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registration of a deed of cancellation, unilateral

Posted on 04 May 2009 by ravidevaraj

Court

Chennai High Court



Brief

(i) Challenging registration of a unilaterally executed deed of cancellation of a sale, a writ petition is maintainable under Article 226 of the Constitution of India; (ii) A deed of cancellation of a sale executed by mutual consent by all parties to the sale deed, if presented for registration, the registering Officer is bound to register the same provided the other requirements like Section 32-A of the Registration Act have been complied with. (iii) The Registering Officer is obliged legally to reject and to refuse to register a deed of cancellation of a sale unilaterally executed without the knowledge and consent of other parties to the sale deed and without complying with sec.32A of the Registration Act.



Citation

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 10 .02.2009 CORAM THE HONOURABLE MR. JUSTICE S.NAGAMUTHU Writ Petition No.8567 of 2008 and M.P.Nos. 1 and 2 of 2008 G.D.Subramaniam ... Petitioner vs. 1.The Sub Registrar, Office of Konur Sub Registrar, Sidco Nagar, Chennai-49. 2.P.Shanmugam 3.Mr.B.Dillibabu 4.Mr.B.Vasu ... Respondents Writ petition has filed filed under Article 226 of the Constitution of India to issue a writ of certiorari to call for the records of the impugned deed of cancellation of sale dated 10.09.2007 executed by the second respondent's power agent third respondent and presented to and registered by first respondent as document No.4433 of 2007 on the file of the first respondent and quash the same. For petitioner : Mr.N.Sreenivasalu For respondents : Mrs.Malarvizhi Udayakumar, Special Govt.Pleader (R1) Mr.Murugan (R2 to R4)



Judgement


O R D E R

Whether, registration of a deed of cancellation, unilaterally executed by the vendor to nullify the earlier sale validly made, is sustainable in law ? This Court, in this writ petition, is called upon to find a solution to the said interesting question of law.

The Facts:-

The second respondent was, originally the owner of a valuable immovable property in Chennai. The third respondent is his Agent, appointed by means of a registered deed of power of attorney dated 07.07.2006. The petitioner purchased the said property by means of a registered sale deed dated 14.07.2006 for a consideration of Rs.14,00,000/- from the second respondent through the third respondent. On behalf of the second respondent, the third respondent executed the sale deed and the same was registered at the office of the first respondent as document No.3503 of 2006. According to the petitioner, he was put in possession of the said property on the same day and from then onwards, he has been in continuous possession and enjoyment of the same.

2. Subsequently, the third respondent has entered into a sale agreement with the fourth respondent, who is the brother of the third respondent, on 03.08.2007 thereby agreeing to sell the very same property to the fourth respondent and got the document registered at the office of the first respondent as document No.3917 of 2007. Not stopping with that, on 10.09.2007, the third respondent, without the knowledge and consent of the petitioner, executed a deed styling the same as a "Cancellation Deed" thereby nullifying the sale dated 14.07.2006 and got the same registered at the Office of the first respondent as document No.4433 of 2007. Seeking to quash the said document and for further orders, the petitioner has come forward with this writ petition.

The Issues:-

3. It is the contention of the petitioner that the sale made in his favour is perfectly valid in law; when that be so, the unilateral cancellation of the same by the third respondent by means of the Deed of Cancellation is void under law; that the first respondent ought not to have registered the said document as the same is opposed to public policy and also contrary to the Indian Contract Act, the Transfer of Property Act and the Indian Registration Act; more particularly, Section 32-A of the Indian Registration Act and so, the registration of the Cancellation Deed to which the petitioner was not a party, is illegal. On these grounds, the petitioner has come forward with this writ petition.

