Plea For Deletion Of Section 47 Of Registration Act, 1908

PLEA FOR DELETION OF SECTION 47 OF REGISTRATION ACT, 1908 PLEA FOR DELETION OF SECTION 47 OF REGISTRATION ACT, 1908 BY Ch. Muhammad Bashir Advocate, Faisalabad Section 47 of the Registration Act, 1908 not only conflicts with section 49 of the Registration Act, by reference to the time since when a registered document is to be given effect to, but also has become a source of fraud. In order to appreciate, the two‑fold effects of section 47 it is thought expedient to reproduce the said provisions and section 23 of the Registration Act and sections 54 and 78 of Transfer of Property Act, 1882. Section 47: "A registered document shall operate from the time from which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration". Section 49. "No document required to be registered under this Act or under any earlier law providing for or relating to registration of documents shall operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest whether vested or contingent, to or in immovable property unless it has been registered." Section 23. "Subject to the provision contained in sections 24, 25 and 26 no document other than a will shall be accepted for registration, when presented for that purpose to the proper officer within four months from the date of its execution. Section 54. of Transfer of Property Act, 1582: "Sale" is a transfer of ownership in exchange for a price paid or promised or part paid and part promised. Such transfer, in the case' of tangible immovable property of the value of one hundred rupees and upwards or in the case of a reversion or other intangible things, can be, made only be a registered instrument. Section 78 of Transfer of Property Act, 1882: "Where through the fraud, misrepresentation or gross neglect of a prior mortgagee, another person has been induced to advance money on the security of the mortgaged property, the prior mortgagee shall be postponed to the subsequent mortgagee." As to the conflict between section 47 and section 49, the comparative study of the said two sections makes it manifest. Section 49 does not recognise the existence of a document unless it is registered. It is only the act of registration of a document under section 60 of the Registration Act which has the magic effect of creating, declaring, assigning, limiting or extinguishing any right, title or interest in immovable property. On the contrary, section 47 provides that a registered document shall operate from the date of its execution. The time gap between the execution and registration of a document can extend. up to 4 months under section 23. It can even go beyond that. Suppose a document is presented for registration within the said time but its registration is refused under section 71. The Executee can approach the Registrar for remedies provided under sections 72 and 75. Even further remedy can be availed under section 77 by filing suit in the Civil Court, seeking direction for registration of a document. This whole exercise may consume a lot of time. When ultimately the document is registered it will relate back to the date of execution. An anamolous situation emerges when section 49, on one hand, provides that a document shall take effect from the date of its registration and section 47, on the other, provides that effect of registration shall extend retrospectively to the date of execution. This fictional extension of effect of registration of a document under section 47 to the date of its execution, cannot co‑exist with non‑effectiveness of execution of a document under section 49 unless it is registered. This point of conflict has not been dealt with in any reported case. As to the second objection to section 47 that it has encouraged fraud, it has two aspects. One, where the executant has exploited the time gap between the execution and registration of ' a document and two, where third parties interests have been prejudicially affected. Section 47, taken on its own footing, seems to convey that executant of a document is bound down to keep the property intact till the registration thereof and as soon as registration takes place it will 'operate retrospectively from the date of execution. The Registration Act, by the very nature of its object, deals with transfer of property from one person to another through the media of document and it, thus, remains confined to executant and executee of a document and is not concerned with stranger to document. If the operation of section 47 is restricted to the parties to a document and the subject‑matter of the document remains intact till the registration of the document then the retrospectivity of Registration. to the date of execution of document does not pose any difficulty. The operation of section 47 does not extend beyond it. It is so held in AIR 1937 Rangoon 446 and PLD 1965 Dacca 205. In the former report it has been held that "the requirement of registration of a document is an evidentiary requirement" an unregistered transfer is inchoate and is ineffective until registered. But it nevertheless exists and when registered operates from the date of its execution. In the later report it has been held that "section 47 has little to do with the completeness or incompleteness of a, transfer, as it has nothing to do also with the completeness or incompleteness of Registration. The incompleteness in the text of section 47 is the incompleteness of a document and not of the transfer as such. It cannot be disputed that a transfer which is incomplete by reason of breach of any statutory provision specifying the mode, its completeness cannot be completed by registration. The sole purpose of section 47 is to meet objections touching the incompleteness of a document during the period it remained incomplete due to want of registration. The rule as to commencement of operation contained in section 47, is, in terms, to be confined, in its application, to the document. Its impact on the transfer can affect only the transferor and the transferee. It has no relation to the rights of a person who is not a party to the document. He comes into the picture only after the registration i.e. when a deed of transfer duly completed by registration comes into existence. The difficulty, however, has arisen in a situation where vendor of a property firstly executes a sale‑deed in favour of a vendee and then pending registration of that sale‑deed, sells away the same