Section : 3 Interpretation clause

In this Act, unless there is something repugnant in the subject or context,-

" Immovable property" does not include standing timber, growing crops or grass;

"Instrument" means a non-testamentary instrument;

"Attested", in relation to an instrument, means and shall be deemed always to have meant
attested by two or more witnesses each of whom has seen the executant sign or affix his mark to
the instrument, or has seen some other person sign the instrument in the presence and by the
direction of the executant, or has received from the executant a personal acknowledgement of his
signature or mark, or of the signature of such other person, and each of whom has signed the
instrument in the presence of the executant; but it shall not be necessary that more than one of
such witnesses shall have been present at the same time, and no particular form of attestation
shall be necessary;

"Registered" means registered in any part of the territories to which this Act extends under the
law for the time being in force regulating the registration of documents;

" Attached to the earth" means-

(a) rooted in the earth, as in the case of trees and shrubs;

(b) imbedded in the earth, as in the case of walls or buildings; or

(c) attached to what is so embedded for the permanent beneficial enjoyment of that to
which it is attached;

"Actionable claim" means a claim to any debt, other than a debt secured by mortgage of
immovable property or by hypothecation or pledge of movable property, or to any beneficial
interest in movable property not in the possession, either actual or constructive, of the claimant,
which the civil courts recognize as affording grounds for relief, whether such debt or beneficial
interest be existent, accruing, conditional or contingent;
"a person is said to have notice" of a fact when he actually knows that fact, or when, but for
willful abstention from an enquiry or search which he ought to have made, or gross negligence,
he would have known it.

Explanation I: Where any transaction relating to immovable property is required by law to be

and has been effected by a registered instrument, any person acquiring such property or any part
of, or share or interest in, such property shall be deemed to have notice of such instrument as
from the date of registration or, where the property is not all situated in one sub-district, or where
the registered instrument has been registered under sub-section (2) of section 30 of the Indian
Registration Act, 1908 (16 of 1908), from the earliest date on which any memorandum of such
registered instrument has been filed by any Sub-Registrar within whose sub-district any part of
the property which is being acquired, or of the property wherein a share or interest is being
acquired, is situated:

PROVIDED that-

(1) the instrument has been registered and its registration completed in the manner prescribed by
the Indian Registration Act, 1908 (16 of 1908), and the rules made thereunder,

(2) the instrument of memorandum has been duly entered or filed, as the case may be, in books
kept under section 51 of that Act, and

(3) the particulars regarding the transaction to which the instrument relates have been correctly
entered in the indexes kept under section 55 of that Act.

Explanation II : Any person acquiring any immovable property or any share or interest in any
such property shall be deemed to have notice of the title, if any, of any person who is for the time
being in actual possession thereof.

Explanation III: A person shall be deemed to have had notice of any fact if his agent acquires
notice thereof whilst acting on his behalf in the course of business to which that fact is material:

PROVIDED that, if the agent fraudulently conceals the fact, the principal shall not be charged
with notice thereof as against any person who was a party to or otherwise cognizant of the fraud.
 Comment :

 Immovable property" does not include standing timber, growing crops or grass;
 Instrument
 Attested
 Registered
 Attached to the earth

 Actionable claim

(i) Immovable property" does not include standing timber, growing crops or grass;

(ii) Instrument—"lt means a non- testamentary instrument."

According to this definition all instruments are instrument except the testamentary one.

(ii) Attested-11 n relation to an instrument, attested means and shall be deemed always to
have meant attested by two or more witnesses each of whom has seen the executant sign or affix
his mark to the instrument, or has seen some other person sign the instrument in the presence and
by the direction of the executant, or has received from the executant a personal
acknowledgement of his signature or mark or of the signature of such other person and each of
whom has signed the instrument in the presence of the executant, but it shall not be necessary
that more than one of such witnesses shall have been present at the same time, and no particular
form of attestation shall be necessary." [Sec. 3]

The term attested in this section means that a person has signed the document by way of
testimony of the fact that he saw it executed. A person who is a party to the instrument can not
under any circumstances be allowed to sign the instrument as an attesting witness. Any other
person who is not a party of a deed may attest the document although he is a person interested in
the transaction. [AIR 1965 SC 1738]

Requisites of a valid attestation—The following are the essentials of a valid attestation—

(t) There must be two or more witnesses in all cases where a document is required by the Act to
be attested.

