Mandatory Registration of Documents Relating to Immovable Property

Introduction

The Registration Act, 1908 (the “Indian Registration Act”) was enacted for inter alia providing the procedure for registration of transactions related to immovable property, to provide notice/information to the public at large, to avoid multiple transactions with respect to the same property and to protect the interest of the purchaser.

Purpose of Registration

Section 3 of the Transfer of Property Act, 1882 provides that where any transaction relating to immoveable property is required by law to be and has been effected by a registered instrument, any person acquiring such property or any part/ interest thereof, shall be deemed to have notice of such instrument from the date of registration, provided the instrument has been registered as per the Indian Registration Act.

As such, registration of documents with the relevant authorities serve the following purposes:

1. To notify the general public interested in dealing with  immoveable property;
2. To ascertain the actual owner of such property and extent of rights that the owner possess;
3. To prevent forgery and fraud; and
4. To enable the persons to ascertain whether any charge is created on such property.

Mandatory Registration of Instruments

Section 17(1) of the Indian Registration Act enumerates the following types of documents which are to be mandatorily registered:

1. 1. Gift of immovable property;
2. 1. 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;
3. 1. Non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest;
4. 1. Leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent; and
   2. Non-testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates 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.

As such, in view of the Section 17(1) Indian Registration the following documents are mandatorily registerable, if the value of the immovable property is INR 100/- (Indian Rupees One Hundred) and above namely: (a) Gift Deeds, (b) Sale Deeds, (c) Conveyance Deeds, (d) Settlement Deeds, (f) Release Deeds, (g) Partition Deeds, (i) Lease Deeds of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, and (j) Power of Attorney coupled with interest creating rights in the immovable property.

Amendment to Section 17 of Indian Registration Act in State of Andhra Pradesh

The State of Andhra Pradesh amended the provisions of Section 17 of Indian Registration Act vide Act No. 4 of 1999, with effect from April 1, 1999 and included the following provisions:

1. Leases of immovable property
   1. any decree or order or award or a copy thereof passed by a civil Court, on consent of the defendants or on circumstantial evidence but not on the basis of any instrument which is admissible in evidence under Section 35 of the Indian Stamp Act, 1899, such as registered title deed produced by the plaintiff where such decree or order or award purports or operate to create, declare, assign, limit, 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; and
   2. agreement of sale of immovable property of the value of one hundred rupees and upwards; and

Further to the amendment in the state of Andhra Pradesh (united), the following documents are mandatorily registrable and in view to attract clause (d), (f) and (g) of Section 17 of Indian Registration

1. 1. 1. leases of immovable property shall be for any term/period;
      2. The (a) decree or order or award shall be passed by Civil Court, (b) with consent of the defendants in the suit, and (c) decree or order or award creating the right, title and interest in the immovable property of the value of hundred rupees or more; and
      3. The value of the immovable property in the agreement of sale should be one hundred rupees and more.

Further the Indian Registration Act has been amended vide Act 48 of 2001 dated September 24, 2001 and the following provisions were included as Section 17(1A) of Indian Registration Act: The documents containing contracts to transfer for consideration, any immovable property for the purpose of Section 53-A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the Registration and Other Related Laws (Amendment) Act, 2001 and if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said Section 53-A.

In order to attract Section 53A of the Transfer of Property Act 1882, for the aforesaid purpose, the following conditions need to be fulfilled:

1. There should be contract for consideration;
2. It must be in writing;
3. It must be signed by the transferor;
4. It must be pertaining to the transfer of immovable property;
5. The transferee should have taken possession of property;
6. Lastly, transferee should be ready and willing to perform the contract.

It is further pertinent to note that the Supreme Court of India in S. Kaladevi vs V. R. Somasundaram and Others[1] while dealing with validity of registration, held that:

“(a) A document required to be registered, if unregistered is not admissible into evidence under Section 49 of the Registration Act, (b) Such unregistered document can however be used as an evidence of collateral purpose as provided in the proviso to Section 49 of the Registration Act, (c) A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration, (d) A collateral transaction must be a transaction not itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immovable property of the value of one hundred rupees and upwards, (e) If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose and (f) A document required to be registered, if unregistered, can be admitted in evidence as evidence of a contract in a suit for specific performance”.

Conclusion

As such, the documents in respect of immovable properties, which are compulsorily registerable as per the Indian Registration Act, have limited evidentiary value if they are not registered as per the provisions thereof. Such unregistered documents would not operate to create, declare, assign, limit or extinguish in present or in future, any right, title or interest whether vested, or contingent to or in immoveable property, except as provided in Section 49 of the Indian Registration Act.

The views and opinions expressed in this article belong solely to the author and do not reflect the position of Tatva Legal, Hyderabad.

[1] AIR 2010 SC 1654