Read Order: ASSET RECONSTRUCTION COMPANY LIMITED Vs. S.P. VELAYUTHUM AND ORS. 

Mansimran Kaur

New Delhi, May 05, 2022: The Supreme Court has observed that examining whether the Registering Authority did something in the manner required by law or otherwise, is certainly within the jurisdiction of the High Court under Article 226. However, the High Courts may refuse to exercise jurisdiction in cases where the violations of procedure on the part of the Registering Authority are not gross or the violations do not shock the conscience of the Court.

The Division Bench of Justice Hemant Gupta and Justice V. Ramasubramanian opined that the registration of a document comprises three essential steps among others. These include execution of the document by the executant signing or affixing his left hand thumb impression, presenting the document for registration and admitting to the Registering Authority the execution of such document and the act of registration of the document.

The Bench asserted, “If a party questions the very execution of a document or the right and title of a person to execute a document and present it for registration, his remedy will only be to go to the civil court. But where a party questions only the failure of the Registering Authority to perform his statutory duties in the course of the third step, it cannot be said that the jurisdiction of the High Court under Article 226 stands completely ousted.”

Herein, Asset Reconstruction Company preferred the present appeals assailing the judgment of the Division Bench of the High Court of Madras, whereby the judgment of the  Single Judge of the Court was reversed, wherein the Single Judge held the registration of a sale deed by the Registering Authority null and void. 

Facts in brief relevant for the disposal of the present appeals were that in the year 1992, the Indian Bank sanctioned financial facilities to M.V.R. Group of Industries. According to the Indian Bank, the borrower offered the immovable property covered by the document now in dispute, as collateral security and a mortgage by deposit of title deeds was said to have been created way back in the year 1995-96. 

With reference to default in repayment of loan, Indian Bank instituted an application before the Debts Recovery Tribunal in the year 1996 under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993.After the advent of the Securitization Act, 2002, the Bank issued a demand notice dated December 15, 2004  under Section 13(2) of the Securitisation Act. It was followed by a possession notice dated March 30,2005 under Section 13(4).

Thereafter on the basis of registered deed of PoA dated August 23, 2006 which did not confer power of sale, the respondent Mr. SP Velayutham sold the property to Amar under a deed of sale dated July 5, 2007. 

Amid this, the Indian Bank initiated proceedings under the Securitisation Act, assigned the debt and the collateral security in favor of the appellant herein, which is an asset reconstruction company. In reference to the assignment, the appellant issued a sale notice dated August 5, 2008. 

Thereafter, during the period of 2009-2015, some encroachments took place which led to the initiation of proceedings under Section 145 Cr.P.C. The original borrowers also filed the civil suits and the appellants got themselves  impleaded in those suits.

Ultimately, the appellant approached the High Court by way of writ petition seeking a declaration that the act of Sub- Registrar in registering the sale deed executed by S.P. Velayuthum in favor of his son Amar, was null and void. The said writ petition was allowed by the single Judge Bench.

However two contra appeals initiated by the respondents were allowed by the Division Bench. Aggrieved by the same, the appellant moved the present appeals. 

The Counsel for the appellants submitted that the Division Bench of the High Court failed to appreciate that the Registration Act, 1908 enjoins upon the Registering Authority to verify the “person executing” the document sought to be registered. It was further submitted that when the authorities fail to perform their duties then the jurisdiction of the High Court under Article 226 of the Constitution does not stand. 

The Counsel for the respondents submitted that when the title suits were pending and the appellant was impleaded as a party therein, then it was not apposite on the part of the appellant to invoke the jurisdiction of the writ court. 

The Apex Court after hearing the submissions of both the parties at length, dealt with the question of law as to whether the invocation of writ jurisdiction of the High Court by the appellant was right, specifically when the civil suits at the instance of the third parties were pending and when directions were already issued by this Court to the appellant in proceedings under Section 145 of the code of Criminal Procedure,  to move the civil court. 

To answer the same, the Court took into consideration several relevant provisions of the Registration Act, 1908.It was further noted by the Apex Court that the Registration Act falls under the concurrent list and being a Central Act it can only be seen as a template on which the States are entitled to make amendments. This meant that any interpretation of the provisions of the Act should be in consonance with the Scheme of the Act as applicable to the State involved in litigation.

The Court preferred the case of Latif Estate Line India Ltd v. vs. Hadeeja Ammal, wherein the Full Bench of Madras High Court dealt with the issues as to whether a deed of cancellation of sale can or cannot be accepted for registration. The Full Bench held that a deed unilateral cancellation cannot be even accepted for registration. In view of the same, the Apex Court observed that the same bolsters up  the contention of the appellant that the Registering Officer has a duty to see whether the document presented for registration has been presented in accordance with law or not. It was further noted that the decision of the Full Bench itself emerged out of a writ petition. 

Further after analyzing Sections 32 and 33 of the Registration Act, 1908 this Court came to the conclusion that whenever an agent is authorized to execute a document and present the same for registration and he accordingly executes the document in terms of PoA, he becomes the actual executant in so far as the Registering Authority is concerned and that therefore he becomes entitled under Section 33(a) to present it for registration. This Court further held that the authentication in terms of Section 33(1)(a) is required only in cases where Section 32(c) is invoked.

It was further observed that the registration of a document comprises three essential steps among others. These include steps such as execution of the document, by the executant signing or affixing his left hand thumb impression; presenting the document for registration and admitting to the Registering Authority the execution of such document; and the act of registration of the document. Thus, it was observed that in cases where a suit for title is filed, with or without the relief of declaration that the registered document is null and void, what gets challenged, is a combination of all the aforesaid three steps in the process of execution and registration and the same should be challenged before the Civil Court and not before the writ court. 

However, the Court noted that where a party questions only the failure of the Registering Authority to perform his statutory duties in the course of the third step, it cannot be said that the jurisdiction of the High Court under Article 226 stands completely ousted. It was further observed that the lack of jurisdiction is completely different from a refusal to exercise jurisdiction. It was further observed that examining whether the Registering Authority did something in the manner required by law or otherwise, was certainly within the jurisdiction of the High Court under Article 226. However,as per the Bench it  wasneedless to say that the High Courts may refuse to exercise jurisdiction in cases where the violations of procedure on the part of the Registering Authority are not gross or the violations do not shock the conscience of the Court, the Court further remarked. 

On similar findings, the Top Court opined that in the present case the appellant assailed only the act of omission on the part of the Registering Authority in order to check whether the person who claimed to be the power agent, had the power of conveyance and the power of presenting the document for registration, especially in the light to the statutory rules. 

It was further observed that if the Registering Authority is found to be exercising a quasi judicial power, the exercise of such a power will still be amenable to judicial review under Article 226, subject to the exhaustion of the remedies statutorily available. On the contrary if the Registering Authority is found to be performing only an administrative act, even then the High Court is empowered to see whether he performed the duties statutorily ordained upon him in the manner prescribed by law.

Thus, by taking into consideration the provisions of the Tamil Nadu Registration Rules, the statutory Scheme of 32 to 35 of the Act and the stark distinction made between the first two steps of registration in the process of execution of document and the third step concerning registration, the Top Court observed that the impugned order of the Division Bench of the High Court should be quashed and the order of the Single Judge should be restored. 

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