(ii) Each witness must--

(a) see that executant sign or affix his mark, or

(b) see some other person sign the instrument in the presence and under the direction of the
executant. or

(c) receive from the executant a personal acknowledgement of his signature or mark or of the
signature of such other person. (iii) Each witness must sign the instrument in the presence of the
executant.

Legal effect of attestation—Mere attestation of a document does not show that the attestor had
notice of its contents. It estops him from denying the jacium of execution. When the contents
were read ovcr to the attestor, it may estop him from challenging the right of the transferee or
denying the authority of the executant to execute the document [1928 P. C. 20]

In Abdul Jabbar vs Venkat Sitastri & Sons, AIR 1969. S. C. 1147 it was held that the Sub-
Registrar puts the signature in course of his duties as laid down in Registration Act. Therefore, a
registering officer as well as a scriber or identifier may not be competent to attest.

If a document is not validly attested, as required by this section, it is ineffective. For example
under sec. 59, if the mortgage deed is not validly attested, it can not be enforced in the Court and
it will fail also to operate as a charge but though the deed may be ineffectual as a mortgage for
want of proper attestation, still it will be admissible as evidence of a personal covenant to repay
the debt. I Venkata vs Venkata Kuntar, AIR 1931. Mad. 140]

Signature of the attesting witness on a document is a requirement of the statute. It cannot be

equated with that of the scribe.'

(ili) Registered—"It means registered in any part of the territories to which this Act extends
under the law for the time being in force regulating the registration of documents." (Sec. 3]
A document can not be said to have been duly registered if the registration has been made in
contravention of the provisions of the Registration Act e. g.

K. Kamalam vs Ayyasami. AIR 2001 SC 2802

(Iv) Actionable claim—"It means a claim to any debt, other than a debt secured by mortgage of
immovable property or by hypothecation or pledge of I movable property or to any beneficial
interest in movable property not in the possession, either actual or constructive of the claimant,
which the Civil Courts recognise, as affording grounds for relief whether such debt or beneficial
inter¬est be existent, accruing, conditional or contingent."

Example

(I) A owes Rs. 5,000 toll B's claim is an actionable claim.

(2) A borrows Rs. 500 from B and mortgages his house to him. The mortgage debt is not an
actionable claim.

(3) A contracts 'a buy goods from 8. On the due date, A fails to take delivery and B sells the
goods in the open market at the loss of Rs. 1,000. B has a right to claim the damages from A but
this claim is not actionable claim.

Some instances of actionable claim—

(a) Claim for arrears of rent.

(b) Claim of benefit arising out ofa contract for the purchase of goods.

(c) A share in partnership.

(d) A claim to money due under an insurance policy.

(e) A right to the proceeds of business.

(g) A right to receive money for licence given to another to remove back from the licensor's trees
is transferable.

(h) Usufructuary mortgagee's liability to pay to the mortgagor the bal¬ance left after paying the
mortgagor's creditors.

(g) Both ordinary and endowment life policies.

(j) Provident fund amount payable after retirement and not presently. The following also have
been held actionable claim-

(i) A decree.

(ii) The right to recover damages for breach of contract.

(iii) A claim to mesne profits.

(iv) A copyright.

(v) A right to recover profits from a co-sharer.

(vi) A debt secured by mortgage of immovable property or hypothecation of movable

property.

. When does registration amount to notice ?

Ans. Registration when amounts to notice—Explanation I of Section 3 of the Act about notice
provides that—

"Where any transaction relating to immovable property is required by law to be and has been
effected by a registered instnunent, any person acquir¬ing such property or any part of or share
or interest in such property shall be deemed to have notice of such instrument as from the date of
registration or, where the property is not all situated in one sub-district or where the registered
instrument has been registered under Sub-section (2) of Section 30 of the Indian Registration
Act, 1908 from the earliest date on which any memorandum of such registered instrument has
been filed by any Sub-registrar within whose sub-district any part of the property which is being
acquired or of the property wherein a share or interest is being acquired, is situated."
Provided that :

(1) The instrument has been registered and its registration was com¬pleted in the manner
prescribed by the Indian Registration Act.

(2) The instnunent or memorandum has been duly entered or filed, as the case may be, in
books kept under the Act.

(3) The particulars regarding the transaction to which the instrument relates have been
correctly entered in the index kept tinder the Act.

Thus registration of a document operates as a notice of the contents in the document in the
following circumstances—

(1) The instrument should be compulsorily registerablc. If it is not re¬quired by law to be

registered then its registration does not amount to notice.

