Post on 30-Nov-2015
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UNILITERAL CANCILLATION OF REGISTRED
DEEDS
By: - K.V.S.S.Prabhakara Rao, Advocate, Rajahmundry
1. When a cancellation deed, executed unilaterally by one party is
presented before a statutory authority viz., the Registering officer, the
question is, whether he is bound to register the same despite the fact that
obviously the said document is void or illegal and that the document has not
been duly executed as per law.
2. Indian Registration Act, when a document is presented for registration,
the Registering officer has got only limited powers to make an enquiry as
provided under Section 34 of the Act, wherein he is required to ascertain the
following viz.,
"Section 34 (3)(a):- enquire whether or not such document was
executed by the persons by whom it purports to have been executed;
(b) Satisfy himself as to the identity of the persons appearing before
him and alleging that they have executed the document (or they are claiming
under the document); and
(c) in the case of any person appearing as a representative, assign or
agent, satisfy himself of the right of such person so to appear. If he is satisfied
on the above aspects, according to the learned counsel, the Registering
officer has no other option except to register the document. In the case on
hand, it is contended, since these conditions were satisfied, the Sub Registrar
was right and very much within his jurisdiction to register the said cancellation
deed.
(d) Thus, it is now too well settled that a cancellation deed, which is
executed unilaterally by one party to the contract is illegal.. When such a
cancellation deed, executed unilaterally by one party is presented before a
statutory authority viz., the Registering officer, the question is, whether he is
bound to register the same despite the fact that obviously the said document
is void or illegal and that the document has not been duly executed as per
law.. It is the contention of the respondents 2 to 4 that as per the Indian
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Registration Act, when a document is presented for registration, the
Registering officer has got only limited powers to make an enquiry as
provided under Section 34 of the Act, wherein he is required to ascertain the
following viz., Section 34 (3)(a):- enquire whether or not such document was
executed by the persons by whom it purports to have been executed; (b)
satisfy himself as to the identity of the persons appearing before him and
alleging that they have executed the document (or they are claiming under the
document); and (c) in the case of any person appearing
3. .The Section 34 of the Act does not expressly provide that the
Registering officer should hold an enquiry in respect of the validity of the
document presented for registration. But, Rule 55 of the Registration Rules
states thus:-
Rule 55. It forms no part of a registering officer's duty to enquire into
the validity of a document brought to him for registration or to attend to any
written or verbal protest against the registration of a document based on the
ground that the executing party had no right to execute the document; but he
is bound to consider objections raised on any of the grounds stated below:-
(a) That the parties appearing or about to appear before him are not
the persons they profess to be;
(b) That the document is forged;
(c) That the person appearing as a representative, assign or agent, has
no right to appear in that capacity;
(d) That the executing party is not really dead, as alleged by the party
applying for registration; or
(e) That the executing party is a minor or an idiot or a lunatic.
4. Sections 34 and Rule 55, one can have an impression that it is none of
the duty of the Registering Officer to find out the validity of the document
before proceeding to register the same. But, indeed, it is not so. Section 34
and Rule 55 speak of the limitations on the powers of the Registering Officer
to hold enquiry, which would only mean that the Registering Officer is not
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required to hold a roving enquiry to decide the validity of a document
presented for registration. On the other hand, if, by simply glancing through
the document, without there being any necessity to hold any enquiry, the
Registering Officer is satisfied that the document is either void ab initio or
illegal, in such a situation, it cannot be said at any stretch of imagination, that
the Registering Officer has to blindly register the said document. Such kind of
construction of Section 34 and Rule 55 would only defeat the very object of
the Act and the public interest. For example, if two persons enter into an
agreement thereby one party agrees to kill one "X" for the consideration to be
paid by the other and present the deed for registration, can it be said that the
Registering Officer is bound to register the said document?" If such
documents, which are patently void ab initio or illegal, are allowed to be
registered, then, such kind of interpretation of the Registration Act would not
serve the cause of justice. The Hon'ble Supreme Court in Kishan Chandar v.
