Registration Act Does Not Contemplate Inquiry Into Whether PoA Holder Who Executed Document Had Valid Power Of Attorney: Supreme Court

The Supreme Court observed that the production of the original power of attorney is not necessary, if the document is presented for registration by the power of attorney holder who executed the document on the strength of it.

"The inquiry contemplated under the Registration Act, cannot extend to question as to whether the person who executed the document in his capacity of the power of attorney holder of the principal, was indeed having a valid power of attorney or not to execute the document or not", the bench comprising Justices KM Joseph and PS Narasimha observed in a judgment delivered last week.

In this case, the plaintiff filed a suit for declaration that he is the owner in possession of that property and the mutation showing the sale in favour of the first defendant, by the second defendant, was null and void, and that the second defendant was not having any authority to sell the land owned by the plaintiff, and hence the defendant be restrained from interfering with the ownership and possession of the plaintiff.

According to the plaintiff, he had bonafide executed a special power of attorney in favour of the 2nd defendant for selling the property for the amount of Rs. 55,000/-. As the negotiation fell through in view of the first defendant not being able to arrange the money, the second defendant to whom the power of attorney was executed, surrendered the original to the plaintiff, and the plaintiff told the first defendant that the same stood cancelled. Thus the second defendant, according to the plaintiff, could not execute the sale deed in the absence of the original power of attorney, and the sub-registrar was supposed to verify the aspect from the second defendant under Sections 32, 33 and 34 of the Registration Act. The Trial Court dismissed the suit and the same was upheld by the First Appellate Court.

Allowing the second appeal, the High Court observed that In view of the cancellation of the original power of attorney, the same could not be relied upon by the Registering Authority for the purpose of execution of the sale deed. The High Court also held that as per Section 18 of the Registration Act, it was necessary for the Registering Authority to see the true copy of the special power of attorney.

Disagreeing with the High Court's view, the Supreme Court noted that Section 18A contemplates the production of a true copy of a document, which is sought to be got registered and not the true copy of the power of attorney.

"The understanding of the Courts regarding Section 18A is also erroneous. Section 18A was enacted only to ensure that the copying process is hastened, as noticed from the Objects and Reasons. The Trial Court was right when it held that Section 18A is concerned only with the document which is presented for registration. The Trial Court clearly erred relying upon Section 18(A) to hold that certified copy however being produced of the power of attorney was in conformity with Section 18A and the High Court was equally in error to hold that Section 18A contemplated production of true copy of the power of attorney."

The court then proceeded to examine the contention of the plaintiff that having regard to Sections 32 and 33 of the Act, the original power of attorney should be produced. The bench noted the following :

