THE HON’BLE SRI JUSTICE BILAL NAZKI THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE G.CHANDRAIAH WRIT PETITION Nos. 9512 of 2003; 22257, 22298, 23005 and 23088 of 2004; 1082, 3679, 12958, 21356, 21357, 24962, 24972, 25661, 25662, 25663, 25664, 25665, 25666, 26148 and 26149 of 2005; 879, 880, 881, 882, 979, 980 and 981 of 2006 Date: 24-10-2006. Between : Yanala Malleshwari & others. …..Petitioners And Ananthula Sayamma & others. …..Respondents. For the petitioners : S/Sri.M.R.K.Chowdary, K.Ramakrishna Reddy, N.Subba Reddy, V.Venkata Ramana, J.Prabhakar and H.Venugopal. For the Respondents :S/Sri.Mahamood Ali, Y.Srinivasa Murthy and M.S.Ramachandra Rao. < Gist: > Head Note: ? CITATIONS: 1. 2004 (1) ALT 174 2. AIR 1950 ALLAHABAD 632 3. AIR 1927 ALLAHABAD 361 4. AIR 1991 AP 50 5. AIR 1974 SC 1924. 6. 12 Bom.L.R.940. 7. (2004) 8 SCC 556 8. (2003) 5 SCC 705. 9. AIR 2005 SC 3401. 10. AIR 1995 PUNJAB & HARYANA 86. 11. AIR 1966 MP 20. 12. AIR 1961 SC 787 13. 2001 (1) ALD 86 C/15 THE HON’BLE SRI JUSTICE BILAL NAZKI THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE G.CHANDRAIAH WRIT PETITION Nos. 9512 of 2003; 22257, 22298, 23005 and 23088 of 2004; 1082, 3679, 12958, 21356, 21357, 24962, 24972, 25661, 25662, 25663, 25664, 25665, 25666, 26148 and 26149 of 2005; 879, 880, 881, 882, 979, 980 and 981 of 2006. Date: 24-10-2006. Between : Yanala Malleshwari & others. …..Petitioners And Ananthula Sayamma & others. …..Respondents. THE HON’BLE SRI JUSTICE BILAL NAZKI THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE G.CHANDRAIAH WRIT PETITION Nos. 9512 of 2003; 22257, 22298, 23005 and 23088 of 2004; 1082, 3679, 12958, 21356, 21357, 24962, 24972, 25661, 25662, 25663, 25664, 25665, 25666, 26148 and 26149 of 2005; 879, 880, 881, 882, 979, 980 and 981 of 2006. COMMON JUDGMENT : (Per Hon’ble Justice Bilal Nazki) This batch of writ petitions raise same question of law and fact. Facts in different writ petitions have been noted in the opinion of my brother Mr.Justice V.V.S.Rao and I will not be dealing with the facts in detail. The question is, whether a person who sells his property and executes a sale deed and gets it registered in terms of the Registration Act, 1908 (hereinafter referred to as ‘the Registration Act’), could unilaterally cancel such sale deed and whether Sub-Registrar was bound to register such a deed. In writ petition No.14007 of 2004, the registration of cancellation of gift deed by Sub- Registrar, Karimnagar was challenged. A learned Single Judge of this Court, relying on an earlier judgment of Single Judge in Property Association of Baptist Churches v. Sub-Registrar, Jangoan[1], dismissed the writ petition holding that a party aggrieved by registration of a document, had to file a suit. This judgment was challenged in writ appeal No.1486 of 2004. The Division Bench considered the question whether registration of a cancellation deed could be effected by the registering authority. The Division Bench however, by its order dated 11.10.2004, affirmed the order of the learned Single Judge and dismissed the appeal. In that judgment, it was observed that the Registration Act does not enable the registering authority to make an enquiry before registering a cancellation deed. Therefore dispute, if any, between the parties, was a dispute essentially in terms of private law which could only be agitated in common law proceedings by seeking a declaration under the Specific Relief Act. Thereafter, writ petition Nos.23005 and 23088 of 2004 came up before another Judge. In these writ petitions also, registration of cancellation deeds was challenged. The learned Single Judge felt that various legal questions were not brought to the notice of the Division Bench when it decided writ appeal No.972 of 2004 and referred the matters to another Division Bench. The Division Bench referred the matters to the Full Bench. This is the background in which these matters have come up before us. The learned Single Judge in writ petition Nos.23005 and 23088 of 2004, was of the opinion that the law laid down by this Court in writ appeal No.1486 of 2004 was sought to be applied to sale deeds whereas registration of cancellation of gift deed was the subject matter in writ appeal No.1486 of 2004. The learned Single Judge in his reference order, observed— “In this regard, it needs to be noticed that a gift deed, on the one hand, and a sale deed, on the other, stand on different footing. Under Section 126 of the Transfer of Property Act, it is competent for a Donor, to suspend or revoke a gift deed, executed by him, whereas similar facility is not available, in case of a sale deed. Gift is a transfer, without any monetary consideration, whereas under a sale transaction, mutual rights and obligations exist, as between a Vendor and Vendee. Section 31 of the Specific Relief Act prescribes the manner, in which a document can be cancelled. What is required to be done through the decree of a Court, cannot be permitted to be undertaken by a party by himself.” And finally observed – “This Court is of the view that, if sale deeds, under which valuable properties are conveyed, are permitted to be cancelled unilaterally, it would not only result in several complications, unnecessary litigations, and hardship to the affected parties, but also bring about situations, having far-reaching implications and unrest in the Society. These aspects do not appear to have been brought to the notice of the Division Bench, which disposed of W.A.No.972 of 2004. It is felt that the matter needs to be examined either by another Division Bench, or, if necessary, by