4. The first respondent has not filed any counter. The respondents 2 to 4 have filed a common counter, wherein it is contended that due to long association between the petitioner and the fourth respondent, at the instance of the fourth respondent who happens to be the brother of the third respondent, he executed the sale deed dated 14.07.2006 in favour of the petitioner on the promise of the petitioner that he would pay the sale consideration in due course. It is further contended that though the sale deed was registered, possession was never handed over to the petitioner. And, since the petitioner did not keep up his promise to pay the sale consideration, the respondents 3 and 4 reasonably believed that the petitioner had cheated them and so, in order to avoid any further transaction by the petitioner in respect of the property, the Cancellation Deed was executed. In the counter, in respect of the other grounds raised in the affidavit of the petitioner, there is no response.

5. With regard to the maintainability of the writ petition, though no ground has been raised in the counter, the learned counsel for the respondents 2 to 4 raised a preliminary objection during his arguments regarding the maintainability of the writ petition on the ground that this writ petition is not maintainable in view of the fact that the petitioner has got alternative remedy of getting his title declared or getting the cancellation deed cancelled by a Civil Court. The learned counsel relies on a Full Bench judgment of the Andhra Pradesh High Court in Yanala Malleshwari and others v. Ananthula Sayamma and others reported in 2007 (1) CTC 97, wherein, by majority, it has been held that a writ Court under Article 226 of The Constitution of India has got no power to entertain a writ petition to invalidate a cancellation deed or cancellation of an instrument which purports to nullify a sale deed.

6. Per contra, the learned counsel for the petitioner would submit that mere availability of alternative remedy is not a bar for this Court to entertain the writ petition if such alternative remedy is not efficacious and effective and thus, the writ petition is very much maintainable. In support of his contention, the learned counsel relies on a judgment of this Court in P.Rajagurusamy v. The Sub Registrar, Sub Registrar Office, Alandur at Nanganallur, Chennai, reported in 2008 (1) CTC 284, wherein a learned Single Judge of this Court, having analysed the scope of Section 32-A of the Registration Act, has held that registration of a deed of cancellation of a sale agreement unilaterally executed by one party to the agreement is not legal and therefore, the same is liable to be quashed.

The Analysis:-i)Maintainability:

7. Though 59 years have passed off, since we, the people, have given to ourselves the Constitution of India, and the Hon'ble Supreme Court has on several occasions well pronounced the law relating to the scope of the power of judicial review of the High Courts under Article 226 of The Constitution of India, more often than not, the High Courts are again and again confronted with such questions. In view of the well settled position of law on this subject, it may not be necessary for this Court to make a copious reference to too many judgments on this aspect except referring to the following to reproduce the law laid down:-
(i) In Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and others, reported in (1998) 8 SCC 1, the Hon'ble Supreme Court has vividly stated the law on the subject as follows:-
" The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. The High Court, having regard to the facts and circumstances of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions, one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by the Hon'ble Supreme Court not to operate as a bar in atleast three contingencies viz., where the writ petition has been filed for the enforcement of the any of the fundamental rights or where there has been a violation of the principles of natural justice or where the order or proceedings are wholly without jurisdiction or the virus of an Act is challenged."
"Therefore, the jurisdiction of the High Court in entertaining a writ petition under Article 226 of the Constitution, in spite of the alternative statutory remedies, is not affected, specially in a case where the authority against whom a writ is filed is shown to have had no jurisdiction or had purported to usurp jurisdiction without any legal foundation."

(ii) In ABL International Ltd. And another vs. Export Credit Guarantee Corporation of India Ltd., and others reported in (2004) 3 SCC 553, in para 28 of the judgment, the Hon'ble Supreme Court has held that " while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and others ) And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction".

8. Keeping in view the above principles laid down by the Hon'ble Supreme Court, if the issues involved in the instant case are viewed, I am sure, for the forthcoming discussions and conclusions, the power of judicial review under Article 226 would engulf into its ambit the said issues and thus, this writ petition is maintainable.

