E.R. Kalaivan v. Inspector General Of Regn.

1. Writ Appeal is against the order of the learned Single Judge of this Court made in W.P No. 36093 of 2007 dated 19.2.2009

2. This Writ Appeal raises an important question as to whether the Registrar, who is empowered to register the documents under the Indian Registration Act, could register a document unilaterally executed by the vendor cancelling the earlier sale made.

3. The facts leading to the above issue arise on the following circumstances:

By a registered Document No. 81 of 2001 dated 5.2.2001 on the file of the Sub-Registrar, Kalaiyarkoil, the appellant sold an extent of 0.90 cents to one Kannathal, Wife of (late) Ramasamy Konar of Aralikottai Village. Subsequently, the appellant approached the Sub-Registrar for registration of a deed of cancellation dated 6.1.2006 on the ground the sale deed is not supported by consideration. It appears that the Registrar was reluctant to entertain such a document and refused to register the same apparently on the ground that the cancellation deed was sought to be registered without there being a consent from the purchaser. Hence, the appellant approached the Inspector General of Registration. The Inspector General of Registration issued a Circular dated 5.10.2007, whereby all Deputy Inspector Generals of Registration, District Registrars and all Sub-Registrars were directed that the deed of cancellation should bear the signatures of both the vendor and the purchaser. This circular came to be challenged before this Court and by the impugned order, the Writ Petition was dismissed. Hence, the present Writ Appeal.

4. We have heard Mr. K. Bijai Sundar, learned counsel for the appellant and Mr. J. Raja Kalifullah, learned Government Pleader for the respondents.

5. Mr. K. Bijai Sundar, learned counsel appearing for the appellant has submitted that in the absence of any provision, the Registrar cannot refuse to register a deed even in case of a deed of cancellation. In this regard, he would submit that the State has inserted the provisions of Section 22-A to the Registration Act by the Registration (Tamil Nadu Amendment) Act, 1994 (for short, “the Act”). By that provision, the Registrar was restrained from registering a cancellation deed in the absence of both the parties to the document. He would submit that the said provision was questioned before a Division Bench of this Court in the judgment in Captain Dr. R. Bellie v. Sub-Registrar, 2007 (3) CTC 513: 2007 (3) MLJ 1025, and the said provision was struck down on the ground that the State Legislature had not laid down any guidelines defining “public policy” or documents which are “as opposed to public policy.” He would also submit that the G.O.Ms No. 150, Commercial Taxes Department, dated 22.9.2000 issued pursuant to the amended provisions of Section 22-A was also set aside.

6. He would also rely upon the subsequent G.O.Ms No. 139, Commercial Taxes and Registration (J1) Department, dated 25.7.2007 issued pursuant to the order of the Division Bench in Captain Dr. R. Bellie's case (supra). Placing reliance on the above judgment as well as the notification, he would submit that the cancellation of sale deed without express consent of parties to the document is one of the categories referred to in the Government Order dated 22.9.2000 Hence, when this Court in Captain Dr. R. Bellie's case declared the amended provision of Section 22-A of the Act as null and void and the consequential Government Order dated 22.9.2000 came to be set aside, the Registrar cannot refuse to register a deed of cancellation of sale deed on the ground that no consent of purchaser was obtained and that too, in the absence of any specific provision for the insistence of consent from the purchaser. He would also submit that inasmuch as the said Division Bench judgment was rendered following the judgment of the Supreme Court in State of Rajasthan v. Basant Nahata, 2005 (4) CTC 606, and a similar order of the Division Bench made in Writ Appeal No. 1923 of 2005 dated 16.11.2005 dismissing the Appeal preferred by the State on the very same issue, the appellant must succeed and the appellant should be declared to be entitled to present the document of cancellation of sale deed for registration.

7. On the other hand, Mr. J. Raja Kalifullah, learned Government Pleader would submit that a similar question came up for consideration before this Court in Writ Appeal No. 194 of 2009 and by judgment dated 1.4.2009, this Court held that such a registration of cancellation deed cannot be entertained in the absence of the signature of the purchaser and in that view, the deed of cancellation was set aside by the Division Bench. He would also rely upon the subsequent Division Bench judgment dated 23.6.2009 in Writ Appeal No. 789 of 2009 taking the same view. He would further submit that in fact an amendment was made by inserting Section 34-A to the Act and by that amendment, no document for sale of the property shall be registered, unless the person claiming under the document shall also sign in such document. He would submit that though the amended provision of Section 22-A of the Act was struck down and the circular issued in terms of the said amendment was also set aside by this Court, in the absence of any provision empowering the Registrar to entertain such a document for cancellation, there is nothing wrong in the Inspector General of Registration issuing a circular making it compulsory for both the vendor and the purchaser to sign the document. He would also submit that by the circular dated 5.10.2007, the Inspector General of Registration has directed that whenever cancellation of sale deeds are sought to be registered and only the vendor signs the document, without the signature of the purchaser, entertaining such a document is not a proper procedure for registration. That Circular was issued in terms of Section 34-A of the Registration Act.