Ganesh Prasad ( A.I.R. 1954 SC 316, =1954 SCR 919) has held "the
registration Act lays down the formalities and rules of procedure which must
be complied with before the document is presented for registration. It is the
duty of the Registrar to see proper compliance with the provisions of the Act
before the document is registered".
5. In the said backdrop, if the entire scheme of the Act and the rules are
analyzed, then it would make one to understand without any doubt, that the
Registering Officer either on enquiry or without an enquiry, should, besides
other things, prima facie be satisfied that the document is neither illegal nor
void and then to register the same provided the other requirements are
satisfied. If the document is ipso facto illegal or void, then, he is not obliged to
register the same and instead he should refuse to register the said document.
6. Section 17 of the Act deals with documents of which registration is
compulsory and Section 18 of the Act deals with the documents of which
registration is optional. Section 17(b) is relevant for our case, which reads as
follows:-
` "Section 17(b): other non-testamentary instruments which purport or
operate to create, declare, assign, limit or extinguish, whether in present or in
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future, any right, title or interest, whether vested or contingent, of the value of
one hundred rupees and upwards, to or in immovable property."
7. A plain reading of the above provision would disclose that all non
testamentary instruments declaring a right or title over immovable properties
worth Rs.100/-and upwards shall be registered. A deed of cancellation of a
sale falls within the purview of such an instrument declaring right and title for
an immovable property. If any such document canceling the sale is presented
for registration, since the same is compulsorily registrable under Section 17,
the Registering officer is obliged to register the same, provided the execution
of the said document is validly made by mutual consent of the parties and the
same is not illegal or void. To constitute a valid execution, it should be
executed by all parties to the earlier sale. Needless to say that unless, there is
a valid execution by competent persons; the Registering Officer has to
necessarily refuse to register the document. Thus, in a situation where the
document is either void or illegal or there is no valid execution, the registering
Officer is bound to refuse to register the same. De hors such a position, if the
Registering officer proceeds to register the said document, then the said
registration would be without jurisdiction and not valid.
8. Now, let me consider the scope of Section 32-A of the Act. Before the
introduction of Section 32-A of the Indian Registration Act, there were
complaints of impersonations. That would have been one of the reasons why
the parliament, in fitness of things, thought it fit to amend the Indian
Registration Act so as to introduce Section 32-A which provides that all such
deeds shall be signed by the seller as well as the purchaser and the same
shall also bear their finger prints and photographs.
9. This is undoubtedly a mandatory provision. Unless the requirements of
Section 32-A are complied with, the registering officer shall refuse to register
the document. The proviso added to Section 32-A of the act does not
specifically speak of a sale and instead, it speaks of any document relating to
transfer of ownership of immovable property. Thus, a document nullifying an
earlier sale of an immovable property would also fall within the scope of
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proviso to Section 32-A of the Act. while any cancellation of an agreement for
sale unilaterally by one party to the agreement, even in respect of cancellation
of a mere agreement for sale, while the same is presented for registration,
Section 32-A of the Act requires to be complied with.
" A reading of the above provision would clearly indicate that when the
document relates to the transfer of ownership of immovable property, the
passport size photograph and finger prints of each buyer and seller of such
property mentioned in the document, should be affixed to the document. In
the instant case, though the document in question is not one transferring the
ownership of immovable property, but only an agreement for sale entered into
between the buyer and the seller, this provision making the affixture of the
photographs and finger prints of both the buyer and the seller of the property
in the document, can also be extended to the same. This would equally apply
to a document for cancellation of an agreement for sale which is placed for
registration before the Sub Registry."
10. Therefore, if a deed of cancellation, unilaterally executed by one party
without the signature of the other party and without his photograph and finger
prints, is presented for registration, for non-compliance of Section 32-A of the
Act, the Registering officer should refuse to register the document.
