Sale of an immovable property, as per the Transfer of Property Act, 1882, is transfer of ownership of the property in lieu of the sale consideration. A sale is concluded when a sale deed is executed and registered by the seller in favour of the buyer, thereby creating rights, title and interest in favour of the buyer.
Several states across the country have issued circulars vesting powers with the registering authority to cancel the sale deeds where the execution / registration of sale deed has been obtained fraudulently. There have also been many instances where the registering officer have cancelled the registered sale deed, either on the orders of Inspector-General or suo-motu.
Such circulars / actions taken by the registering authority to cancel sale deed have been challenged on the grounds that once the document is registered, it is not open to the Registering Officer to cancel the registration of that document and that the power of cancellation of registered sale deed could not be delegated to the Registrar in exercise of executive power, without any legislation and enactment to that effect.
Interestingly, in 2023, the Andhra Pradesh Legislative Assembly brought Registration (Andhra Pradesh Amendment) Bill, 2023 which sought to insert Section 77-A in the Registration Act, 1908 ('Registration Act') to provide for cancellation of registered document in certain cases. Vide the said Amendment Bill of 2023, the powers have been delegated to Registrar as well as to Inspector General of Registration for cancellation of instruments/ documents in cases where: (A) it is a forged document or pertaining to transaction which is prohibited under Law in force or (B) the same property, which is sought to be conveyed under the present instrument, has previously been conveyed by way of registered document or (C) in following cases: (i) property belongs to State Government or local authority, (ii) any other document as the State Government may, by notification, specify. The said Bill of 2023 received assent from the President of India on December 17, 2023.
Similar amendments have also been brought by the Tamil Nadu Legislative Assembly by way of Registration (Tamil Nadu Second Amendment) Act, 2021 granting powers to the Registrar as well as to Inspector General of Registration for cancellation of instruments/ documents in cases where: (A) it is a forged document or pertaining to transaction which is prohibited under Law in force; or (B) in following cases and where no sanction has been issued by the competent authority: (i) property belongs to State Government or local authority, (ii) property belongs to or given or endowed to religious institution to which the Tamil Nadu Hindu Religious and Charitable Endowments Act, 1959 is applicable, (iii) property is donated for boodan yagna and vested in Tamil Nadu State Bhoodan Yagna Board, (iv) property belongs to Wakfs which are under the superintendence of Tamil Nadu Wakf Board.
As per Section 17 (b) of the Registration Act, any non-testamentary instrument which create, declare, assign, limit or extinguish, any right, title or interest, of the value of one hundred rupees or more, to or in an immovable property, is required to be compulsorily registered. However, once the registration of the sale deed is complete, there is no provision in the Registration Act for cancellation of sale deed.
The Registering Officer has been vested with powers to refuse to register a document. There are also provisions for correction of typographical defect in the sale deed by registrar after process of registration of a document is complete, but in legal sense, the registering authority thereafter become 'functus officio' and cannot exercise power to cancel the registration of document on its own as it does not have the power to do so under the Registration Act. Under Section 83 of the Registration Act, power of Registrar is confined to initiate prosecution against any one making false statement, delivering false copies etc. in the registration process, but there is no provision to annul or cancel the said registration.
Under the Specific Relief Act, 1963 ('SRA') the aggrieved can seek cancellation of a registered instrument on the ground of fraud, by filing a suit under Section 31. In case a person without any title, executed a sale deed, the real owner may file a suit under Section 34 of SRA, if his peaceful enjoyment of ownership right is impinged due to the said sale.
In a recent judgement, the High Court of Jharkhand in the matter of Vinod Shankar Jha vs. State of Jharkhand (WPC No. 3103 of 2020) dealt with the issue of cancellation of registered sale deed by the registering authority by exercising the powers conferred to it by the Circular No.16930 issued by the Secretary, Department of Revenue and Land Reforms, Government of Jharkhand, Ranchi, whereby the jurisdiction was conferred on Deputy Commissioner-cum-Registrar for cancellation/annulment of registered sale deeds.
In this matter the High Court opined that the power of cancellation and declaring the registration as null and void vests with the civil court, as the veracity of allegation that the sale deed has been fraudulently registered cannot be decided in a summary inquiry as there arises both civil and criminal liability. The Single Judge observed that, “Unless there is a declaration by a civil court that a deed is vitiated by fraud, a registered deed cannot be cancelled by the Registrar.” The court held that the existing provisions of the Registration Act, do not confer the Registrar with power to cancel a document which has been already registered. Even in cases of fraud or forgery, Registration Act, does not confer such a power on the Registrar to cancel a registered instrument.
In another case of Areness Foundation vs. Government of NCT of Delhi (WPC 9123 of 2018), the High Court of Delhi, relying on the case of Satya Pal Anand vs. State of MP (discussed hereinafter), held that the registrar has no powers under the Registration Act to annul a registration document as the role of the registering authority stands discharged after registering the document. Even the Inspector General has no power to cancel the registration of the document which has already been registered.
In the landmark case of Satya Pal Anand vs. State of MP (2016) 10 SCC 767, the Supreme Court of India held that, “There is no express provision in the 1908 Act which empowers the Registrar to recall the registration…Once the document is registered, it is not open to any Authority, under the 1908 Act to cancel the registration…The power conferred on the Registrar by virtue of Section 68 cannot be invoked to cancel the registration of the documents already registered.”
To summarise circulars issued by State Government granting the power to cancel a registered sale deed on grounds of fraud etc. to the registering authority, such circulars are amenable to challenge and subject to quashing. Once a sale deed is executed and registered, there is presumption that document is validly executed, and a registered document would prima facie be valid in eyes of law. Cancelling the same would have legal consequences and therefore cancellation of a registered sale deed can be effected either by way of declaration by a civil court or by registering authority to whom the powers of cancellation of sale deed have been vested by virtue of appropriate legislative amendment(s) in the Registration Act.
Author: Santosh Singh, Partner and Anisha Jhawar, Associate, ZEUS Law Associates. Views Are Personal.