a Full Bench.” When the matter came up before the Division Bench, the Division Bench, by a very short order, referred the matter to the Full Bench as it thought that the questions raised were of public importance and the earlier Division Bench had not discussed all the issues which were involved. My brother Mr.Justice V.V.S.Rao has written a detailed opinion and has come to a conclusion that writ petitions deserve to be dismissed. With due respects to my brother, I venture to draft an opinion which is not in conformity with the views of my brother. M/s.M.R.K.Chowdary and K.Ramakrishna Reddy, senior Advocates and N.Subba Reddy, V.Venkata Ramana, J.Prabhakar and H.Venugopal, learned counsel, have appeared for petitioners. The main thrust of their contentions is on the fact that the Registration Act has been enacted with a view to provide information to people, who may deal with property, as to the nature and extent of the rights, which, persons may have, affecting that property. They further contend that there would have been no need for having an Act like the Registration Act if it was not felt necessary that people should know and people should be able to find out whether any particular property with which they may be concerned, had been subjected to any liability or legal obligation. Therefore, the scheme of the Registration Act provides that one should give importance and solemnity to certain classes of documents by directing that they shall be compulsorily registerable and the general purpose of the Act appears to be to put on record somewhere the particulars of ownership of property where people can examine those particulars if they are interested in such properties. It also appears from the scheme of the Registration Act that the Act reduces the chances of fraud. It is further contended by the learned counsel for the petitioners that sale is governed by the provisions of Transfer of Property Act, 1882 (hereinafter referred to as ‘the TP Act’) and ‘sale’ is defined under Section 54 of the TP Act as, ““Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.” It further lays down that in case of such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, can only be made by a registered instrument, and Section 17 of the Registration Act makes a sale deed compulsorily registerable. Therefore, it is contended on behalf of petitioners that it is not the registration of the document which is sought to be cancelled by preparing cancellation deeds and getting them registered, in effect, what is sought to be done is cancellation of the sale itself, which is not permissible. Sale, by its definition in the TP Act, is a transfer of ownership in exchange of consideration, which means that there cannot be a unilateral sale. A person must be owner of the property and he should sell it to another person in exchange for a price paid or promised or part- paid or part-promised. There is no concept of a unilateral sale. Sale is always bilateral. It is true there can be many owners and many purchasers but sale is incomplete unless the document is registered, which is a requirement under Section 54 of the TP Act and also under Section 17 of the Registration Act. It is well settled that transfer of ownership means a transfer by a person of his rights and interests in the property in full and permanently. A transfer of a part only of such interests or for a particular period reserving the rest for the transferor himself is not a transfer of ownership. It has also been held by Courts that where a transfer is made for a price paid or promised and the deed is registered, a sale is duly effected and the propriety interest in the property passes. In this connection, reference can be made to (1) Sahadeo Singh v. Kuber Nath Lal[2], and (2) Kalyan v. Mt.Desrani[3]. This Court in Kutcherlakota Vijayalakshmi v. Radimeti Rajaratnamba[4], even went to the extent of saying that purchaser gets title as soon as the sale deed is registered even if the consideration is not paid and it further held that the remedy for the vendor was to claim consideration. The learned counsel for petitioners would further contend that if Section 17 of the Registration Act and Section 54 of the TP Act are read together, then the effect of registration of sale deed would be that the rights of the vendor get extinguished in the property for which he executes a sale deed and if the rights of a person are extinguished and he has no rights whatsoever left in the property, there arises no question of his executing a fresh deed cancelling the sale deed. Sale is not a unilateral act, but is a bilateral act. As a result of this bilateral act, the rights of the vendors in the property get extinguished and get transferred wholly to the vendee. Vendor is left with no rights vis-à-vis the property. Therefore, if any deed styled as ‘cancellation of sale deed’ is executed or registered, it would amount to fraud because, by such a deed, neither rights are extinguished nor created but has the potential of creating a mischief. The deed of cancellation of sale deed which is duly registered by the Sub-Registrar, does not confer in law any rights to the erstwhile vendors. These documents are only executed for the purpose of creating a mischief and blackmailing the vendees. It was submitted that these documents, after registration, are presented to banking authorities and are given publicity so that the bankers and the prospective purchasers entertain doubts about the title of the land and the vendees-the bonafide purchasers, find difficulty in raising finances, using the property