11. . Now, turning to the judgment of the Full Bench of the Andhra Pradesh
High Court in Yanala Malleshwari and others Vs Ananthula Sayamma and
others ( 2006(6) A.L.T 523 = 2006(6) A.L.D 623 = AIR 2007 AP 57 ) His
Lordship Justice V.V.S.Rao, after having elaborately dealt with the identical
questions, has ultimately held in Para 66 as follows:-
"Therefore, when the provisions of the Registration Act and
Registration Rules elaborately deal with the circumstances and situations
when the registering officer has to accept and register the documents and / or
as to when registering officer has to reject the documents for registration, it is
not possible to hold as a general rule that whenever a cancellation deed is
submitted, the registering officer is bound to reject the acceptance and
registration of the same. Such interpretation would render Section 126 of TP
Act (which enables the donor of a gift to cancel / revoke the same) ineffective.
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Second, there could be unimaginable number of circumstances when the
executants himself on his own volition comes before the registering officer
and desires to cancel the earlier document. As already pointed out supra,
under Section 23-A of the Registration Act, the registering officer can re-
register a document totally ignoring the earlier registration. Further more,
under schedule 1-A to the Indian Stamp Act as amended by the Stamp (A.P
.Amendment) Act, 1922, cancellation deed is one of the legal documents
recognized in law and a transaction for transfer of immovable property is no
exception."
12 Though in Para 54 of the judgment, a reference has been made to
Section 32-A of the Indian Registration Act, which was recently introduced,
the learned Judge has not dealt with the same elaborately. Nobody can have
any quarrel over the legal position that a deed of cancellation of a sale of
immovable property of value Rs.100/-and upwards, is a document which
needs compulsory registration. But the learned Judge has taken the view that
to revoke a sale or to cancel the same, the consent or knowledge of the
purchaser is not at all required. In my considered opinion, as I have already
stated, a sale being a bilateral contract, more particularly in view of Section
32-A of the Indian Registration Act, if to be cancelled, it should be done
bilaterally by both the parties to the sale. The learned Judge has expressed
the apprehension that if the law is so interpreted so as to hold that the
Registering Officer has power to refuse to register a cancellation deed, then, it
would render Section 126 of the Transfer of Property Act, which enables the
donor of a gift to cancel it or revoke the same, ineffective. With respect, I am
of the view, that such apprehension has no basis. Section 126 of the Transfer
of Property Act is a special provision dealing with the power of the donor to
revoke a gift deed in certain circumstances. Such kind of revocation does not
require the consent of the beneficiary of the gift. Basically, such a gift is not a
contract in terms of the definition of contract as found in the Indian Contract
Act, since gift is a transfer made voluntarily without consideration, whereas, a
sale of an immovable property is a contract entered into between two parties
where consideration is a sine-qua -non. Therefore, revocation of a gift deed
cannot be equated to cancellation of a sale deed. Both operate on different
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spheres. A reference has also been made in the judgment to Section 23-A of
the Registration Act. In my considered opinion, Section 23-A which speaks of
re-registration of certain documents, has nothing to do with cancellation of a
validly executed document. It is not to say that invariably in all cases, the
registering officer should refuse to register a cancellation deed. We cannot
generalize all deeds of cancellation as illegal or void so as to say that such
documents cannot be registered at all. All I would say is that such cancellation
deeds which are executed bilaterally by both the parties to the earlier
document can be registered by the registering officer, provided, the other
requirements of the Indian Registration Act are satisfied. But those
cancellation deeds executed unilaterally by one party to the earlier
transaction, without the consent of the other party and without complying with
the requirements of Section 32-A of the Indian Registration Act, alone are to
be rejected by the Registering Officer.
13 In the minority judgment of His Lordship Justice Bilal Nazki in para 120,
the learned Judge has held as follows:-
" Lastly, it was contended by the respondents that under no provision
of law the Sub-Registrar is required to register a document after an enquiry as
to the ownership of the property with respect to which a document is sought to
be registered. It may be true that there is no such provision in the Registration
Act, but if strictly interpreted, and then the Registration Act would not
empower the registering authority to register any document unless it falls
within Section 17 or 18 of the Registration Act. Section 17 mentions those
documents which are compulsorily registrable and Section 18 mentions those
documents, of which, the registration is optional, but, the whole scheme of the
Registration Act shows that it is incumbent upon the Registrar not to register
documents that are unlawful. Obviously if a person has no right in the property
and his interests in the property had extinguished, if he tries to execute any
document for the same property, the document would be illegal...........
