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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

2 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

3 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

4 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

5 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 His

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 ) 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. Lordship Justice V.V.S.Rao, after having elaborately dealt with the identical

6 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 reregister 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

7 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, " 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

the learned Judge has held as follows:-

8 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 and others and the

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) learned Single Judge of the Andhra Pradesh High Court in Badugu Venkata

9 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

10 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 subsection (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

11 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

12 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

13 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 in case Yanala Malleshwari and others v. Ananthula and Judgment

Sayamma(2006(6) A.L.T 523 = 2006(6) A.L.D 623= AIR 2007 AP 57) impliedly overrule in case Government of Andhra Pradesh (2012 (1) A.L.D 90 (SC)

Thota Ganga Laskhmi and another Vs 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.