LEGAL CHAT
The registration process
N.C.S. RAGHAVAN
ARAVIND RAGHAVAN
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In a property deal, the transferee has the right to present unilaterally the document for registration under certain circumstances
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In a property deal, after the Memorandum of Understanding (MoU) expressing in clear terms the intention of the parties to the transaction, the broad terms and conditions and a “road map” of the legal steps and documentation to be undertaken to complete the transaction, the next step is the formal written agreement to transfer (sale, mortgage, lease, easement, licence, etc) being entered into between the parties. When this takes place, the parties acquire clear legal rights to acquire the ultimate rights and interests in immovable property on certain terms and conditions set out therein.
Following this, the agreement is acted upon and a formal deed of transfer (sale, mortgage, lease, easement, licence, as the case may be) is executed by them, duly stamped with the required denomination and valuation as per law.
This is the vital and decisive step taken by the parties by which the transferees acquire valuable rights and interests subject only to the completion of statutory formalities and compliances relating to registration of the document.
We will now examine certain developments which may follow after the execution of the formal deed of transfer. The transferor in the document may fail to present this document before the appropriate Sub-Registrar for registration deliberately to prevent the transaction getting completed.
Unilateral right
In such cases, the transferee, for whose benefit and for whose acquisition of valuable rights in the immovable property (ownership or lease rights or rights of a mortgagee or a lessee etc) the document is executed, has the right to present unilaterally the document for registration before the competent registrar having territorial jurisdiction. This right is provided under Section 32 of the Registration Act, 1908.
This Section clearly specifies that the transferee has such unqualified and unconditional right to present the document for registration either by himself or through a duly authorised representative. When such presentation of the document is made for registration, the Sub-Registrar has to verify whether the document has been duly signed by the transferor and the transferee and duly attested by witnesses as per law.
The Sub-Registrar will verify whether the document is duly and adequately stamped and is presented within a period of four months from the date of execution of the document.
Notice
When the transferor, as the executant of a compulsorily registrable document, deliberately absents himself from presenting the document for registration and for admitting execution thereof, the Sub-Registrar shall send a notice to the transferor to appear before him on or before a period specified in the notice.
The question arises as to what are the legal consequences of transferor/executant deliberately failing to appear in spite of issue of notice and summons.
The registering authority will refuse to register the document and give an endorsement to that effect recording in detail the reasons for refusing to register the document.
The aggrieved party, i.e the transferee or any other person claiming any right under the transfer, shall have the recourse to file an application before the District Registrar to whom the Sub-Registrar is subordinate within 30 days after the receipt of the order of the Sub-Registrar, to establish his right to have the document registered.
The District Registrar shall thereafter, as soon as convenient, enquire as to whether the document has been executed and whether the requirements of the law for the time being in force have been complied with on the part of the applicant or person presenting the document for registration, as the case may be, so as to entitle the document to registration.
Right to summon
If the District Registrar on enquiry finds that the document has been executed and all other requirements have been complied with, he shall order the document to be registered.
For the purpose of this enquiry, the District Registrar shall have the right to summon and enforce the attendance of witnesses and compel them to give evidence as if he were a Civil Court.
To avoid such risks and contingencies, it is advisable and prudent for a transferee to obtain an irrevocable power of attorney from the transferor in favour of the transferee or his nominee which is duly registered, authorising the power of attorney holder to admit execution of the document before the Sub-Registrar for and on behalf of the transferor/executant.
It shall be ensured that this power of attorney constitutes “an agency coupled with interest” under Section 202 of the Indian Contract Act, 1872. For e.g., a General Power of Attorney given to a developer automatically constitutes an irrevocable power of attorney as it is given to safeguard the development rights and interest of the developer.
(N.C.S. Raghavan is a chartered accountant and Arvind Raghavan, an advocate)
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