9. Complaints, in plenty, flood the police stations in the State of Tamil Nadu very often, in recent times, alleging that, unscrupulous sellers and landgrabbers, indulge in nullifying the valid sale made by means of registered sale deeds, by executing cancellation deeds unilaterally and getting the same registered in an ingenious way. The modus operandi is, this court is informed, that unscrupulous elements like landgrabbers approach the former owners of properties, practice a kind of deception by paying paltry amounts, induce them to execute cancellation deeds without the knowledge and consent of the purchasers and then to execute fresh sale deeds in their favour. It is, indeed, a fraud. Based on such sale deeds, these mighty people squat upon the properties thereby depriving the real owners, who are generally meek, from enjoying the properties thereby leaving them in the lurch. It is also common knowledge that the doors of subordinate Courts are knocked at with number of Civil Suits where the real owners have to fight for justice to get their title declared as against these unscrupulous elements. Going by the past experience, the Civil Suits, in normal course, take years to conclude. In the meanwhile, it also happens that some more encumbrance is made thereby creating further cloud in the title so as to make the issues more complex and complicated.

10. "Fraud avoids all judicial acts, ecclesiatical or temporal" observed Chief Justice Edward Coke of England about three centuries ago. Therefore, neither the Government nor the Courts of law can turn a deaf ear to the distress cries of the aggrieved and be blind to the alarming situation. The jurisdiction of this Court under Article 226 of the Constitution is undoubtedly wide. But, while exercising the same, as a matter of caution, the Courts have formulated self imposed restrictions on their powers so as to leave the parties to avail the alternative remedies. But when such alternative remedy, as in the instant case, is neither efficacious nor easy to secure without undue hardship and delay, the said self imposed restrictions cannot be an impediment for the Writ Court to exercise its jurisdiction in order to render substantial justice. The issues involved in the instant case need to have a deep approach of a socio-legal scientist to invent a solution acceptable to the society, particularly, the parties to this lis. (vide Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and others). So, I hold that availability of alternative remedy,in the facts and circumstances enumerated above, is not a bar to entertain the instant writ petition.
ii)Powers of Registering Officer:
11. A sale is essentially an executed contract, whereby the seller has transferred his title and declared that by means of the execution of the sale deed for lawful consideration, the purchaser has become the owner of the property. Thus it is bi-lateral. No such contract can be cancelled unilaterally by one party, unless such a right has been reserved in the contract itself. There is no specific provision for cancellation of a sale in the Transfer Of Property Act. Section 4 of the said act states that the chapters and sections of the said Act which relate to contracts shall be taken as part of the Indian Contract Act. Since, a sale is an executed contract, Sec. 62 of the Indian Contract Act is applicable which speaks of conditions under which novation, recession and alteration of a contract can take place. In City Bank, N.A. v. Standard Chartered Bank and others reported in (2004) 1 SCC 12, the Hon'ble Supreme Court holds "novation, recession or alteration of a contract under Section 62 of the Indian Contract Act can only be done with the agreement of both the parties to the contract. Both the parties have to agree to set aside the original contract with the new contract or for recession or for alteration". Thus, it is now too well settled that a cancellation deed, which is executed unilaterally by one party to the contract is illegal.

12. When such a cancellation deed, executed unilaterally by one party is presented before a statutory authority viz., the Registering officer, the question is, whether he is bound to register the same despite the fact that obviously the said document is void or illegal and that the document has not been duly executed as per law.

13. It is the contention of the respondents 2 to 4 that as per the Indian Registration Act, when a document is presented for registration, the Registering officer has got only limited powers to make an enquiry as provided under Section 34 of the Act, wherein he is required to ascertain the following viz.,

"Section 34 (3)(a):- enquire whether or not such document was executed by the persons by whom it purports to have been executed;

(b) satisfy himself as to the identity of the persons appearing before him and alleging that they have executed the document (or they are claiming under the document); and

(c) in the case of any person appearing as a representative, assign or agent, satisfy himself of the right of such person so to appear.

If he is satisfied on the above aspects, according to the learned counsel, the Registering officer has no other option except to register the document. In the case on hand, it is contended, since these conditions were satisfied, the Sub Registrar was right and very much within his jurisdiction to register the said cancellation deed.