It is only on mere reading of the document that Sub-Registrar would
come to a conclusion that the document, which was sought to be registered,
was an illegal document and as such could not be registered. Therefore, the
argument of the learned counsel for respondents that the Sub-Registrar has
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no authority to make enquiries with regard to the title of the parties who
executes the documents would have to be accepted with exceptions. That
document has no title over the property; the Sub-Registrar is not bound to
register such a document. The Scheme of the Registration Act shows that
documents which create interest or extinguish interest are either compulsorily
registerable or are to be registered at the option of the executor. Besides this,
what is sought to be revoked by this cancellation deed, is the earlier
registered sale deed."
14 In Badugu Venkata Durga Rao v. Surneni Lakshmi (2001 (1) ALD 86, )
a learned Single Judge of the Andhra Pradesh High Court has also taken the
view that a person who has executed a sale deed and got it registered cannot
subsequently execute a document unilaterally canceling the earlier sale deed.
This view has been accepted by His Lordship Bilal Nazki in the minority
judgment.
15. In the case on hand, the cancellation deed was executed unilaterally by
the third respondent on the ground that consideration was not paid by the
petitioner. Admittedly, Section 32-A of the Act also has not been complied
with. Above all, cancellation was made on the ground of non payment of
consideration by the petitioner. All the reported decisions are to the effect that
such a sale is a completed transaction notwithstanding that the price agreed
upon at the time of execution has never been paid.(vide. A Division Bench
Judgement of Madras High court in Govindammal vs.Gopalachariar, reported
in 1906 vol.XVI MLJ, page 524). On presentation of the said document, the
first respondent ought to have refused to register the same. Thus, the
registration of the said document is without jurisdiction and therefore, the
same is liable to be set aside.
16. The view taken by me herein, thus, draws full support from the minority
judgment in Yanala Malleshwari and others v. Ananthula Sayamma(2006(6)
A.L.T 523 = 2006(6) A.L.D 623= AIR 2007 AP 57) and others and the
learned Single Judge of the Andhra Pradesh High Court in Badugu Venkata
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Durga Rao v. Surneni Lakshmi 2001 (1) ALD 86;= 2001 (1) A.L.T 115 ( Case
of Coercion )
17. After the Full Bench judgment of the Andhra Pradesh High Court in
Yanala Malleshwari and others v. Ananthula Sayamma and others case, the
Andhra Pradesh Government introduced Rule 26-(k) of the Andhra Pradesh
Registration Rules by means of an amendment dated 29.11.2006, which
reads as follows:-
(i) The Registering Officer shall ensure at the time of presentation for
registration of cancellation deeds of previously registered deed of conveyance
on sale before him that such cancellation deeds are executed by all executant
and claimant parties to the previously registered conveyance on sale and that
such cancellation deed is accompanied by a declaration showing mutual
consent or orders of a competent Civil or High Court of State or Central
Government annulling the transaction contained the previously registered
deed of conveyance on sale;
Provided that the registering officer shall dispense with the execution of
cancellation deeds by executant and claimant parties to the previously
registered deeds of conveyances on sale before him if the cancellation deed
is executed by a Civil Judge or a Government Officer competent to execute
Government orders declaring the properties contained in the previously
registered conveyance on sale to be Government or Assigned or Endowment
lands or properties not registrable by any provision of law.
(ii) Save in the manner provided for above, no cancellation deed of a
previously registered deed of conveyance on sale before him shall be
accepted for presentation for registration.