or transfer the property. The argument of the other side is that the registration officer is bound to register any document, which is presented before him. He is not supposed to conduct an enquiry whether the document confers any right on the person who presents the documents for registration or who execute such a document. It is further contended that if the petitioners are aggrieved of registration of any document, the remedy available to them is to go to a civil Court and get a declaration. In the light of these submissions, this Court will have to see whether the registration authorities are duty bound to register such sham documents. Let us now see the provisions of the Registration Act. Section 17 of the Registration Act make certain documents compulsorily registerable. Section 18 of this Act mentions the documents, of which, registration is optional. Section 32 mentions the persons who can present the documents for registration. It lays down— “32. Persons to present documents for registration:-Except in the cases mentioned in Sections 31, 88 and 89, every document to be registered under this Act, whether such registration be compulsory or optional, shall be presented at the proper registration office :- (a) by some person executing or claiming under the same, or, in the case of a copy of a decree or order, claiming under the decree or order, or (b) by the representative or assign of such person, or (c) by the agent of such person, representative or assign, duly authorized by power-of-attorney executed and authenticated in manner hereinafter mentioned.” Section 49 lays down— “49. Effect of non-registration of documents required to be registered: -- No document required by Section 17 [or by any provision of the Transfer of Property Act, 1882], to be registered shall,-- (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered.” After having a glance over these provisions of the Registration Act, a glance at certain sections of the TP Act is also necessary. Section 54 has already been reproduced hereinabove. Section 4 of the TP Act lays down— “4. Enactments relating to contracts to be taken as part of Contract Act—The Chapters and sections of this Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872 (IX of 1872). [And Section 54, Paragraphs 2 and 3, 59, 107 and 123 shall be read as supplemental to the Indian Registration Act, 1908 (XVI of 1908)]” ‘Transfer of property has been defined under Section 5 as under— “In the following sections “transfer of property” means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, and one or more other living persons and “to transfer property” is to perform such act.” Section 8 of this Act lays down— “8. Operation of transfer—Unless; a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof. Such incidents include, where the property is land, the easements annexed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth; and, where the property is machinery attached to the earth, the movable parts thereof; and, where the property is a house, the easements annexed thereto, the rent thereof accruing after the transfer, and the locks, keys, bars, doors, windows, and all other things provided for permanent use therewith; and, where the property is a debt or other actionable claim, the securities therefor (except where they are also for other debts or claims not transferred to the transferee), but not arrears of interest accrued before the transfer; and, where the property is money or other property yielding income, the interest or income thereof accruing after the transfer takes effect.” Section 53 of TP Act lays down— “53. Fraudulent transfer :-- (1) Every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration. Nothing in this sub-section shall affect any law for the time being in force relating to insolvency. A suit instituted by a creditor (which term includes a decree- holder whether he has or has not applied for execution of his decree) to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor, shall be instituted on behalf of, or for the benefit of, all the creditors. (2) Every transfer of immovable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee. For the purposes of this sub-section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made. The purpose of noting down these provisions of TP Act and the Registration Act is to come to a conclusion as to whether a vendor retains any interest in the property which he sold and of which a sale deed was executed and registered. The answer is emphatic ‘no’. Therefore, in my view, when a person transfers all his rights, his rights in the property get extinguished and if he tries to get back the property, it has to be done by challenging the sale deed which he has executed and which is registered by the Sub-Registrar. Section 23 of the Indian Contract Act, 1872 (hereinafter referred to as ‘the Contract Act’) is applicable to the present controversy. It lays down that an agreement is void if it deviates the provisions of any law. It further lays down that consideration or object of an agreement is lawful unless it is forbidden by any law or is fraudulent or involves or implies injury to the person or property of another, or the Court regards it as immoral or opposed to public policy. Therefore, such a document, in my view, is a fraudulent document within the meaning of Section 23 of the Contract Act and as such, cannot be registered. It is even against public policy. ‘Public policy’ was defined by Supreme Court in Murlidhar Agarwal v. State of Uttar Pradesh[5]. In para 28, the Supreme Court discussed public policy