property to another person and executes a sale‑deed and gets it also registered, before the ‑first sale‑deed is registered. To resolve the question as to which of the sale‑deeds is to be given priority over the other, the Courts have interpreted section 47 so as to give priority to sale‑deed which was executed first in point of time though registered subsequent to the execution and registration of the subsequent sale‑deed. I refer to cases reported in 52 IC 99 and 192 IC 812 in which the rule has been followed. The ratio of both the reports is reproduced hereunder:‑‑ In 52 IC 99 it is held that "A executed a sale‑deed of certain land in B's favour on 5th December, 1916 but the deed was not registered. On 6th December, 1916, A executed another sale‑deed of the same land in C's favour and the deed was followed by registration the same day. A refused to have the sale‑deed in B's favour registered. B thereupon applied to the Registrar for compulsory registration under section 73 of the Registration Act, who referred the matter for inquiry to the Sub‑Divisional Officer and on receipt of the latter's report directed the deed to be registered in B's favour under section 75 of the Registration Act. Held, (1) that the registration of B's deed was not rendered invalid by reason of the Registrar delegating the holding of the inquiry to another person (P.10, Col. 1). (2) That the sale‑deed in B's favour took effect under section 47 of the Registration Act from the date of its execution and must prevail against the sale deed in C's favour, notwithstanding the latter's earlier registration (P.100 Col. l)." In 192 IC 812.it is held that "One S sold a piece of land under sale‑deed on August 7, 1934 to D but the sale‑deed was registered on February 26, 1935 On August 17, 1934 S again sold the same land to P under a registered sale‑deed of that date and P entered into possession but was dispossessed by D. In P's suit for possession: Held, that according to section 47, Registration Act the sale‑deed in favour of D operated immediately after its registration not from the date of registration but from the date of its execution, namely August 7, 1934, and hence D had a good title by sale and subsequent sale to D did not give him any title, section 54, Transfer of Property Act did not affect the position as sale to D was made by a registered instrument, though registration actually took place after the date of the sale‑deed to P and its registration. The sale to P was always subject to the sale to the D being perfected by registration in which case nothing would pass to the P at all. 174 Ind. Cas. 378(1) referred to. The said interpretation of section 47 enables an unscruplous vendor to sell the property twice and, even many times more, with impunity and defraud the subsequent purchasers, who without being in a position to know the earlier execution of sale‑deed, purchase the property in good faith and for consideration. One question which has remained unattended to in the judicial precedents, dealing with above‑cited situation, is that how it is possible that there may be two or more registered sale‑deeds by a vendor in respect of the same property, ''When one sale‑deed has been registered then the title in the property stands transferred to the vendee. The vendor is left with no title in the property to get it transferred over again to another person. No law permits the multiple registration of sale‑deeds in respect of the same property. What rule the Courts would have followed if they had considered the impossibility of existence of two or more registered sale‑deeds in respect of the same property by the same vendor, it is difficult to imagine. However, section 78 of Transfer of Property Act, 1882 has been enacted to check fraud on the part of first mortgagee, who through fraud misrepresentation or gross neglect, has not got its mortgage deed registered, and has induced subsequent mortgagee to advance loan on the security covered by first unregistered mortgage deed. Going by the reigning consistent interpretation of Courts of section 47 in the case of multiple sales of the same property, the said section has become a convenient means of playing fraud on innocent purchasers. The fraud may assume two shapes, one, where the vendor concealing the execution of sale‑deed in favour of first purchaser, sells away the same property to another vendee and gets the sale‑deed registered in favour of the subsequent purchaser, and later on gets the first sale‑deed also registered. In this way he dupes both the purchasers. Two, when the vendor in collusion with a person, executes a fictitious sale‑deed in his favour and then sells away the property to another, in the same manner as is covered by first situation, and in this way he dupes the subsequent purchaser. Section 47 has also been manipulated to defeat rights of third parties in pre‑emption suits. Section 21‑A of Punjab Pre‑emption Act, 1913, couched as it was in negative form, prohibited any improvement otherwise through inheritance or succession, to be made in the status of a vendee‑defendant after the institution of a suit for pre‑emption and was not to affect the right of the pre‑emptor/plaintiff in such suit. Applying the above‑quoted rule of interpretation of section 47, in 1992 SCMR 2300 and 1994 MLD 1390, a document executed before the institution of suit of pre‑emption in favour of vendee‑defendant but registered after the institution of the suit, was held to have improved the status of vendee -defendant before the institution of suit and the plaintiff's suit was dismissed. In the above‑stated facts the pre‑emptor having got no knowledge about the execution of document in favour of defendant creating a title, equal or superior to that of the pre‑emptor, has been prompted to file suit for pre‑emption on the 'basis of superiority of his claim, by reference to facts obtaining at the time of institution of suit. Even if he had known the execution of document in favour of vendee, he could not be sure that it would have been eventually got registered. Similar position can prevail in respect of pre‑emption suit filed under Punjab Pre‑emption Act, 1991. In the presence of section, 49 there is no need of section 47, which instead of serving any positive beneficial end has become a source of fraud. Let the Legislature take notice of the plea for deletion of section 47 in order to relieve the people of being subjected to fraud.