14. In my considered opinion, it is too hard to accept the said contention. Of course, Section 34 of the Act does not expressly provide that the Registering officer should hold an enquiry in respect of the validity of the document presented for registration. But, Rule 55 of the Registration Rules states thus:-

" 55. It forms no part of a registering officer's duty to enquire into the validity of a document brought to him for registration or to attend to any written or verbal protest against the registration of a document based on the ground that the executing party had no right to execute the document; but he is bound to consider objections raised on any of the grounds stated below:-

(a) that the parties appearing or about to appear before him are not the persons they profess to be;

(b) that the document is forged;

(c) that the person appearing as a representative, assign or agent, has no right to appear in that capacity;

(d) that the executing party is not really dead, as alleged by the party applying for registration; or

(e) that the executing party is a minor or an idiot or a lunatic.

At the first blush, on going through Sections 34 and Rule 55, one can have an impression that it is none of the duty of the Registering Officer to find out the validity of the document before proceeding to register the same. But, indeed, it is not so. Section 34 and Rule 55 speak of the limitations on the powers of the Registering Officer to hold enquiry, which would only mean that the Registering Officer is not required to hold a roving enquiry to decide the validity of a document presented for registration. On the other hand, if, by simply glancing through the document, without there being any necessity to hold any enquiry, the Registering Officer is satisfied that the document is either void ab initio or illegal, in such a situation, it cannot be said at any stretch of imagination, that the Registering Officer has to blindly register the said document. Such kind of construction of Section 34 and Rule 55 would only defeat the very object of the Act and the public interest. For example, if two persons enter into an agreement thereby one party agrees to kill one "X" for the consideration to be paid by the other and present the deed for registration, can it be said that the Registering Officer is bound to register the said document?" If such documents, which are patently void ab initio or illegal, are allowed to be registered, then,such kind of interpretation of the Registration Act would not serve the cause of justice. The Hon'ble Supreme Court in Kishan Chandar v. Ganesh Prasad reported in A.I.R. 1954 SC 316, has held "the registration Act lays down the formalities and rules of procedure which must be complied with before the document is presented for registration. It is the duty of the Registrar to see proper compliance with the provisions of the Act before the document is registered".

15. In the said backdrop, if the entire scheme of the Act and the rules are analysed, then it would make one to understand without any doubt, that the Registering Officer either on enquiry or without an enquiry, should, besides other things, prima facie be satisfied that the document is neither illegal nor void and then to register the same provided the other requirements are satisfied. If the document is ipso facto illegal or void, then, he is not obliged to register the same and instead he should refuse to register the said document.

16. Section 17 of the Act deals with documents of which registration is compulsory and Section 18 of the Act deals with the documents of which registration is optional. Section 17(b) is relevant for our case, which reads as follows:-

"Section 17(b): other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property."

17. A plain reading of the above provision would disclose that all non testamentary instruments declaring a right or title over immovable properties worth Rs.100/-and upwards shall be registered. A deed of cancellation of a sale falls within the purview of such an instrument declaring right and title for an immovable property. If any such document cancelling the sale is presented for registration, since the same is compulsorily registrable under Section 17, the Registering officer is obliged to register the same, provided the execution of the said document is validly made by mutual consent of the parties and the same is not illegal or void. To constitute a valid execution, it should be executed by all parties to the earlier sale. Needless to say that unless there is valid execution by competent persons, the Registering Officer has to necessarily refuse to register the document. Thus, in a situation where the document is either void or illegal or there is no valid execution, the registering Officer is bound to refuse to register the same. De hors such a position, if the Registering officer proceeds to register the said document, then the said registration would be without jurisdiction and not valid.

18. Now, let me consider the scope of Section 32-A of the Act. Before the introduction of Section 32-A of the Indian Registration Act, there were complaints of impersonations. That would have been one of the reasons why the parliament,in fitness of things, thought it fit to amend the Indian Registration Act so as to introduce Section 32-A which provides that all such deeds shall be signed by the seller as well as the purchaser and the same shall also bear their finger prints and photographs.

