Registration of sale agreement no bar to sell property to third party- Madras HC

N. Ramayee v. The Sub-Registrar, Valapady, Salem District and Anr., Writ Petition No.674 of 2020 - 5th November, 2020

Counsel for Appellant: Mr.Murugamanickam

Counsel for Respondents:Mr.S.R. Rajagopal (Additional Advocate General) and Mr.S. Suresh Kumar.

The High Court of Madras Justices C.V. Karthikeyan And Justice N. Sathish Kumar in the case where conflicting judgments were given as to whether once sale agreement is registered by the Vendor, the subsequent documents in respect of the same immovable property could be refused to be registered by the Registrar has held that a registrar has no right to refuse to register the subsequent document on the basis that agreement of sale was already registered in respect of same property.

By an order dated 07.03.2019, a learned Single Judge of this Court had directed the 2nd Respondent, Sub-Registrar, Thiruverumbur, to register an Agreement of Sale entered into by the Petitioner, notwithstanding the fact that the Petitioner had earlier registered an Agreement of Sale with respect to the same property. The objections raised by the 2nd Respondent that the earlier agreement was still in force, was brushed aside by the learned Single Judge. Consequently, by a similar order dated 02.12.2019, this Court had directed the Petitioner therein who wanted to register a Settlement Deed, notwithstanding the fact that an Agreement of Sale with respect to the same property had been registered, to approach the competent Civil Court and seek a declaration that the Agreement of Sale was null and void and unenforceable. The conflict on the judgments has resulted in the present case.

The learned Senior counsel for the Petitioner relied upon the judgment in Latif Estate Line India Ltd v. Hadeeja Ammal [2011 (2) CTC 1] wherein it has been held that there is no provision in the Transfer of Property Act or in the Registration Act, which deals with the Cancellation of Deed of sale. In Satya Pal Anand v. State of M.P. [(2016) 10 SCC 767] the Honourable Apex Court has held that the role of Sub-Registrar (Registration) stands discharged, once the document is registered. Power to cancel the registration is a substantive matter.

The issue raised based on the Transfer of Property Act is as follows:

Whether the transfer is restricted to one time in respect of the immovable property, unless the previous transfer or any agreement is set aside in the court of law, and is other transfer permissible?

The scope of enquiry to be made by registering officer is limited by the Registration Act, 1908 to the factum of execution and the identity of person executing the document. Conspectus of the various provisions in the Act makes it clear that the Registering Officer cannot go into the title of the property in respect of which document is presented. However, under various provisions he has power to refuse to accept the document for registration unless mistakes found in the document are set right properly. Except Section 22-A of the Tamil Nadu Act, other provisions referred above do not give any power to the registering officer to refuse to register the document presented by the person executing documents.

Sec. 7 of the Transfer of Property Act makes it very clear that even a person not entitled transferable property is competent to transfer such property when he was authorized to dispose of such property. Sec. 43 of the Act states that even a person who has no title over the property purports to transfer to another by deed and when he subsequently acquires any interest in the property, sufficient to satisfy the transfer, the title would pass to the transferee without any further act on the part of the transferor, provided the transferee has not rescinded the transfer and opts for such effectuation. The above principle also makes it very clear even a transfer by unauthorized person is not prohibited. Only the validity of the title would be subject to his acquiring subsequent interest in the property. It is also pertinent to note that even if transfer is made during a pending suit; such transfer is not void but is subject to the result of the suit.

If the analogy is drawn from the judgment of the single judge in order dated 07.03.2019 that agreement once registered there cannot be any subsequent settlement deed is accepted, such situation even may lead to the contention that even where a simple mortgage is created, the mortgagor cannot transfer the property for any other purpose even for a lease, even though lease is just transfer of right to enjoy the property. The judgment holding that unless there is declaration declaring the agreement for sale is null and void is obtained from civil court no further transfer could be registered, which is, in our view, not according to law. Effect of the subsequent transfer is always subject to the earlier transfer created by the transferor of the immovable property. Therefore, it cannot be said that since the agreement for sale is registered the owner viz., the Vendor has no right to execute any document. Hence, the view taken by the Single Judge in the above case is overruled. The judgment in order dated 02.12.2019 is also not based on any discussion on substantive law or proceedings and therefore does not lay down any law.

"If an agreement for sale is registered in respect of immovable property, the same will not be a bar for the owner of the property to effect subsequent transfers in respect of the same property. The Registrar has no right to refuse to register the document, except the documents relating to immovable properties mentioned in Section 22-A of the Tamil Nadu Act and as contemplated under Rule 162 of the Registration Rules." (Para 37)

The court observed that except as provided in the Registration Act and any other statute, the Registrar has no power to refuse to register a document. It cannot be said that merely because agreement for sale is registered without obtaining decree of declaration that such agreement is void, subsequent transfer is prohibited and cannot be registered. It held that a Registrar has no right to refuse to register the subsequent document on the basis that agreement of sale was already registered in respect of same property. Hence the appeal stands dismissed.

M. Maheswari

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