When you buy or sell a house, flat, site or land, you hear the talk about ‘registration’ of the Sale Agreement or the ‘Sale Deed’. But you do not hear about it when you sell or buy, say, a gold chain or a motor car! Why is it so?
When you buy or sell a house or a flat or a land or a site, you are transferring an asset of an immovable nature. You are then required to have such a transaction recorded in the office of the sub-registrar. Such recording is called registration, which constitutes a notice, loud and clear, to the world at large that you have bought such a property or sold such a property and seeks protection of law for your action. Buying or selling a movable thing – a car or jewelry, for example – which is not an immovable asset – does not require a public notice or protection of law.
Registration of a transaction involving an immovable property is mandatory. The processes of making a registration are contained in The Registration Act, 1908. This is a Central Act but the registrations of documents are done by the authorities appointed by the State Government. Each State is empowered to make separate amendments to the Act to deal with registration matters related to that State and to frame Rules thereunder.
A document, Sale Deed, for example, should be presented before the sub-registrar for registration within four months from the date of its execution by the buyer and the seller. A registered document becomes effective retrospectively from the date of execution. Registration validates the transaction. In other words, non-registration of a Sale deed brings the transaction to naught. The buyer does not get the ownership of the property in his name even after paying its price in full.
Any document relating to property situated anywhere in India can be registered within the related State or in the four Metropolitan cities, namely, Calcutta, Bombay, Delhi and Madras, except where, under specific provisions under the State laws, they are prohibited. The District Registrar has the power to order a document to be registered in the name of the buyer, if he is satisfied that the document has been properly executed by the seller and all legal requirements have been met, even though the seller denies having signed the sale deed.
Which Documents are compulsorily to be registered?
By force of section 17 of the Act, the following documents are compulsorily registrable:
- Gift of immovable property
- All other instruments dealing with rights, title and interest in immovable property of the value more than one hundred rupees
- Instruments, which acknowledge the receipt or payment relating to, the aforesaid rights in immovable property
- Leases exceeding a term of one year or leases having a yearly rent
- Transfer or assignment of any decree or order of a Court or any award dealing with aforesaid rights, title and interest in immovable property
- In all these cases, the transaction should be of value more than one hundred rupees; and
- The instrument should be non-testamentary.
However, compulsory registration does not apply to documents under the following cases:
- Any composition made
- Any transfer of shares of a company, even though the company has immovable property
- Any issue of debenture of a company not involving any transfer of right, title and interest in immovable property
- Any endorsement or transfer of any debenture
- Any document which by itself does not deal with rights in immovable property but only creates a right to obtain another document which will deal in rights to immovable property
- Any decree or order of the Court; however, any Compromise Decree dealing with immovable property other than the subject matter of the suit requires to be compulsorily registered
- A grant of the immovable property by the Government
- any endorsement or a mortgage deed acknowledging receipt of money by way of repayment
- Any certificate of sale granted to the purchaser of any property sold by public auction by a civil or a revenue officer
- A contract for sale of immovable property does not require registration even though it contains reference to payment of part or whole of purchase money or endorsement
Which Documents may or may not be registered by the maker?
Section 18 of the Act leaves registration of the following documents to the option of the executor:
- Instruments dealing with property of value less than one hundred rupees
- Instruments acknowledging receipt or payment of consideration relating to transactions of immovable properties
- Lease of immovable property
- Any other documents which are not compulsorily registrable
When does the Court admit or not admit a Document in Evidence?
Section 34 of The Karnataka Stamp Act, 1957, deals with instruments which are not duly stamped. The Section also provides that no instrument which is chargeable to stamp duty shall be admissible in evidence in a Court or shall be acted upon, unless such instrument is duly stamped. Notice that even a document which is duly registered or authenticated by any Public Officer is not admissible in evidence if it is not duly stamped. In practice, the Registrar will not register any instrument, which is chargeable to duty, unless it is duly stamped.
Section 126 of the Contract Act, 1872, while defining a contract of Guarantee provides that a Guarantee may be either oral or written. A written guarantee, even if not duly stamped, but duly registered, can be enforceable in law.
When does Non-registration invalidate Transfer?
A Partition of property of a Hindu Undivided Family does not become void for the reason of non registration, so long as the partition remains oral. Where, however, a partition of Joint Hindu Undivided Family is reduced in writing, such deed is inadmissible in evidence unless it is registered.
When once the parties by oral partition have divided the properties by metes and bounds and put into writing by way of Memorandum of Partition, the joint character of the property comes to an end and each of the party would become exclusive owner of the share allotted to him or her. If, however, there is any further exchange of properties between the parties, such transaction should necessarily be by registered documents under Section 17 of the Act.
This means that a reversal of allotment of properties made under an earlier partition cannot be done under oral transaction. Such reversal should necessarily be done under a written document which becomes compulsorily duly stamped and registered. For, under the Hindu Succession Act, 1956, partition of property among the coparceners need not be backed by an instrument in writing. Further, under Section 17 of the Act, a deed of Family Settlement relating to a Joint Hindu Family property is not required to be compulsorily registered, if such deed does not create any right to or interest in a property. Also, a Deed of Settlement is not required to be compulsorily registered under Sec. 17 of the Act, if the relinquishment of the property is to take effect at a future point in time.
An agreement referring to a loan, the mode of its repayment and its utilisation, which does not mention about any mortgage of immovable property as a security, does not require to be stamped under Article 6 of the Karnataka Stamp Act, 1957, nor requires to be registered. A Memorandum stating a deposit of title deeds is made by a borrower as a security for a loan with an intention to create a mortgage in future does not become necessary to be registered.
An award of granting division of properties which did not of its own accord create any interest in immovable property but merely placed on record divisions made and accepted by the parties does not require registration(1961 SCR 792).
