Tamil Nadu

‘Registration of sale agreement no bar to sell property to third party’

We hold that Registrar has no right to refuse to register the subsequent document, the judges said.  

Registration of a sale agreement, expressing willingness to sell a property to a particular person on receiving full payment in future, will not be a bar for the property owner to go ahead and sell or transfer the property to a third party without getting the sale agreement annulled through a civil court decree, the Madras High Court has ruled.

A Division Bench of Justices C.V. Karthikeyan and N. Sathish Kumar held that the law does not empower Registration Department officials to insist upon court orders annulling sale agreements, if there were any, before registering sale deeds, gift deeds, settlement deeds or any other property transfer document executed by the owner.

‘Caveat emptor’

Answering a reference made to them by a single judge of the High Court, the Division Bench said: “It is for the buyer or subsequent transferee to make a reasonable enquiry. Doctrine of caveat emptor (let the buyer beware) will also apply to every transfer. It is for them to verify the title of the property by making necessary enquiry.”

The judges went on to state: “At any event, subsequent transfer will always be subject to rights already created. Therefore, it cannot be said that merely because agreement for sale is registered, subsequent transfer is prohibited and cannot be registered without obtaining a decree of declaration that such agreement is void.

“We hold that Registrar has no right to refuse to register the subsequent document on the basis that agreement of sale was already registered in respect of same property.”

Special cases

Authoring the verdict, Justice Kumar pointed out that the Registration Act of 1908 empowers the Registration Department officials to refuse registration of a document only in limited number of circumstances and does not accord them any omnibus power.

Section 19 of the Act states that the officials could refuse to accept a document for registration if it was in a language which they do not understand or which was not commonly used in the district unless it was accompanied by a true translation.

Similarly, Section 20 empowers them to refuse to accept documents with unattested alterations, interlineations, blanks or erasures. Further, Section 21 states that a Registrar could refuse to accept a document if the description of the property was not sufficient to identify it. “A combined reading of Sections 19 to 21 gives power to refuse the document only to set things right. Otherwise, the Registrar has no other go except to register the document,” the Bench said.

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Printable version | Jan 20, 2021 7:52:10 PM | https://www.thehindu.com/news/national/tamil-nadu/registration-of-sale-agreement-no-bar-to-sell-property-to-third-party/article33189038.ece

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