Documents of Which Registration Is Optional

But voluntary registration does not create notice under Explanation I. That Explanation applies only where the transaction was required by law to be effected by a registered instrument and has been. Registering an eleven-month lease is useful, but it does not fix the world with notice of it under that Explanation, and this trap is set out in [The Interpretation Clause: Attestation, Notice and the Words the Act Runs On].

The advantage of registering when you need not: section 50

Section 50 gives the practical reason a party might register voluntarily. Every document of the kinds mentioned in section 17(1)(a) to (d) and section 18(a) and (b), if duly registered, takes effect as regards the property comprised in it against every unregistered document relating to the same property, and not being a decree or order, whether or not the unregistered document is of the same nature.

So a registered instrument beats an unregistered one dealing with the same property. Note that section 50(1) picks up clauses (a) and (b) of section 18, not the whole of it, so the advantage attaches to the optional classes that correspond to the compulsory ones.

Sub-section (2) excludes leases exempted under the proviso to section 17(1), documents within section 17(2), and registered documents which had no priority under the law in force when the Act commenced.

A worked example

Rukmini is dealing with property at Osmanabad.

She takes an eleven-month tenancy of a shop. Registration is optional under clause (c). She may register it, and if she does, section 50 gives it precedence over any unregistered document relating to the same shop.

She makes a will of her house. Optional under clause (e), and by section 27 it may be presented or deposited at any time. It is never compulsory.

She sells her tractor by a written instrument. Movable property, so optional under clause (d); section 17 does not reach movables.

She takes an assignment of a decree worth Rs. 80 relating to land. Optional under clause (cc), the value being under a hundred rupees.

She enters into a family arrangement recording existing rights but creating none. If it creates, declares, assigns, limits or extinguishes nothing, it falls outside section 17 and is optional under clause (f).

She registers the eleven-month tenancy and later buys the shop. Registering it did not fix the world with notice under Explanation I to section 3 of the Transfer of Property Act, because that Explanation needs a transaction required by law to be registered. But under section 50 the registered tenancy prevails over any unregistered dealing with the shop.

What it does NOT mean

Optional does not mean useless. Section 50 gives a registered document precedence over unregistered ones.

A will is never compulsorily registrable, and may be presented or deposited at any time.

Section 17 does not cover movable property at all, so instruments dealing with movables are always optional.

Voluntary registration does not attract Explanation I notice, which requires the transaction to have been one the law required to be registered.

Gifts of immovable property are not in section 18, being always compulsory.

There is no category of documents that cannot be registered. Clause (f) sweeps up everything section 17 does not compel.

Distinctions

Quick revision

• s.18 is permissive: (a) interests in immovable property under Rs. 100, other than gifts and wills; (b) receipts for such consideration; (c) leases not exceeding one year and leases exempted under s.17; (cc) transfers of decrees, orders or awards under Rs. 100; (d) instruments dealing with movable property; (e) wills; (f) all other documents not required by s.17.
• A will is never compulsorily registrable and may be presented or deposited at any time, s.27.
• Sections 17 and 18 together leave no unregistrable category.
• s.50: a duly registered document of the kinds in s.17(1)(a) to (d) and s.18(a) and (b) prevails over every unregistered document relating to the same property, whatever its nature; subject to the exclusions in sub-section (2).
• Voluntary registration does not attract Explanation I notice under s.3 of the Transfer of Property Act.

Test yourself

1. Give three classes of document that may optionally be registered. Instruments dealing with interests in immovable property of a value less than one hundred rupees, other than gifts and wills; leases for a term not exceeding one year; wills; instruments dealing with movable property; and all other documents not required by section 17 to be registered.

2. Must a will be registered? No. A will is never compulsorily registrable, section 17(1)(b) being confined to non-testamentary instruments, and section 27 allows it to be presented for registration or deposited at any time.

3. What is the effect of clause (f)? It makes the section a complete residual permission, so that any document not required by section 17 to be registered may nevertheless be registered. There is no class of document that cannot be registered.

4. Why might a party register a document he need not register? To obtain the advantage of section 50, by which a duly registered document takes effect as regards the property against every unregistered document relating to the same property, and to obtain the general benefits of a public record.

5. Does registering an optional document fix the world with notice under the Transfer of Property Act? No. Explanation I to section 3 of that Act applies only where the transaction was required by law to be effected by a registered instrument and has been so effected.

6. Are instruments dealing with movable property compulsorily registrable? No. Section 17 does not deal with movable property, and section 18(d) makes such instruments optional.