8. We have given our anxious thought to the rival contentions. In State of Rajasthan v. Basant Nahata, 2005 (4) CTC 606, the Supreme Court, of course, on a challenge to the amended provision of Section 22-A by the State of Rajasthan, had struck down the said provision on the ground that the word “public policy” was not defined and the essential function of the legislature to decide what is public policy cannot be delegated to the executive through subordinate legislation. In fact, a similar amended provision of Section 22-A by the State of Tamil Nadu was considered by a Division Bench in Captain Dr. R. Bellie's case and on the same reason, the said Section was also struck down.

9. From the above judgments, all that we could read and understand is that in the absence of any guidelines defining what is “public policy” or documents which are “as opposed to public policy”, the Courts had to declare Section 22-A is null and void. In our opinion, a reading of those judgments does not indicate that by the judgments it is also directed that a registration of a cancellation deed is permissible even in the absence of both the parties before the Registrar. The question as to whether such documents can be entertained should be considered in the light of the other provisions of the Act as well.

10. We may little bit elaborate on this. The Government of Tamil Nadu inserted Section 22-A to the Registration Act empowering the State Government by notification in the Tamil Nadu Government Gazette to declare the registration of any document or class of documents is opposed to public policy. In exercise of the said power, the Government issued G.O.Ms No. 150, Commercial Taxes Department, dated 22.9.2000, which needs the full extraction and is as follows:

“In exercise of the powers conferred by sub-section (1) of Section 22-A of the Registration Act, 1908 (Central Act 46 of 1908), the Governor of Tamil Nadu hereby declares the following documents as opposed to public policy, namely,—

(1) Any instrument relating to:

(i) connveyance of properties belonging to the Government or the local bodies such as the Chennai Metropolitan Development Authority or Corporations, or Municipalities, or Town Panchayats or Panchayat Unions, or Village Panchayats; or

(ii) conveyance of properties belonging to any religious institution including temples, mutts or specific endowments managed by Hereditary Trustees/Non-Hereditary Trustees appointed to any religious institutions under a Scheme settled or deemed to have been settled under the provisions of the Tamil Nadu Hindu Religious and Charitable Endowments Act, 1959 (Tamil Nadu Act 22 of 1959) and mutts and temples including specific endowments attached to such of those temples managed by mutts; or

(iii) conveyance of properties assigned to or held by—

(a) the Tamil Nadu State Bhoodan Yagna Board established under Section 3 of the Tamil Nadu Bhoodan Yagna Act, 1958 (Tamil Nadu Act 15 of 1958); or

(b) the Tamil Nadu Wakf Board.

Unless a sealed No Objection Certificate is issued by the competent authority as provided under the relevant Act or the rules framed thereunder for this purpose and in the absence of any such provisions in any relevant Act or the rules framed thereunder authority authorised by the Government to the effect that such registration is not in contravention of the provisions of the respective Act is produced before the Registering Officer.

(2) Conveyance of lands converted as house sites without the approved layouts unless a No Objection Certificate issued by the authority concerned of such local bodies namely, Corporation or Municipalities or Town Panchayats, Pachayat Unions, or Village Panchayats, or Chennai Metropolitan Development Authority is produced before the registering officer.

(3) Cancellation of sale deed without the express consent of the parties to the documents.”

11. Section 17 of the Act deals with documents where registration is compulsory and Section 18 deals with the documents where registration is optional. A reading of Section 17(b) shows that a deed of cancellation of sale falls within the purview of that Section, since such document declares no right and title of immovable property. As the said document is compulsorily registrable, some restrictions must be applied for cancellation of such document as well.

12. In this content, we may also refer to Section 32-A of the Indian Registration Act providing that all such deeds shall be signed by the vendor as well as the purchaser and the same shall also bear the finger prints and photographs. Section 34 of the Act also needs a reference, whereby the Registering Authority is mandated to hold an enquiry in respect of the validity of the document presented for registration. Having regard to the above provisions, in our opinion, a registered sale deed, if sought to be cancelled, registration of such deed must be at the instance of both the parties viz., bilaterally and not unilaterally. Section 34-A of the Act, whereby the Registering Authority is to enquire whether or not such document was executed by the persons by whom it purports to have been executed. A sale is essentially an executed contract between two parties on mutal agreed conditions. Question is as to whether such contract can be unilaterally rescinded, particularly, in a case of sale deed. In this context, we may refer to Section 62 of the Indian Contract Act, 1872 which provides that contract which need not be performed. By that provision, any novation, rescission and alteration of a contract can be made only bilaterally. A deed of cancellation will amount to rescission of contract and if the issue in question is viewed from the application of Section 62 of the Indian Contract Act, any rescission must be only bilaterally. See City Bank N.A v. Standard Chartered Bank and others, 2004 (2) CTC 374 (SC): 2004 (1) SCC 12.