19. This is undoubtedly a mandatory provision. Unless the requirements of Section 32-A are complied with, the registering officer shall refuse to register the document. The proviso added to Section 32-A of the act does not specifically speak of a sale and instead, it speaks of any document relating to transfer of ownership of immovable property. Thus, a document nullifying an earlier sale of an immovable property would also fall within the scope of proviso to Section 32-A of the Act. In P.Rajagurusamy vs. The Sub Registrar, Sub Registrar Office, Alandu at Nanganallur Chennai reported in 2008 (1) CTC 284, while dealing with cancellation of an agreement for sale unilaterally by one party to the agreement, a learned Judge of this Court has taken the view that even in respect of cancellation of a mere agreement for sale, while the same is presented for registration, Section 32-A of the Act requires to be complied with. The finding of the learned Judge in para 8 is as follows:-
" A reading of the above provision would clearly indicate that when the document relates to the transfer of ownership of immovable property, the passport size photograph and finger prints of each buyer and seller of such property mentioned in the document, should be affixed to the document. In the instant case, though the document in question is not one transferring the ownership of immovable property, but only an agreement for sale entered into between the buyer and the seller, this provision making the affixure of the photographs and finger prints of both the buyer and the seller of the property in the document, can also be extended to the same. This would equally apply to a document for cancellation of an agreement for sale which is placed for registration before the Sub Registry."
I am in respectful agreement with the said view. Therefore, if a deed of cancellation, unilaterally executed by one party without the signature of the other party and without his photograph and finger prints, is presented for registration, for non-compliance of Section 32-A of the Act, the Registering officer should refuse to register the document.

20. Now, turning to the judgment of the Full Bench of the Andhra Pradesh High Court in Yanala Malleshwari and others, speaking for majority, His Lordship Justice V.V.S.Rao, after having elaborately dealt with the identical questions, has ultimately held in para 66 as follows:-

"Therefore, when the provisions of the Registration Act and Registration Rules elaborately deal with the circumstances and situations when the registering officer has to accept and register the documents and / or as to when registering officer has to reject the documents for registration, it is not possible to hold as a general rule that whenever a cancellation deed is submitted, the registering officer is bound to reject the acceptance and registration of the same. Such interpretation would render Section 126 of TP Act (which enables the donor of a gift to cancel / revoke the same) ineffective. Second, there could be unimaginable number of circumstances when the executant himself on his own volition comes before the registering officer and desires to cancel the earlier document. As already pointed out supra, under Section 23-A of the Registration Act, the registering officer can re-register a document totally ignoring the earlier registration. Further more, under schedule 1-A to the Indian Stamp Act as amended by the Stamp (A.P.Amendment) Act, 1922, cancellation deed is one of the legal document recognized in law and a transaction for transfer of immovable property is no exception."

21.With respect, I am unable to subscribe myself to the said view taken by the majority for the reasons which follow. Though in para 54 of the judgment, a reference has been made to Section 32-A of the Indian Registration Act, which was recently introduced, the learned Judge has not dealt with the same elaborately. Nobody can have any quarrel over the legal position that a deed of cancellation of a sale of immovable property of value Rs.100/-and upwards, is a document which needs compulsory registration. But the learned Judge has taken the view that to revoke a sale or to cancel the same, the consent or knowledge of the purchaser is not at all required. In my considered opinion, as I have already stated, a sale being a bilateral contract, more particularly in view of Section 32-A of the Indian Registration Act, if to be cancelled, it should be done bilaterally by both the parties to the sale. The learned Judge has expressed the apprehension that if the law is so interpreted so as to hold that the Registering Officer has power to refuse to register a cancellation deed, then, it would render Section 126 of the Transfer of Property Act, which enables the donor of a gift to cancel it or revoke the same, ineffective. With respect, I am of the view, that such apprehension has no basis. Section 126 of the Transfer of Property Act is a special provision dealing with the power of the donor to revoke a gift deed in certain circumstances. Such kind of revocation does not require the consent of the beneficiary of the gift. Basically, such a gift is not a contract in terms of the definition of contract as found in the Indian Contract Act, since gift is a transfer made voluntarily without consideration, whereas, a sale of an immovable property is a contract entered into between two parties where consideration is a sine-qua -non. Therefore, revocation of a gift deed cannot be equated to cancellation of a sale deed. Both operate on different spheres. A reference has also been made in the judgment to Section 23-A of the Registration Act. In my considered opinion, Section 23-A which speaks of re-registration of certain documents has nothing to do with cancellation of a validly executed document. It is not to say that invariably in all cases, the registering officer should refuse to register a cancellation deed. We cannot generalise all deeds of cancellation as illegal or void so as to say that such documents cannot be registered at all. All I would say is that such cancellation deeds which are executed bilaterally by both the parties to the earlier document can be registered by the registering officer, provided, the other requirements of the Indian Registration Act are satisfied. But those cancellation deeds executed unilaterally by one party to the earlier transaction, without the consent of the other party and without complying with the requirements of Section 32-A of the Indian Registration Act, alone are to be rejected by the Registering Officer.