1. When a person empowers another to execute a document and the power of attorney, acting on the power, executes the document, the power of attorney holder can present the document for registration under Section 32(a). Section 32(a) of the Registration Act deals with the person executing a document and also the person claiming under the same. It also provides for persons claiming under a decree or an order being entitled to present a document.
2. Section 32(b) speaks about the representative or assignee of 'such a person'. The word such a person in Section 32(b) is intended to refer to the persons covered by Section 32(a).
3. Section 32(c) provides for the agent of 'such a person' which necessarily means the persons who are encompassed by Section 32(a). Besides agent of the person covered by Section 32(a), Section 32(c) also takes in the agent of the representative or assignee. Now the words representative or assignee are to be found in Section 32(b). Thus, Section 32(c) deals with agents of the persons covered by Section 32(a) and agents of the representative or assignee falling under Section 32(b). It is in respect of such an agent that there must be due authorisation by a power of attorney, which in turn, is to be executed and authenticated in the manner provided for in Section 33.
4. The person, who has actually signed the document or executed the document for the purpose of Section 32(a) does not require a power of attorney to present the document. It may be open to the principal, who has entered obligations under the document, to present the document.
5. Section 32(c) must alone be read with Section 33 of the Act. Thus, when Section 32(c) of the Registration Act declares that a document, whether it is compulsorily or optionally registrable, is to be presented, inter alia, by the agent of such a person, representative or assignee, duly authorised by power of attorney, it must be executed and authenticated in the manner and hereinafter mentioned immediately in the next following section.
6. Section 33 by its very heading provides for power of attorney recognisable for the purpose of Section 32. Section 32(a) cannot be read with Section 33 of the Act. In other words, in a situation, if a document is executed by a person, it will be open to such a person to present the document for registration through his agent. The agency can be limited to authorising the agent for presenting the document for it is such a power of attorney, which is referred to in Section 32(c). It is in regard to a power of attorney holder, who is authorised to present the document for registration to whom Section 33 would apply.
7. Section 34 provides for the inquiry to be done by the Registering Office before he orders registration. It declares that no document shall be registered under the Act unless the persons executing such document or their representatives, assigns or agents authorised as aforesaid, appear before the Registering Authority before the time, allowed for presentation under Sections 23, 24, 25 and 26. This is, however, subject to Sections 41, 43, 45, 69, 75, 77, 83 and 89.
8. Appearances under Section 34(1) may be simultaneous or at different times. Section 34(3)(a) enjoins upon the Registering Officer to enquire whether or not such document was executed by the persons by whom it purports to have been executed. Section 34(3)(b) further makes it his duty to satisfy himself as to the identity of a person's appearing before him and alleging that they have executed the document. It must be understood and read along with Section 32(a). Section 32(a) mandates presentation of the document for registration by some person executing or claiming under the same, inter alia. In respect of a person who presents the document, who claims to have executed the document, not only is he entitled to present the document for registration, in the inquiry under Section 34 34(3)(a) and 3(b), the duty of the Registering Officer extends only to enquire and find that such person is the person who has executed the document he has presented and further be satisfied about the identity of the person.
9. When it comes to Section 34(3)(c), the Registering Officer is duty-bound in respect of any person appearing as a representative, assign or agent to satisfy himself of a right of such a person to so appear. Section 34(3)(c) is relatable to persons covered by Section 32(b) and 32(c) of the Act.
10. The word 'agent' is to be understood as a person who is authorised to present the document for registration. Such an agent would fall under Section 32(c). Thus, in regard to persons falling in Section 34(3)(c), it would, indeed, be incumbent on the agent, inter alia, to produce the power of attorney as such.

The court further noted that, in the facts of this case, the second defendant was armed with the power of attorney dated 28.01.1987 and if it was not cancelled and he had executed the sale deed on 28.04.1987, he would be well within his rights to present the document for registration under Section 32(a) of the Act. Therefore, the bench observed thus:

25. For reasons, which we have indicated, Section 32(c) read with Section 33 and Section 34(2)(c) are interrelated and they would have no application in regard to the document presented for registration by a power of attorney holder who is also the executant of the document. In other words, there is really no need for the production of the original power of attorney, when the document is presented for registration by the person standing in the shoes of the second defendant in this case as he would be covered by the provisions of Section 32(a) as he has executed the document though on the strength of the power of attorney. To make it even further clear, the inquiry contemplated under the Registration Act, cannot extend to question as to whether the person who executed the document in his capacity of the power of attorney holder of the principal, was indeed having a valid power of attorney or not to execute the document or not.

Regarding the contention that the power of attorney was cancelled by the plaintiff, the court observed that there is no whisper in the plaint about the plaintiff having cancelled it in the manner in which he has deposed to in the evidence. While allowing the appeal, and restoring the Trial Court judgment, the bench observed:

"At any rate, we find it difficult to accept the case of the plaintiff that the first defendant, who is the third party, could be attributed any knowledge of the surrender or the alleged cancellation on 02.02.1987, even assuming for a moment that we could lend credence to the plaintiff's version in this regard that the second defendant surrendered the power of attorney. We need not pronounce on the question whether the power of attorney being registered, it could be cancelled only by a registered power of attorney. This we say as even in the absence of a registered cancellation of the power of attorney, there must be cancellation and it must further be brought to the notice of the third party at any rate as already noticed. Such a cancellation is not made out"