Property Registration does not Guarantee Ownership: Supreme Court in its Landmark Judgement

The Supreme Court, in a landmark Judgement, has held that the registering officer is not concerned with the title held by the executant. He has no adjudicatory power to decide whether the executant has any title. Even if an executant executes a sale deed or a lease in respect of a land in respect of which he has no title, the registering officer cannot refuse to register the document if all the procedural compliances are made and the necessary stamp duty as well as registration charges/fees are paid.

The Apex court has noted that under the scheme of the State of Tamil Nadu in the 1908 Act, it is not the function of the Sub-Registrar or Registering Authority to ascertain whether the vendor has title to the property which he is seeking to transfer. Once the registering authority is satisfied that the parties to the document are present before him and the parties admit execution thereof before him, subject to making procedural compliances as narrated above, the document must be registered. The execution and registration of a document have the effect of transferring only those rights, if any, that the executant possesses. If the executant has no right, title, or interest in the property, the registered document cannot effect any transfer.

Rule 55A(i) declared ultra vires the State of Tamil Nadu in the 1908 Act

Rule 55A provides that unless documents are produced to prove that the executant has a right in respect of the property subject matter of the instrument, the registration of the same shall be refused. Thus, if a sale deed is presented for registration, documents must be produced to demonstrate that the executant has acquired ownership of the property. In a sense, power has been conferred on the registering officer to verify the title of the executant. Unless documents are produced evidencing title as required by Rule 55A(i), registration of the sale deed shall be refused.

As per the Apex Court, this Rule is inconsistent with the provisions of the 1908 Act. Thus, Rule 55A(i) was accordingly declared as ultra vires the State of Tamil Nadu in the 1908 Act.

Impact on Home Buyers:

As a result, Home Buyers, property buyers are required to be more cautious at the time of buying property. Buyers should engage in complete due diligence, including title verification and legal consultation, to ensure the property is free from disputes. In case the title of property is in dispute, there is are high chance that their title, even after making the payment and doing the registry, comes to a halt.