Friday, June 6, 2014

Registration Act and the Banker: II - Organizational Set-up for Registration of Documents


As per section 3 of the Act, the state governments are empowered to appoint an Inspector General of Registration as an overall in-charge of the Registration Establishment for the territories under its jurisdiction. The state governments are also empowered to form Districts and sub-Districts under the charge of Registrar and Sub-Registrar respectively.

The Inspector General of Registration shall exercise a general superintendency over all the Registration offices in the state and make rules from time to time consistent with the Act in matters such as:
  •         Providing safe custody of papers and documents;
  •         Demarcating territorial divisions;
  •          Regulating amounts of fines imposed under Sections 25 and 44; and
  •         Regulating the proceedings of Registrars and Sub-Registrars.
The Registrar is mainly responsible to register the documents presented before him for registration. He may also exercise his discretion to receive and register any document that might have been registered by any Sub-Registrar subordinate to him. Similarly, the main duty of the Sub-Registrar is to register the documents presented for registration.

The registering authorities are supposed to maintain the following books:
  •  Book No. 1 – It is a register of non-testamentary documents relating to immovableproperty;   all documents (other than wills) or memoranda registered under Sections 17, 18 and 89 which relate to immovable property are entered in this Register.
  • Book No. 2 – It is a record of reasons for refusal to register.
  •  Book No. 3 – It is a register of wills and authorities to adopt.
  • Miscellaneous Register or Book No. 4 – All documents registered under Clauses (d) and (f) of Section 18 which do not relate to immovable property are entered in it.
  •  Book No. 5 – It is a register of deposits of wills. This book is kept in the office of the Registrar.
The following indices are prepared in the registration offices:
  • Index No. 1 – It contains the names and additions of all persons executing and of all persons claiming under any document entered or memorandum filed in Book No. 1.
  • Index No. 2 – It contains such particulars as mentioned in Section 21 relating to every such document and memorandum as the Inspector General from time to time directs in this regard.
  • Index No. 3 – It contains the names and additions of all persons executing every will and authority entered in Book No.3 and of the executors and persons appointed thereunder and after the death of the testator or the donor, but not before the names and additions of all persons claiming under the same.
  • Index No. 4 – It contains the names and additions of all persons executing and of all persons claiming under every document mentioned in Book No. 4.
These are the books which bankers and lawyers (on behalf of bankers), usually look at, while undertaking search of title deeds.

Registerable Documents
The Act, for the purpose of registration, classifies documents into two groups:
·  Compulsorily registerable; and Non-compulsorily registerable, but may be registered optionally.
1   1. Compulsorily Registerable Documents
Section 17(1) states that the following documents must be registered:
  • Instruments of gift of immovable property;
  • Other non-testamentary instruments which purport or operate to create, declare, assign, limit, or extinguish whether at present or in future, any right, title or interest, whether vested or contingent, of the value of Rs.100 and upwards, to or in immovable property;
  • Non-testamentary instruments  (those which are intended to come into force with immediate effect, e.g., Sale Deed, Mortgage Deed, etc.; A Will is a testamentary document as it comes into effect upon the death of the maker of the will, i.e., the testator) which acknowledge the receipt or payment of any consideration  on account of creation, declaration, assignment, limitation or extinction of  any such right, title, or interest;
  • Leases of immovable property from year to year, or from any term exceeding one year, or reserving a yearly rent;
  • Non-testamentary instruments transferring or assigning any decree or order of a court or any award when such decree, order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of Rs.100 and upwards, to or in immovable property; and
  •  Authorities to adopt a son, executed after the 1st January, 1872 and not conferred by a will [Section 17(3)].
In addition, the following documents are also required to be registered under the provisions of the Indian Trust Act and the Transfer of Property Act, although they have not been specified in the Indian Registration Act:
1)      Under Section 54 of the T.P. Act, the instruments of sale of tangible property of the value of Rs.100 and upwards or of a revision or other intangible things are required to be registered.
2)  Section 59 of the T.P. Act lays down that where the principal money secured is Rs.100 or upwards, a mortgage other than a mortgage by deposit of title deeds can be effected only by a registered instrument. A simple mortgage always requires compulsory registration.
3)    Section 107 of the T.P. Act provides that lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent can be made only by a registered instrument.
4)      Under Section 123 of the T.P. Act, gift of immovable property must be made by the registered document.
5)   Whether the T.P. Act applies or not, a charge on immovable property can only be made by the registered document irrespective of the value of the property charged because Section 100 of the T.P. Act states that all the provisions which apply to a simple mortgage shall apply to such charge.
6)  Under Section 5 of the Indian Trust Act, the instruments of trust in relation to immovable property are required to be registered, unless made by a will.

Box 4: Registration of Documents – What State Laws Say
In addition to these provisions, one has to take cognisance of the state enactments too, i.e., if the state provisions warrant a particular document to be registered, it has to be registered though the Registration Act does not ask for. 
Co-operative Societies, being state subjects, registration matters relating to the societies are to be handled in consonance with the state provisions. For example, in the case of a Co-operative Housing Society, an instrument dealing with mere transfer of membership does not warrant registration in certain states, while it may be necessary in certain other states. A transfer of membership of a society entitles a right to reside in the flat, being incidental to the membership. 
However, a flat transferred under a sale deed calls for compulsory registration. 
In any case, from the creditor’s point of view, it is desirable to get such transfers done through a sale deed and get it registered.

2. Documents Exempted from Compulsory Registration
Sub-Section 2 of Section 17 exempts certain documents from the requirement of compulsory registration. They are:
  •  Any composition deed;
  •    Shares of companies;
  •  Debentures of companies;
  •  Documents merely creating a right to obtain another document (e.g. sale agreement is a document which entitles the prospective buyer to get Sale Deed executed in compliance with the terms of Sale Agreement; since this document by itself does not transfer the right to the title, it is not necessary to register such documents);
  • Any decree or order of a court except a decree or order expressed to be made on a compromise and comprising immovable property other than that which is the subject matter of the suit or proceedings;
  • Any grant of immovable property by the government;
  •  Any instrument of partition made by a revenue officer;
  •  Any order made under the Charitable Endowments Act, 1890;
  •  Any endorsement on the mortgage deed acknowledging the payment of the whole or any part of the mortgage money; and
  • Any certificate of sale granted to the purchaser of any property sold by public auction by a civil or revenue officer.
3. Documents Optionally Registerable

Section 18 of the Act specifies the documents the registration of which is optional. It states that any document not required to be registered under Section 17 of the Act may be optionally registered. 

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