What the Registration Act Does, and the Registration Establishment

In one line

The Registration Act sets up an official record of dealings in land, staffed by registering officers in every district, so that a buyer can find out what has already been done with the property.

In exam wording: the Registration Act 1908 is an Act to consolidate the enactments relating to the registration of documents; it came into force on 1 January 1909; and Part II establishes the registration establishment, from the Inspector-General of Registration down to the Sub-Registrar of each sub-district.

Why a registration system exists

The Act is machinery, and its purposes are worth stating because they explain every rule in it.

Publicity. A registered document is on a public record that anyone may search. Land is expensive, invisible dealings are easy, and a buyer needs a way to discover what his seller has already done. This is why section 3 of the Transfer of Property Act, in Explanation I, treats registration as notice to the world.

Prevention of fraud and forgery. Registration requires the parties to appear before a public officer who satisfies himself of their identity and of the execution. That makes a forged conveyance far harder.

Preservation of evidence. The register-books survive fires, floods and dishonest custodians in a way private deeds do not, and copies from them are admissible.

Order of priority. A public record with dates makes it possible to say which of two competing dealings came first, which is what section 48 of the Transfer of Property Act needs.

The Supreme Court put the purposes in almost these words in Suraj Lamp and Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656, decided on 11 October 2011 by Raveendran, Patnaik and Gokhale JJ.

Facts. The Court examined the practice, widespread in and around Delhi, of transferring immovable property without a registered conveyance: the seller would deliver possession and execute an agreement of sale, a general power of attorney and a will in the buyer's favour, a package the Court called an SA/GPA/WILL transfer. The purpose was to escape stamp duty, registration fees and capital gains tax, and to place undisclosed money in property.

Held. Immovable property can be legally and lawfully transferred or conveyed only by a registered deed of conveyance. An agreement of sale, a power of attorney and a will, singly or together, do not convey title and do not amount to a transfer, nor can they be recognised as a valid mode of transfer. As to section 53A of the Transfer of Property Act, the Court held that it gives the proposed transferee a limited protection: it disentitles the transferor from disturbing the possession he has given, but it has nothing to do with ownership, which stays with the vendor until a registered deed of sale is executed.