22. In the minority judgment of His Lordship Justice Bilal Nazki in para 120, the learned Judge has held as follows:-

" Lastly, it was contended by the respondents that under no provision of law the Sub-Registrar is required to register a document after an enquiry as to the ownership of the property with respect to which a document is sought to be registered. It may be true that there is no such provision in the Registration Act, but if strictly interpreted, then the Registration Act would not empower the registering authority to register any document unless it falls within Section 17 or 18 of the Registration Act. Section 17 mentions those documents which are compulsorily registrable and Section 18 mentions those documents, of which, the registration is optional, but, the whole scheme of the Registration Act shows that it is incumbent upon the Registrar not to register documents that are unlawful. Obviously if a person has no right in the property and his interests in the property had extinguished, if he tries to execute any document for the same property, the document would be illegal......................."
".........It is only on mere reading of the document that Sub-Registrar would come to a conclusion that the document, which was sought to be registered, was an illegal document and as such could not be registered. Therefore, the argument of the learned counsel for respondents that the Sub-Registrar has no authority to make enquiries with regard to the title of the parties who executes the documents, would have to be accepted with exceptions. That document has no title over the property, the Sub-Registrar is not bound to register such a document. The Scheme of the Registration Act shows that documents which create interest or extinguish interest are either compulsorily registerable or are to be registered at the option of the executor. Besides this, what is sought to be revoked by this cancellation deed, is the earlier registered sale deed." (Emphasis supplied)

23. In Badugu Venkata Durga Rao v. Surneni Lakshmi reported in 2001 (1) ALD 86, a learned Single Judge of the Andhra Pradesh High Court has also taken the view that a person who has executed a sale deed and got it registered cannot subsequently execute a document unilaterally cancelling the earlier sale deed. This view has been accepted by His Lordship Bilal Nazki in the minority judgment.

24. In the case on hand, the cancellation deed was executed unilaterally by the third respondent on the ground that consideration was not paid by the petitioner. Admittedly, Section 32-A of the Act also has not been complied with. Above all, cancellation was made on the ground of non payment of consideration by the petitioner. All the reported decisions are to the effect that such a sale is a completed transaction notwithstanding that the price agreed upon at the time of execution has never been paid.(vide. A Division Bench Judgement of this court in Govindammal vs.Gopalachariar, reported in 1906 vol.XVI MLJ, page 524). On presentation of the said document, the first respondent ought to have refused to register the same. Thus, the registration of the said document is without jurisdiction and therefore, the same is liable to be set aside.

25. The view taken by me herein, thus, draws full support from the minority judgment in Yanala Malleshwari and others v. Ananthula Sayamma and others and the learned Single Judge of the Andhra Pradesh High Court in Badugu Venkata Durga Rao v. Surneni Lakshmi and a learned single Judge of this court in P.Rajagurusamy vs. The Sub Registrar, Sub Registrar Office, Alandu at Nanganallur Chennai.