The said rule 26 (k) was challenged before the Andhra Pradesh High Court in
Kaitha Narasimha v. The State Government of A.P., rep. By its Principal
Secretary,(W.P.No.3744/2007) by contending that the same is ultra vires of
the provisions of the Registration Act, 1908 and is contrary to the judgment of
the Full Bench in Yanala Malleshwari and others v. Ananthula Sayamma and
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others. The Division Bench of the Andhra Pradesh High Court, by order dated
13.3.2007., while upholding the said Rule has held as follows:-
" In our opinion, the impugned rule does not in any manner violate the ratio of
the majority judgment of the Full Bench. Rather, as mentioned above, it is a
statutory embodiment of one of the rules of natural justice and is intended to
curtail unnecessary litigation emanating from the exparte registration of
cancellation deeds."
18. As indicated in the above judgment, the principles of natural justice are
also to be adhered to by the Registering Officer while dealing with a deed of
cancellation of sale. If a unilateral cancellation deed is allowed to be
registered, without the knowledge and consent of the other party to the earlier
contract, as held by the Division Bench of the Andhra Pradesh High Court,
such registration would cause violence to the principles of natural justice and
lead to unnecessary litigations emanating
19. Now, it is time to have a glance through the judgment of the Hon'ble
Supreme Court in State of Rajasthan v. Basanth Nahata (A.I.R. 2005 SC
3401, 2005(3 )Suppl.SCR1 , 2005(12 )SCC77 , 2005(7 )SCALE164 , 2005(8
)JT171, 2005 AIR SCW 4456.) this judgment most part refers about GPA) wherein the
constitutionality of Section 22-A of the Registration Act as amended by the
State of Rajasthan and also the notifications issued by it in terms thereof were
tested. Section 22-A as it stood introduced is as follows:-
" Section 22-A. Documents registration of which is opposed to public policy:-
(1) The State Government may, by notification in the Tamil Nadu Government
Gazette, declare that the registration of any document or class of documents
is opposed to public policy.
(2) notwithstanding anything contained in this Act, the registering officer shall
refuse to register any document to which a notification issued under sub-
section (1) is applicable."
19. While striking down Section 22-A of the Act, the Hon'ble Supreme
Court has held " the necessity of the legislature�s delegating its powers in
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favour of the executive is a part of legislative function. It is a constituent
element of the legislative power as a whole under Article 245 of the
Constitution. Such delegation of power, however, cannot be wide,
uncanalised or unguided. The legislature while delegating such power is
required to lay down the criteria or standard so as to enable the delegatee to
act within the framework of the statute. A subordinate legislation which is not
backed up by any statutory guideline under the substantive law and opposed
to the enforcement of a legal right, would not be valid. The principle on which
the power of the legislature is to be exercised is required to be disclosed. It is
also trite that essential legislative functions cannot be delegated. The
procedural powers are, therefore, normally left to be exercised by the
executive by reason of a delegated legislation..........."
"The executive while making a subordinate legislation cannot be permitted to
open new heads of public policy in its whims . The provisions of the Act,
therefore, do not lay down any guidelines to render it constitutional. The
notifications issued by the State of Rajasthan themselves show that the
uncertain position to which the parties to a transaction evidenced by a deed or
a document can be put to. Despite the words of caution that the Court's duty
is to expound the law and not expand, new heads of illegality of contract being
opposed to public policy have been found out and in any event, there exists
such a possibility........"
"The legislature of a State may lay down as to which acts would be immoral
being injurious to the society. Such a legislation being substantive in nature
must receive the legislative sanction specifically and not through a
subordinate legislation or executive instructions. The phraseology "opposed to
public policy" may embrace within its fold such acts which are likely to
deprave, corrupt or injurious to the public morality and, thus, essentially
should be a matter of legislative policy."
20. The State of Tamil Nadu also introduced a similar provision viz.,
Section 22-A. Based on the decision of the Hon'ble Supreme Court in the
above judgment, a Division Bench of this Court in the case of
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B.Purushuothaman (Died), P.Indhurani and Pratheep Kumar (Minor) rep. By
his mother andnatural guardian,P.Indhurani VS K.Chandran, The Inspector
General of Registration, The Joint Sub Registrar-I and the Tahsildar in
W.P.Nos.757 and 758 of 2007, struck down the said Tamil Nadu State
amendment. The Government of Tamil Nadu had in exercise of power under
Sec.22A, issued G.O.Ms.No.150, Commercial Tax Department dated
22.09.2000, which was also struck down.
