Madras High Court: In an appeal concerning a property dispute, the division bench of S.M. Subramaniam* and K. Rajasekar, JJ. has held that the District Registrars are quasi-judicial authorities and cannot conduct a trial nature proceeding by adjudicating the title deeds or other documents produced by the parties. Only if, prima facie case has been established for cancellation due to fraud or impersonation, the District Registrar must pass orders for document cancellation.
Background:
The vendor purchased the subject property in 2004, and the said property was purchased from the vendor by the appellant in 2007. The respondents 4 to 7 claiming title over the subject property submitted an application before the District Registrar, seeking cancellation of the documents registered in favour of the vendor to the appellant in the year 2004 and the appellant in the year 2007. The District Registrar conducted summary proceedings and cancelled the said two Sale Deeds as fraudulent. An appeal under Section 77-B of the Registration Act (‘Act’), was filed before the Inspector General of Registration, who confirmed the order passed by the District Registrar. Thus, the appellant instituted writ proceedings, challenging the order passed by the District Registrar under Section 77-A and the appellate order passed under Section 77-B of the Act.
The Writ Court opined that the title dispute exist between the appellant and the respondents 4 to 7 and therefore, the parties have to approach the Competent Civil Court of Law for the purpose of resolving the issues. Thus, the appellant filed the present appeal.
Analysis:
After perusing Section 68 of the Act, the Court said the scope of Section 68(2) of the Act cannot be expanded for cancellation of sale deed by conducting summary enquiry. If such powers are exercised, then the District Registrars are usurping the powers of the Civil Court of Law, which is impermissible. To cancel the Sale Deed, the trial nature proceedings are warranted. Such an exercise cannot be made by the Registering Authority or the District Registrar under the Registration Act. Therefore, Section 68(2) of the Act, must be purposively interpreted, to form an opinion that the errors, omissions or violations during registration or violations of procedures under the Act, alone can be rectified. Section 68 of the Act is not intended to cancel the Sale Deed otherwise registered in accordance with the procedures as contemplated under the Act.
The Court said that fraud or impersonation cannot be interpreted in common parlance. Fraud or impersonation in the context of Sections 32 to 35 of the Act, alone provides power to the Registering Authority to conduct an enquiry and carry out necessary corrections or otherwise. Power to initiate prosecution is conferred under Section 83 of the Act. However, such powers conferred under the Act, would not provide jurisdiction to cancel the Sale Deed registered otherwise made by following the procedures as contemplated under the Act and the Rules framed thereunder. Therefore, the Competent Authorities dealing with registrations and conducting enquiry, are to be sensitised with reference to the Circular and the scope of interference under Section 68 of the Act.
While considering the scope of Section 22-A, Section 22 B and Section 77-A of the Act, together for the purpose of better understanding of the scope of Section 77-A of the Act, the Court said that the legislative intention is to be carved out through harmonious understanding of Section 22-B and Section 77-A of the Act.
The Court said that Section 77-A cannot have retrospective effect, and it must be read in conjunction with Section 22-A and Section 22-B of the Act, as insertion of all these three Sections are to be understood holistically to avoid any inorderliness.
After taking note of Article 59 of the Limitation Act, 1963, the Court said that even for setting aside an instrument or a decree or for rescission of a contract the period of three years has been contemplated under the Limitation Act, the documents registered several years back or decades back cannot be the subject matter for cancellation of those documents under Section 77-A of the Act.
After taking note of Section 53 of the Transfer of Property Act, 1882 which deals with fraudulent transfer, the Court said that the documents registered prior to the insertion of Sections 22-A, 22-B and 77-A of the Act, cannot be subjected to cancellation under Section 77-A of the Act. Therefore, there are certain circumstances where a voidable document under Section 53 of the Transfer of Property Act, may be validated with the consent of the parties. That being the legal position in respect of such fraudulent documents, which are registered, the power to cancel conferred on the District Registrar cannot be given retrospective effect, so as to cancel the documents, which were registered several years or decades back.
The Court said 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 are empowered to conduct summary proceedings and if the allegations i.e. fraud or impersonation are apparent on the face of the record, then alone the documents registered are to be cancelled but not otherwise.
Therefore, the Court held that the District Registrars cannot conduct a trial proceeding by adjudicating the title deeds or other documents produced by the parties. Only if prima facie case has been established for cancellation due to fraud or impersonation, the District Registrar must pass orders for document cancellation.
After examining Order VI Rule 4 of the Code of Civil Procedure, 1908, (‘CPC’), the Court said when CPC contemplates that the persons pleading fraud should establish through pleading and documents, such a procedure cannot be adopted by the District Registrar under the Registration Act. Since summary proceedings are contemplated. Thus, the District Registrar is duty bound to draw a distinction between the summary proceeding and the trial nature proceedings with reference to the Registration Act and CPC.
The Court remarked that cancellation of document has got larger repercussion on the civil rights of the persons. Property right is a constitutional right conferred under Article 300-A of the Constitution of India. Such a constitutional right can be interfered with only by the authority of law and certainly not through summary proceedings. Therefore, the Court held that the scope of the powers under the Registration Act to the District Registrars cannot be expanded for adjudication of civil disputes or the civil rights, which is conferred through the conveyances, documents etc.
The Court further said that the scope under the Registration Act to cancel the documents on the ground of fraud or impersonation is undoubtedly limited. Thus, while conducting a summary enquiry, if the District Registrar finds that there is prima facie proof to establish fraud or impersonation, then alone the document is to be cancelled. Therefore, in respect of any iota of doubt on the prima facie case, the District Registrar is not empowered to adjudicate the issues on merits and is bound to relegate the parties to the Civil Court of law for adjudication.
The Bench further clarified that 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 must be relegated to the Competent Civil Court of Law for adjudication.
By a Holistic reading of Section 22-B of the Registration Act goes along with Rule 55 of the Registration Rules, the Court concluded that the Registering Authority is empowered to refuse registration if the document presented are found to be forged or impersonated.
Thus, the Court said that in the present case, 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.
The Court concluded that 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 within the writ proceedings, which has not been undertaken by the Writ Court.
[Netvantage Technologies Pvt Ltd v. Inspector General of Registration and Stamps, 2024 SCC OnLine Mad 567, decided on 20-03-2024]
*Judgment Authored by: Justice S.M. Subramaniam
Advocates who appeared in this case :
For Appellant: Senior Counsel V.Raghavachari
For Respondents: Additional Government Pleader B.Vijay, Advocate M.V.Seshachari
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