vis-à-vis policy of law. Para 28 is reproduced hereunder— “28. The expression ‘public policy’ has an entirely different meaning from ‘policy of the law’ and one much more extensive. Nevertheless, the term ‘public policy’ is used by the House of Lords itself apparently as synonymous with the policy of the law or the policy of a statute (see Hollinshead v. Hazleton, 1916 AC 428). Yet it is clearly so used without intent to repudiate or disregard the distinction so clearly drawn in Egerton v. Brownlow, (1853) 4 HLC 1 at p. 105. It seems clear that the conception of public policy is not only now quite distinct from that of the policy of law but has in fact always been so except is some exceptional instances of confusion which have had no substantial effect on the general course of authority. See W.S.M. Knight, "Public Policy in English Law'', 38, Law Quarterly Rev., 207, at pp. 217-218. In para 30 of the judgment, it defined ‘public policy’ on the basis of the definition of Winfield as a principle of judicial legislation or interpretation founded on the current needs of the community. Para 30 is reproduced hereunder— 30. "Public policy'' has been defined by Winfield as "a principle of judicial legislation or interpretation founded on the current needs of the community''. (See Percy H. Winfield, "Public Policy in English Common Law'', 42 Harvard Law Rev. 76). Now, this would show that the interests of the whole public must be taken into account; but it leads in practice to the paradox that in many cases what seems to be in contemplation is the interest of one section only of the public, and a small section at that. The explanation of the paradox is that the courts must certainly weigh the interests of the whole community as well as the interests of a considerable section of it, such as tenants, for instance, as a class as in this case. If the decision is in their favour, it means no more than that there is nothing in their conduct which is prejudicial to the nation as a whole. Nor is the benefit of the whole community always a more tacit consideration. The courts may have to strike a balance in express terms between community interests and sectional interests. So here we are concerned with the general freedom of contract which everyone possesses as against the principle that this freedom shall not be used to subject a class, to the harassment of suits without valid or reasonable grounds. Though there is considerable support in judicial dicta for the view that courts cannot create new heads of public policy, see Gherulal Parakh v. Mahadeodas Maiya, 1959 Supp (2) SCR 406 at p. 440 = (AIR 1959 SC 781), there is also no lack of judicial authority for the view that the categories of heads of the public policy are not closed and that there remains a broad field within which courts can apply a variable notion of policy as a principle of judicial legislation or interpretation founded on the current needs of the community. See Dennis Lloyd, "Public Policy'', (1953), pp. 112-113. In para 31, the Supreme Court held that public policy does not remain static in any given community. It may vary from generation to generation and even in the same generation. Public policy would be almost useless if it were to remain in fixed moulds for all time. One of the arguments advanced by the respondents in this case, which has found favour with my brother Mr.Justice V.V.S. Rao, is that the remedy available to the petitioners is to go to a civil Court under the provisions of Specific Relief Act. The same argument can be used against the respondents in this case, who, if aggrieved of registration of a sale deed which they had executed, themselves should have gone to the civil Court for such a remedy. I do not agree with my learned brother that the writs are not maintainable, as the remedy to the petitioners is at common law by going to a civil Court. The effect of registration of a cancellation deed is against public policy and it will create a chaos if such deeds are allowed to be registered. The purpose of registration of a document is not only to see that the rights of the vendor are extinguished and rights of the vendee are created, but the purpose is much more than that. It has been consistently held by the Courts that the purpose of registration is to inform and give notice to the world at large that such a document has been executed. Registration of a document is a notice to all the subsequent purchasers or encumbrances of the same property. The doctrine of constructive notice can be extended to others besides subsequent purchasers or encumbrances, as has been held in Tatyarao Venkatrao Vase v. Puttappa Kotrappa[6]. Therefore, the effect of registration of a sale deed is not effecting the rights of the present petitioners alone, but that registration is a notice to everybody in the world that the property belongs to the petitioners and if such a right is violated by subsequent registration of a cancellation deed by the Sub-Registrar, it cannot be said that writ petitions are not maintainable. If the present practice of cancelling the duly registered sale deeds as prevalent in the State of Andhra Pradesh is approved, then, the whole public policy with regard to registration of documents would get vitiated. Registered sale deeds executed duly, have some sanctity and people at large rely on them to test the title of a particular person to a particular property. If a person executes a sale deed and registers it today and then on the second day gets it cancelled, it will be simply a chaos. The object and purpose of registering the immovable