Sub-Registrars cannot register civil suit plaints and make them reflect in property encumbrance certificates, rules Madras High Court

Madras High Court rules Sub-Registrars cannot register civil suit documents in encumbrance certificates, protecting landowners from fraud.

In a significant verdict, the Madras High Court has ruled that Sub-Registrars cannot register either the plaints filed in civil suits regarding immovable properties, or the dismissal orders passed in interim injunction applications and make consequent entries in the encumbrance certificates.

Justice N. Anand Venkatesh said registering the plaints/dismissal orders and making such registration reflect in the encumbrance certificate too would only help the trouble mongers in preventing the genuine landowners from dealing with their properties in a lawful manner.

“If the owner of a property should be stopped from dealing with the immovable property, the easiest method to adopt will be to register the pleading before the Registration office and create an entry in the encumbrance certificate. Once that is done, the owner will not be able to deal with the property since the purchaser would want that entry to be removed or deleted,” the judge pointed out.

He examined in detail the definitions of the terms ‘document’ as well as ‘instrument’ and analysed the provisions of the Registration Act of 1908 and the Indian Stamp Act of 1899. Thereafter, the judge wrote: “This court holds that pleadings that are filed in a civil suit do not assume the character of a document or an instrument and in such an event, the Registration Act and the Stamp Act will not come into play and consequently, pleadings cannot be entertained and registered and no entries can be made in the encumbrance certificate.”

When Government Advocate P. Harish recalled that two single judges of the High Court had in the past directed the Registration Department to register plaints filed in civil suits so that the purchasers of a property get to know about pending litigation, Justice Venkatesh said: “Even though, such directions are well intended, there was a flip side to it.”

The pleadings in a civil suit do not satisfy the requirements under the Registration Act as well as the Indian Stamp Act and therefore, they could not be registered, he pointed out and said: “This court holds that the earlier directions are not in line with the provisions of the Registration Act and the Stamp Act and hence, must be held to be per incuriam (an order passed without taking note of the legal position).”

Observing that any property transaction that takes place during the pendency of a litigation would only be hit by the rule of lis pendens (pending legal action), the judge said: “Ultimately, it is for the legislature to bring about necessary amendments in the Registration Act and in the Indian Stamp Act to deal with the situation and the courts cannot issue directions which will run contrary to the existing provisions.”