What happens when Title to Property is disputed?
Where an Encumbrance Certificate reveals a conflict of title to the same property between several claimants, the Sub-Registrar is not the competent authority to decide the question of title and therefore cannot entertain any application for deleting, modifying or altering entries relating to registered documents.
Where a person claiming ownership over immovable property finds that someone else has sold the same property under a registered sale deed, the appropriate course of action that is open for such person is to file a suit for declaration and consequential relief. Alternatively, claimant may ignore such sale deed and leave it to the person claiming title under such sale deed to establish his title. No person can apply for removals of entries mentioned in the neither Encumbrance Certificate nor can he requires require the Sub-registrar to cancel registration of the disputed Sale Deed.
Some common matters arising while Registration
- Where the language of the document is not the language commonly used in the district and the language is not understood by the registering officer, a true translation into a suitable language should be made and annexed.
- Where there are erases, corrections, alterations or blank spaces in the document, they should be attested by the parties, and the registering authority shall make a note of such things.
- The document should contain a clear definition of the property sufficient to identify it. Houses in towns shall be described as situate on the north or other side of the street or road (which should be specified) to which they front, and by their existing and former occupancies, and by their numbers, if the houses in such street or road are numbered.
- Other houses and lands shall be described by their name, if any, and as being in territorial division in which they are situate, and by their superficial contents, the roads and other properties on which they abut. And their existing occupancies and also, whenever it is practicable, by reference to a Government map or survey.
- No non-testamentary document containing a map or plan of any property contained therein shall be accepted for registration unless it is accompanied by a true copy of the map or plan, or, in the case where such property is situate in several districts, by such number of true copies of the map or plan as are equal to the number of such districts.
Description of Houses and Land by reference to Government Maps or Surveys
Where in the opinion of the State Government, it is practicable to describe houses and lands situated in rural and moffusil parts by reference to a Government map or survey, the State Government may by a Rule under the Act require that such houses and lands be so described.
How soon should you present documents for Registration?
- All documents except a Will should be presented for registration within four months of its execution. In the case of a decree or order of a Court the period of four months should be reckoned from the date of the lapse of the period of appeal against such decree or order.
- Where the delay in presentation of a document is due to unavoidable causes, the registrar on application can condone the delay for a period not more than four months, by levying a fine not exceeding ten times the normal registration fee.
- Documents executed out of India can be registered by the registering officer if he is satisfied that it was genuinely executed and it is presented for registration within 4 months of its arrival in India.
- Documents executed by different persons at different times can be presented for registration within four months from the date of each execution.
- Wills, however, may be presented for registration at any time after execution.
Where should you go for Registration?
- Normally with the Sub-Registrar, having local jurisdiction where the property is situated
- Any Registrar can register a document himself, which may come within the jurisdiction of the sub-registrar subordinate to him.
- Normally, a document shall be registered at the registering office; however, on a special ground shown by a person, a document may be registered at the residence of such person.
Who should or can present documents for Registration?
Any party executing or claiming under a document or a decree or a Court order shall present the document at the registration office. Alternatively, any duly authorised representative of such party may also present the document for registration.
Matters Relating To Power Of Attorney
For the purposes of presenting the document for Registration the following types of Powers of Attorney are recognised:
- Any Power of Attorney registered before the registrar having jurisdiction of the place where the person giving the Power of Attorney (the ‘Principal’) resides;
- Where the principal resides in a place in India to which this Act does not apply it should be authenticated before a Magistrate;
- Where the principal resides out of India to be authenticated by a Notary Public, any court, judge, Magistrate or Indian Consulate or representative of the Central Government.
A General Power of Attorney for both executing the document and presenting it for registration before the Registrar may be attested by a Notary Public or a First Class Magistrate. However, if the power is only for presenting the document for registration and for admitting its execution on behalf of the executor, such power of attorney should be registered only by the registering authority.
When can Registrar himself register documents?
Where in the execution of a document is denied by one party mentioned in the document, and for that reason the document is not registered by the Sub-Registrar, sections 73, 74 and 75 of the Act provide for the other party to approach the Registrar for obtaining registration of the document. This is a valuable right vested in the transferee of a property to counter a deceitful transferor who is not prepared to assist registration of the document after signing it.
When can Sub-Registrar refuse to register?
Section 71 of the Act empowers the sub-registrar to refuse to register a document by duly recording, however, the reasons for refusal. An appeal can lie before the Registrar against such refusal. If the Registrar directs the Sub-Registrar to grant registration, the Sub-Registrar shall obey such direction, provided the executors present the document before him once again before 30 days.
Re-registration of certain Documents
Where a document is presented for registration by a person not authorised to do so, and the document has been nevertheless registered, any person claiming under such document may, within four months from his first becoming aware of such defect, present such document for re-registration in the same office of registration where it was originally registered. If the registering officer grants re-registration the document shall be deemed as registered from the date of its original registration.
When can Registrar condone delay in Presentation?
Where there are several persons executing a document at different times, such document may be presented for registration and re-registration within four months from the date of each execution. Where the delay in presentation for registration or re-registration is shown to be due to circumstances beyond one’s control, the Registrar may permit registration or re-registration, if an appeal is made by the parties within a further period of four months from the expiration date. In that event, the executor may be directed to pay a fine not exceeding ten times the amount of proper registration fee.
Affixing of Photographs
Every document whether compulsorily or optionally registrable, presented by (a) a person executing or claiming under it; or (b) by the representative or assign of such person or (c) by an agent holding an authorised Power of Attorney, shall carry his finger prints and a passport size photograph
Registered Documents and Oral Agreements
All non-testamentary documents relating to any property duly registered under the Act shall take effect against any oral agreement or declaration relating to such property. However, the latter of the two shall prevail when it is accompanied or followed by delivery of possession.