The instrument should he registered in the manner prescribed by the Indian Registration Act.

(2) It should be entered into the books kept under the provisions of the Registration Act.

(3) Its particulars must be correctly entered in the index maintained and kept tinder the Act
as above.

(4) The person affected with notice should have acquired his interest subsequent to the
registration. By registration of document notice can not be imputed to prior transaction.

Explain the term notice and its kinds.

Notice—The last paragraph of section 3 states tinder what circum¬stances a person is said to
have notice of a fact.

He may himself have actual notice or he may have constructive notice, when information of the
fact has been obtained by his agent in the course of the business transacted by the agent for him.

(1) Express or actual notice—An express or actual notice ofa fact is a notice whereby a
person acquires actual knowledge of the fact. It must be definite information given by a
 person interested in the thing. A person is not bound to attend to vague rumours or
statements by mere strangers. [Ashiq vs Chaturbhaj, AIR 1928 All. 159]-
In other words, the party imputing notice must show that the other party has knowledge
which would operate upon the mind ofa rational person, or man of business and make
him act with reference to the knowledge he has so acquired,--Loan CAIRN, L. C. in
liasadlls Bank.

(ii) Constructive Notice— It is a notice which treats a person, who ought to have known a fact,
as if he actually does know it. A person is said to have constructive notice of all facts of which
he would have acquired actual notice had he made those inquiries which he ought reasonably to
have made.

Constructive notice has roughly been defined as knowledge which the Court regards to a person
upon a presumption as strong that it cannot be allowed to be rebutted that the knowledge must
have been obtained.

This legal presumption arises as under--

I. Wilful abstention from enquiry

2. Gross negligence

3. Actual possession

4. Notice to agent

1. Wilful abstention---The words abstention' are said to be such abstention from inquiry or search
as would ShoW Want of bdimfides ht respect of a particular transaction, for example--

(i) A re fuses'a registered letter, which contains certain Information relat¬ing to property
which .4 proposes to purchase. et wilt be deemed to have notice of the contents of the letter.
[1901 Cal., W. M-1341

(ii) A mortgages his house to B who omits to investigate the title deeds relating to the house.
C has a charge on the property mortgage& B will be presumed to have notice of the charge.
2. Cross negligence—Gross Negligence may be seated into something which a reasonable roan,
guided by those considerations which ordinarily regulate the conduct of human affairs.

( Ranjita Lat vs .A4unicipal Board- Luclnow, 1936.•) it was held that any person purchasing
property within the municipal limits WaS bound to inquire whether any.niunicip.al taxes in
respect of that premerty arc in arrears: If he failed to do so, it would amount to gross negligence
and it would be deemed that the person had a constructive notice

3. Registration:

Registration operates as notice in the follow in cases—

(a) The instrument should be compulsorily registerabic fi it IS 01 re¬quired by law to be

registered. its registration does not arrmunt to notice

(b) The instrument should be registered in the manner prescribed by the Indian Registration
Act, 1908. It should be entered into the books kept-Oder Sec. 51 of the Act and its particulars
correctly entered in the indices under See. 55.

(c) The person affected with notice should have "noised his Mterest subsequent to the
registration. The registration of a sub-more:see eises net amount to notice to the mortgagor
11932 Mad. 11562 W./2721
State how far actual possession is notice of title.

. Actual possession to be notice—Formerly it was not clear how far possession was to be
regarded as notice. In some cases it was held that possession amounts to such notice of title as
the person in possession might have.

In other cases, Courts felt difficulty in expressing any opinion on the point. By the new
Amendment it is laid down that any person acquiring any immovable property or any share or
interest in any such property shall be deemed to have notice of the title, if any, of any person
who is for the time being in actual possession thereof.'

Possession which operates as notice, however, must be actual possession. does not seem
reasonable that a person entering into a transaction regarding immovable property should be in a
position to enquire into the nature of the possession or the title of the person who is in actual
possession of such property, if he is not the person with whom he is dealing".

Accordingly it is provided that the person dealing with any immovable property is to be deemed
to have notice of the title of any person who, for the time being, is in actual possession thereof. It
may he noted that notice in this case is not extended to possession which is merely of a
constructive nature.

Illustration

A contracts to sell land to B for Rs. 5000. 13 takes possession of the land. Afterwards A sells it
to C for Rs. 6,000 C makes no enquiry of B relating to his interest in the land. B's possession is
sufficient to affect C with notice of his interest, and he may enforce specific performance of the
contract against C.