
Disclaimer: The contents of this article are intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Further, the views in this article are the personal views of the author.
*Partner, Shardul Amarchand Mangaldas & Co. specialising in the Dispute Resolution and Litigation Practice.
