The Registration Act, 1908 serves the purpose of proper recording and registration of documents/instruments, which gives them more authenticity. Registration means recording the contents of a document with a Registering Officer and preservation of copies of the original document. Documents are registered for the purpose of conservation of evidence, assurance of title, publicity of documents and prevention of fraud.
Purpose of the Act
The purpose of the Registration Act, amongst other things, is to provide a method of public registration of documents so as to give information to people regarding legal rights and obligations arising or affecting a particular property, and to perpetuate documents which may afterwards be of legal importance, and also to prevent fraud. Registration lends inviolability and importance to certain classes of documents.
Registration of Document
The documents registrable under the Act fall under three categories.
In the first category, documents relating to transactions which according to the substantive law, can be effected only by registered documents. In order for a transaction to be valid must be effected by a registered instrument only. What it provides is that when there is a written instrument evidencing a transaction, it must, in certain cases, be registered. Under section 17 of the Registration Act, the compulsorily registrable documents are given.
In the second category, certain transactions can be effected without writing, i.e. partitions, releases, settlements, etc. But, if the transaction is evidenced by a writing and relates to immovable property, the Registration Act steps in and clauses (b) and (c) of Section 17(1) of said Act requires registration of such documents, subject to the exception specified in sub-section 2 of that section. If an authority to adopt is conferred in writing, other than a Will, it is also required to be registered to vide section 17(3).
In the third category, it is open to the parties, if they so choose, to get certain documents registered at their option and this is permitted by section 18. ‘Will’ need not be registered but it is open to the parties to get it registered under the third category.
Under the Registration Act, the following Documents are Compulsorily Registrable:
- Documents related to the gift of immovable property. Any gift deed irrespective of the value of the gifted property needs to be registered.
- Other non-testamentary instruments which purport or operate 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 one hundred rupees and upwards, to or in immovable property.
- Non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest.
- Most mortgages need registration. However, a mortgage created by depositing of title deeds (also known as equitable mortgage) is not compulsorily registrable under the provisions of Section 54 of the Transfer of Property Act 1882, the sale of the property should be registered. (Only if the value of the property is less than Rs. 100, the registration of the sale deed is not mandatory. So, effectively, all sale deeds need to be registered.)
- Leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent must be registered. The term from year to year denotes the continuity of lease from one year to the next year. In such a case, the landlord cannot terminate the lease at the end of the year without notice. The term ‘reserving yearly rent' means the annual rent has been determined but the lease has no definite period. The lease should run year after year or at least for more than a year. This means any lease which is in excess of one year should be registered.
- The purchase of a house through a sale deed should be registered with the office of the registrar or sub-registrar of the district within whose jurisdiction the house is situated. Registration is done after the parties – buyer and seller – have executed the documents related to purchase and sale. The sale deed should be registered with the Sub-registrar of Assurances within four months from the date of execution of the document. In case due to some unavoidable circumstances, this is not done within the prescribed time limit of four months, the document can still be registered. An application needs to be made to the Sub-registrar of Assurances within a further period not exceeding four months. Along with the application, the prescribed fine needs to be paid.
- Non-testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or 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 one hundred rupees and upwards, to or in immovable property.
When Does a Document Need Registration?
There are several documents that are not compulsorily registerable under section 17 of the Registration Act 1908. Some of them require high stamp duty and some of them do not. Even the ones that require high stamp duty, if they are under stamped, can be rectified later by paying a penal amount ten times the original amount. Non-payment of stamp duty does not make the document void or otherwise invalid.
The consequences of under stamping as per the stamp act are:
(1) to make the document inadmissible for the evidence before any authority capable of receiving evidence before any public authority.
(2) the document can also be impounded for enforcing the payment of full stamp value. An under stamped instrument can be admitted as evidence in court, if penal stamp duty is ten times the value of the original amount, and is paid.
In conclusion, always register a document which is compulsory registerable or for which stamp duty is not high. Documents for which stamp duty is high and which do not require registration do not become invalid for want of proper stamp duty alone. But the rights of both parties should be protected in case of default, so consult a lawyer. Always give possession separately and never in the documents itself.
Limitation for Registration of a Document
Limitation for registration of a document under Section 23 of the Act, subject to certain exceptions, any document other than a Will has to be presented for registration within four months from the date of its execution. The term ‘execution’ means the signing of the agreement.
Section 17 deals with documents of which registration is compulsory. Whereas, sub-Section (2) of section 17 provides dozens of exceptions to clause (b) and (c) of section 17(1).
Section 18 of the Registration Act pertains to documents of which registration is optional. Word ‘may’ is used in textual of section 18.
The Registration Act strikes only at documents, and not at transactions. All that it enacts is that when a document is employed to effectuate any of the transactions specified in s.17 of the Registration Act, such document must be registered.
What are the Benefits of Registering Documents?
Registration of a document gives a more transparent deal. Even if a registered document is lost or damaged, the registration records prove the authenticity of the document. A document stating that a Power of Attorney has been revoked should also be registered so that there is no misuse after revocation. Easy access also helps in finding the owner who has the title and right to the property and whether there is any case against him or an existing liability before someone decides to buy it. Registration also prevents forgeries or fraud in transactions specifically in tax, stamp duty, etc.
Even though some documents are registered on an optional basis, it is still advised to register them as this will prove the authenticity of the document and set aside any doubts arising because of it.
The registrations act illustrates the procedure of registering, what documentations should be registered and how it should be done. The registration of Will documents, powers, and duties of the registrations department. It also explains about the penalties and punishment for not following the procedure and not completing things on time. Therefore, it is important to promptly register documents as per Section 17 of the Registration Act, 1908 to avoid time-consuming and costly legal battles. Further, this Act brings a good administration system among government offices and the court system that everything should be managed within time and in a proper procedure in order to avoid future confusion.