13. Much reliance was placed to the Full Bench judgment of Andhra Pradesh High Court in Yanala Malleshwari and others v. Ananthula Sayamma and others, 2007 (1) CTC 97 (F.B) (A.P), wherein it was held that the cancellation of agreement of sale unilaterally by one party to the agreement is valid. Pursuant to the judgment, the Government of Andhra Pradesh introduced Rule 26(k) to 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 accompanies by a declaration showing mutual consent or orders of a competent Civil or High Court of State or Central Government annulling the transaction contained in 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 conveyance on sale before him if the cancellation deed is executed by a Civil Judges 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 of registration.”

14. The said Rule 26(k) was challenged before the Andhra Pradesh High Court in Kalitha 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 case. 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 curtain unnecessary litigation emanating from the ex parte registration of cancellation deeds.”

15. 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 litigation emanating therefrom.

16. By the said Rule 26(k)(ii), it was directed that no cancellation deed of a previously registered deed of conveyance on sale before him shall be accepted for presentation for registration.

17. That Rule was questioned before the Andhra Pradesh High Court in the case of Kalitha Narasimha v. The State Government of A.P, in W.P No. 3744 of 2007, and on the ground that the amendment was contrary to the judgment of the Full Bench in the case of Yanala Malleshwari and others v. Ananthula Sayamma and others, 2007 (1) CTC 97 (F.B) (A.P). By order dated 13.3.2007, the Division Bench of Andhra Pradesh High Court had upheld the said Rule and as on today, the Rule that prevails in Andhra Pradesh is that the cancellation deed of previously registered deed of conveyance on sale cannot be accepted for presentation by the Registrar unilaterally.

18. In this context, we may also usefully refer to the judgment of a learned single Judge of this Court in G.D. Subramaniam v. Sub-Registrar, Office Of Konur Sub-Registrar, Konur, 2009 (1) CTC 709: 2009 CIJ 243 Madras. The learned Judge has extensively considered the scope of registration of cancellation of sale deed and had ultimately held that such unilateral cancellation of deed cannot be made in the absence of any specific provision for the Registrar to do so. We are entirely in agreement with the said view taken by the learned Single Judge.

19. That apart, on the facts of this case, our attention is not drawn to any of the specific provision under the Registration Act empowering the Registrar to entertain a document of cancellation for registration on the ground that the sale consideration was not paid and consequently, received by the vendor. Further, in our opinion, when the Registrar satisfies himself on the perusal of the document, wherein it is stated that the full sale consideration is received and on such satisfaction, entertain the document for registration, cannot thereafter be conferred with a power for cancellation of the deed on the ground that the full sale consideration was not paid and received by the vendor. Conferring such power on the Registrar would tantamount to conferring a power to decide the disputed questions. That apart, as already stated, in the absence of any provision specifically empowering the Registrar to entertain a document of cancellation for registration, without the signature of both the vendor and the purchaser, the deed cannot be entertained. For the said reason, we find no infirmity in the impugned Circular issued by the Inspector General of Registration.

20. There is one more aspect. A person, who claims that the sale consideration has not been paid, as some undertaking was given at the time of registration, is not without any remedy. A provision of cancellation of such deed of registration is also available to enable such of those vendors to approach the Civil Court and redress their grievance. In this context, the judgments of the Supreme Court as well as the Division Bench of this Court are not of any assistance to the appellant on the facts of this case as, particularly, in those two cases, the prime consideration was whether a document which is opposed to public policy could be registered or not. Merely because the words “cancellation deed” was also incorporated in the Government Order dated 22.9.2000, which was subsequently set aside by the Division Bench, that would not give a right for a vendor to present the document of cancellation of the sale deed for registration without reference to the purchaser. If such a situation is allowed, it would certainly put the purchaser in trouble. Further, the Division Bench of this Court in Writ Appeal No. 194 of 2009, by judgment dated 1.4.2009, had in fact set aside such a document of cancellation which was registered. The said judgment of the Division Bench was subsequently followed by another Division Bench in Writ Appeal No. 789 of 2009 dated 23.6.2009 We are entirely in agreement with those Division Bench judgments and for all the reasons recorded in this judgment, we are not inclined to interfere with the impugned order dated 19.2.2009

21. As regards to the reference of the judgment in Writ Appeal No. 1923 of 2005, we may point out that none of the above points were either advanced or argued or discussed in the said judgment and therefore, the said judgment is not useful to the appellant.

22. For all the above reasons, the Writ Appeal fails and it is dismissed. No costs.