The suggestion:
After the above developments, the State of Tamil Nadu, obviously, has
not considered the situation prevailing in the State necessitating introduction
of an appropriate provision in the Act or in the Rules itself so as to prevent
registration of documents which are opposed to public policy. As we have
noticed, the Andhra Pradesh Government has duly introduced Rule 26(k) of
the Andhra Pradesh Registration Rules making it mandatory for the
Registering Officer, not to register a deed of cancellation of a sale deed, if it is
not executed mutually by the parties to the earlier sale deed. If it is the
intention of the Government of Tamil Nadu, not to allow registration of certain
kinds of deeds such as deeds of cancellation of sale, executed unilaterally,
even now, it is left open to the Government of Tamil Nadu to bring an
appropriate amendment to the Registration Act or to the Rules as has been
done in Andhra Pradesh in tune with the law declared by the Hon'ble
Supreme Court in State of Rajasthan v. Basanth Nahata by making it
mandatory for the Registering officers to refuse to register certain documents
which are opposed to public policy by succinctly defining the documents in the
statute itself without delegating the power to define the same to the Executive.
This court is hopeful, that the Government will take serious note of the
situation prevailing in the State and fall in line with Andhra Pradesh Rules.
21. However , recent judgment of Andhra Pradesh High Court has given
clear finding that unilateral cancellation is void and against the public policy
in case Haji Mohammed Ahmed Vs State of Andhra Pradesh ( 2012(2) A.L.D
230 ) ” Unilateral cancellation by executants of cancellation deed, with out
notice to petitioner/donee is declared void on being illegal, If infirmity is found
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the executant can invoke the jurisdiction of competent civil court for
cancellation of deeds . The Rule 26(i) (k) stipulates that if any Registered Gift
deed cancelled with out notice to donee is illegal.
22. The Supreme Court took different stand quite contrary to Full Bench
Judgment in case Yanala Malleshwari and others v. Ananthula
Sayamma(2006(6) A.L.T 523 = 2006(6) A.L.D 623= AIR 2007 AP 57) and
impliedly overrule in case Thota Ganga Laskhmi and another Vs
Government of Andhra Pradesh (2012 (1) A.L.D 90 (SC) “ Sale deed
registered subsequent cancellation deed and registration thereof is void and
non est and can be ignored. In the sense subsequent cancellation sale deed
already registered under provision of Registration Act has no legal entity and
it require no further declaration suit annulling the cancellation deed is illegal.
The apex Court is very clear about cancellation of sale deed or Gift deed what
ever deed subsequently carries now with in the eye of law by invoking Rule
26(i) (k) of AP Rules of Registration as well as Sec 69 of Registration Act .
The glimpse of Rule 26(i) (k) follows:- “ The registered authority office shall
ensure at the time of preparation for registration of cancellation deeds of
previously registered deed of conveyance on sale before him that such
cancellation deed is accompanied by a declaration showing natural consent or
orders of a competent civil or High Court or state or Central Govt annulling the
transaction contained in the previously registered contained in the previously
registered deed of conveyance.” Provided that the registration office shall
dispense with execution of cancellation deeds by expectance and claimant
parties to the previously registered deed of conveyance on sale before him if
the cancellation deed is executed by Civil Judge or Government Authority.
22. The above decisions rendered various High Courts though contrarily
views expressed invoking Sec 32-A and 23-A and Rules 26(k) AP Rules
26(i)(k) finally concluded that Unilateral Cancellation of Registered deed is
illegal and ignored. Hence it need no necessary to invoke jurisdiction of Civil
Court under Sec 31,for cancellation of Instruments and Sec 34 declaration of
such cancellation deeds null and void under Specific relief Act,
Dr No 44-1-3, Jampeta, Rajahmundry. Ph 9491629554,
advkvssprabhakar@gmail.com.