26. After the Full Bench judgment of the Andhra Pradesh High Court in Yanala Malleshwari and others v. Ananthula Sayamma and others case, the Andhra Pradesh Government introduced Rule 26-(k) of the Andhra Pradesh Registration Rules by means of an amendment dated 29.11.2006, which reads as follows:-

(i) The Registering Officer shall ensure at the time of presentation for registration of cancellation deeds of previously registered deed of conveyance on sale before him that such cancellation deeds are executed by all executant and claimant parties to the previously registered conveyance on sale and that such cancellation deed is accompanied by a declaration showing mutual consent or orders of a competent Civil or High Court of State or Central Government annulling the transaction contained the previously registered deed of conveyance on sale;

Provided that the registering officer shall dispense with the execution of cancellation deeds by executant and claimant parties to the previously registered deeds of conveyances on sale before him if the cancellation deed is executed by a Civil Judge or a Government Officer competent to execute Government orders declaring the properties contained in the previously registered conveyance on sale to be Government or Assigned or Endowment lands or properties not registrable by any provision of law.

(ii) Save in the manner provided for above, no cancellation deed of a previously registered deed of conveyance on sale before him shall be accepted for presentation for registration.

The said rule 26 (k) was challenged before the Andhra Pradesh High Court in Kaitha Narasimha v. The State Government of A.P., rep. By its Principal Secretary,(W.P.No.3744/2007) by contending that the same is ultra vires of the provisions of the Registration Act, 1908 and is contrary to the judgment of the Full Bench in Yanala Malleshwari and others v. Ananthula Sayamma and others. The Division Bench of the Andhra Pradesh High Court,by order dated 13.3.2007., while upholding the said Rule has held as follows:-

" In our opinion, the impugned rule does not in any manner violate the ratio of the majority judgment of the Full Bench. Rather, as mentioned above, it is a statutory embodiment of one of the rules of natural justice and is intended to curtail unnecessary litigation emanating from the ex parte registration of cancellation deeds."

As indicated in the above judgment, the principles of natural justice are also to be adhered to by the Registering Officer while dealing with a deed of cancellation of sale. If a unilateral cancellation deed is allowed to be registered, without the knowledge and consent of the other party to the earlier contract, as held by the Division Bench of the Andhra Pradesh High Court, such registration would cause violence to the principles of natural justice and lead to unnecessary litigations emanating therefrom.

27. When a public authority has acted without jurisdiction in violation of principles of natural justice, while performing a public function, the self imposed restrictions on the powers of the High Court under Article 226 of The Constitution of India, cannot place hurdles upon this court to interfere so as to safeguard the buyer's rights by setting aside the said act of the public authority.

28. Now, it is time to have a glance through the judgment of the Hon'ble Supreme Court in State of Rajasthan v. Basanth Nahata reported in A.I.R. 2005 SCC 3401, wherein the constitutionality of Section 22-A of the Registration Act as amended by the State of Rajasthan and also the notifications issued by it in terms thereof were tested. Section 22-A as it stood introduced is as follows:-

" 22-A. Documents registration of which is opposed to public policy:- (1) The State Government may, by notification in the Tamil Nadu Government Gazette, declare that the registration of any document or class of documents is opposed to public policy.


(2) Notwithstanding anything contained in this Act, the registering officer shall refuse to register any document to which a notification issued under sub-section (1) is applicable."

29. While striking down Section 22-A of the Act, the Hon'ble Supreme Court has held " the necessity of the legislatures delegating its powers in favour of the executive is a part of legislative function. It is a constituent element of the legislative power as a whole under Article 245 of the Constitution. Such delegation of power, however, cannot be wide, uncanalised or unguided. The legislature while delegating such power is required to lay down the criteria or standard so as to enable the delegatee to act within the framework of the statute. A subordinate legislation which is not backed up by any statutory guideline under the substantive law and opposed to the enforcement of a legal right, would not be valid. The principle on which the power of the legislature is to be exercised is required to be disclosed. It is also trite that essential legislative functions cannot be delegated. The procedural powers are, therefore, normally left to be exercised by the executive by reason of a delegated legislation..........."

