The Madras High Court (HC) on February 14, 2023, declared invalid a newly inserted legal provision in registration rules that empowers sub-registrar’s in Tamil Nadu to refuse registration of deeds for mortgaged or attached immovable properties.
Last year, the Tamil Nadu commercial taxes and registration department amended the registration rules under the Registration Act 1908, endowing more powers to sub-registrars.
The new rules allow the registering officer the power to refuse a registry of documents where an encumbrance in the form of mortgage or attachment order exists and the time limit for filing a suit has not lapsed. The new rules came into effect on September 5, 2022.
Stating that the new rule was clearly illegal, Justice N Sathish Kumar said a rule will completely nullify Section 48 and Section 56 of the Transfer of Property Act.
“The limitation period for redeeming a mortgage is 30 years… the new rule has the effect of completely nullifying Sections 48 and 56 of the Transfer of Property Act that empower owners to deal with properties that had been mortgaged,” the judge said.
The HC also elaborated on why refusal to register an attached property would be illegal.
“If the attachment is made for recovery for Rs 1 lakh, and the property value is more than Rs 1 crore, it cannot be said that the entire property cannot be dealt with by its owner. In such a case, sale is void only against the claim of Rs 1 lakh and the interest, not in entirety,” ruled the HC while giving its order in case pertaining to private lender Federal Bank.
“It would be clearly illegal and violative of a citizen’s right to deal with his property besides infringing Article 300A of the Constitution. It does not bear repetition that Article 300A has been recognized as a human right,” the HC said in its judgement.
The HC also questioned the logic behind a new provision in the registration law that insists on production of the original property documents for further registry.
A person desiring to execute a Will would not be able to produce the original document if the property was under mortgage. In case of joint properties also, a shareholder may not be able to claim his share because co-owners refuse to part with the original deed, the HC said.
The high court also wondered how the new rule allowed registration of ancestral property based on revenue records such as patta or tax receipt in the absence of original deed. “Production of revenue documents to verify the source of title only demonstrates complete ignorance of the settled legal position,” it said.
Civil suit no bar to plea against deed, says HC
Another Bench of the HC has also ruled that an application for cancellation for a registered deed can be made even if a civil suit is pending.
The right of an aggrieved party to go before the registrar invoking the newly added provision (Section 77A) of the Registration Act cannot be taken away merely because a civil suit is pending,” said Justice R Suresh Kumar while disposing of a plea challenging a notice for cancellation of a property deed registered with the Tiruppur sub-registrar.
An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
sunita.mishra@proptiger.com
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