Registering Authority Bound To Verify If Power Of Attorney Gives Power To Sell; Sale Deed Registration Not A Mechanical Process : Supreme Court

The Supreme Court has held that a Registering Authority under the Registration Act 1908, while registering a sale deed executed by a Power of Attorney holder, is bound to verify if the Power of Attorney empowers the agent to sell the property.The Court noted that the provisions of the Registration Act, particularly Section 34(3)(c), imposes an obligation on the Registering Officer to satisfy himself about the right of a person appearing as a representative, assign or agent.Finding fault with the Registering Authority for allowing the registration of a sale deed on the basis of the Power of Attorney despite the PoA prohibiting the agent from creating encumbrances on the property, the Court stated that a Registrar cannot be held to be performing a mechanical role."If the Registering Officer under the Act is construed as performing only a mechanical role without any independent mind of his own, then even Government properties may be sold and the documents registered by unscrupulous persons driving the parties to go to civil court. Such an interpretation may not advance the cause of justice", the bench comprising Justices Hemant Gupta and V Ramasubramanian observed.The bench was hearing appeals filed by Asset Reconstruction Company(India) Ltd challenging the action of registering authorities in allowing the registration of sale deed executed by one S P Velayutham with respect to a property over which the appellant had security interest. A single bench of the Madras High Court had allowed the appellant's prayer to declare the registration of sale and deed as null and void on the ground that there was failure on the part of the Registering Authority to follow the mandate of law as prescribed in Sections 32 to 35 of the Registration Act, 1908 and that the Registrar failed to verify the PoA. However, a division bench set aside the single bench verdict on the primary ground that remedies ought to have been sought in a civil suit and not under Article 226 of the Constitution.Supreme Court's analysisThe judgment authored by Justice Ramasubramanian contains a detailed analysis of the provisions of the Registration Act and the Tamil Nadu Rules on the duties and functions of the Registering Authorities."There is and there can be no dispute about the fact that while the Registering Officer under the Registration Act, 1908, may not be competent to examine whether the executant of a document has any right, title or interest over the property which is the subject matter of the document presented for registration, he is obliged to strictly comply with the mandate of law contained in the various provisions of the Act", Justice Ramasubramanian stated (para 11).The Court also said that there are State Amendments to Registration Act. "Therefore, the interpretation made by this Court, of a provision as amended in its application to a particular State, cannot be applied blindly while interpreting the same provision as applicable to another State", the Court said. In the instant case, the Court took into account the Tamil Nadu amendments made to the Registration Act and also the TN Rules made under the Act.Section 32(c) of the Act mandates that an agent presenting a document for registration must be duly authorised by power of attorney executed and authenticated in manner mentioned in the act."In other words, in cases where a document is presented for registration by the agent, (i) of the executant; or (ii) of the claimant; or (iii) of the representative or assign of the executant or claimant, the same cannot be accepted for registration unless the agent is duly authorized by a PoA executed and authenticated in the manner provided in the Act" (Para 16)Section 33 mentions the Power of Attorney recognizable for the purpose of Section 32. Section 33 says that the Power of Attorney must be authenticated by the persons specified in the section.Persons who are empowered by clauses (a), (b) and (c) of sub section (1) of Section 33 to authenticate a PoA are as follows:(i) The Registrar or the SubRegistrar within whose district or subdistrict the principal resides, if such principal resides, at the time of execution of the PoA, in any part of India to which this Act applies;(ii) Any Magistrate, if the principal resides in any part of India where this Act is not in force;(iii) A Notary Public, any Court, Judge, Magistrate, Indian Consul, Vice Consul or Representative of the Central Government, if the principal does not reside in India.Authentication does not mean registrationThe Court explained that the word "authenticated" in Section 33 does not mean "registered". "A careful look at Sections 32 and 33 will show that while speaking about PoA, these provisions do not use the word "registration". While Section 32(c) uses the words "executed and authenticated", Section 33(1) uses the words "recognised" and "authenticated". Therefore it is clear that the word "authenticated" is not to be understood to be the same as "registered""(Para...

Registering Authority Bound To Verify If Power Of Attorney Gives Power To Sell; Sale Deed Registration Not A Mechanical Process : Supreme Court

Manu Sebastian

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