"The executive while making a subordinate legislation cannot be permitted to open new heads of public policy in its whims . The provisions of the Act, therefore, do not lay down any guidelines to render it constitutional. The notifications issued by the State of Rajasthan themselves show that the uncertain position to which the parties to a transaction evidenced by a deed or a document can be put to. Despite the words of caution that the Court's duty is to expound the law and not expand, new heads of illegality of contract being opposed to public policy have been found out and in any event, there exists such a possibility........"

"The legislature of a State may lay down as to which acts would be immoral being injurious to the society. Such a legislation being substantive in nature must receive the legislative sanction specifically and not through a subordinate legislation or executive instructions. The phraseology "opposed to public policy" may embrace within its fold such acts which are likely to deprave, corrupt or injurious to the public morality and, thus, essentially should be a matter of legislative policy."

30. The State of Tamil Nadu also introduced a similar provision viz., Section 22-A. Based on the decision of the Hon'ble Supreme Court in the above judgment, a Division Bench of this Court in the case of B.Purushuothaman (Died), P.Indhurani and Pratheep Kumar (Minor) rep. By his mother andnatural guardian,P.Indhurani VS K.Chandran, The Inspector General of Registration, The Joint Sub Registrar-I and the Tahsildar in W.P.Nos.757 and 758 of 2007, struck down the said Tamil Nadu State amendment. The Government of Tamil Nadu had in exercise of power under Sec.22A, issued G.O.Ms.No.150, Commercial Tax Department dated 22.09.2000, which was also struck down.
The suggestion:
After the above developments, the State of Tamil Nadu,obviously, has not considered the situation prevailing in the State necessitating introduction of an appropriate provision in the Act or in the Rules itself so as to prevent registration of documents which are opposed to public policy. As we have noticed, the Andhra Pradesh Government has duly introduced Rule 26(k) of the Andhra Pradesh Registration Rules making it mandatory for the Registering Officer, not to register a deed of cancellation of a sale deed, if it is not executed mutually by the parties to the earlier sale deed. If it is the intention of the Government of Tamil Nadu, not to allow registration of certain kinds of deeds such as deeds of cancellation of sale, executed unilaterally, even now, it is left open to the Government of Tamil Nadu to bring an appropriate amendment to the Registration Act or to the Rules as has been done in Andhra Pradesh in tune with the law declared by the Hon'ble Supreme Court in State of Rajasthan v. Basanth Nahata by making it mandatory for the Registering officers to refuse to register certain documents which are opposed to public policy by succinctly defining the documents in the statute itself without delegating the power to define the same to the Executive. This court is hopeful, that the Government will take serious note of the situation prevailing in the State and fall in line with Andhra Pradesh Rules.

The conclusions:
31. Out of the foregoing discussions, the emerging conclusions are summed up as follows:-

(i) Challenging registration of a unilaterally executed deed of cancellation of a sale, a writ petition is maintainable under Article 226 of the Constitution of India;

(ii) A deed of cancellation of a sale executed by mutual consent by all parties to the sale deed, if presented for registration, the registering Officer is bound to register the same provided the other requirements like Section 32-A of the Registration Act have been complied with.

(iii) The Registering Officer is obliged legally to reject and to refuse to register a deed of cancellation of a sale unilaterally executed without the knowledge and consent of other parties to the sale deed and without complying with sec.32A of the Registration Act.

The Result:
32. In the result, the writ petition is allowed. The registration of the cancellation deed (document No.4433 of 2007) by the first respondent is hereby quashed. Having regard to the facts and circumstances of the case, the respondents 2 to 4 are directed to pay a cost of Rs.10,000/- (Rupees ten thousand only) to the petitioner. Consequently, connected miscellaneous petitions are closed.






sbi/pal

Note:
The registry is directed to communicate this order to
the Secretary to Government
for circulation to all the Registering Officers
through out the State of Tamil Nadu for compliance.


To

The Sub Registrar,
Office of Konur Sub Registrar,
Sidco Nagar,
Chennai 49








Tags :- registration deed cancellationunilateral




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