‘Order passed by the authority should be reflected in records’

The Madurai Bench of the Madras High Court has observed that once an order is passed by the authority declaring a transaction to be fraudulent and it has become final, the same has to be recorded in the relevant register and must be reflected in the encumbrance certificate.

Justice N. Anand Venkatesh observed that the Registration Act provides a mechanism to the authority concerned to deal with a complaint pertaining to a fraudulent transaction. Once an authority exercises such a power, conducts an enquiry and finds that the transaction was fraudulent, the order passed by the authority should be reflected in the records. The authority on one hand cannot state that he will declare the transaction to be fraudulent and then send the party to a civil court to cancel the document. Declaring a transaction to be a fraudulent one, virtually makes that document void in the eye of law.

Once a document is void in the eye of law, it is non est and there is no necessity for a party to unnecessarily spend his time in a civil court seeking for cancellation of such a document. It would be a wasteful exercise without any purpose, the judge said.

The court was hearing the petition filed by S.R.M. Packiri Rajan of Dindigul district. He filed the petition challenging the District Registrar’s decision to reject his representation seeking cancellation of an entry made in the encumbrance certificate. The judge observed that in the present case, the authority, after conducting an enquiry, had found the transaction to be a fraudulent one and thereby, the document executed became non est in the eye of law.

It is stated that this order had become final. Once such orders are passed, there is no requirement to cancel the document and it is enough if a necessary entry is made in the encumbrance certificate itself reflecting the proceedings of the authority concerned declaring the transaction to be a fraudulent one. Once such an entry was made in the records, it automatically reverses the earlier registration of the fraudulent document, the judge said.