In this article, Smita Singh discusses on documentation essential for acquiring valid transfer of title of immovable property through public auctions.
One of the modes of acquiring title over immovable property is through a public auction conducted by Civil or Revenue Officers. Transfer of title through such auction normally involves acceptance and confirmation of highest bid by the concerned Civil or Revenue Officer and issuance of Certificate of Sale to the purchaser.
Whether a certificate of Sale requires registration
Section 17(1) of the Registration Act, 1908 enumerates the documents that are required to be compulsorily registered. These include inter alia instruments of gift of immovable property; instruments creating, decelerating, assigning, limiting or extinguishing any right, title or interest in immovable property etc. Section 49 of the Registration Act provides that a document required to be registered, unless it is so registered, shall not affect any immovable property comprised therein and also will not be received as evidence of any transaction affecting such property.
Section 17(2) of the Registration Act, however, exempts the requirement of compulsory registration in respect of inter-alia any Certificate of Sale granted to the purchaser of any property sold by public auction by a civil or revenue officer. Therefore, any Certificate of Sale issued by civil / revenue officer in respect of property sold by public auction is not required to be compulsorily registered.
Filing of certificate of Sale with Registering Authority
Section 89(4) of the Registration Act requires every Revenue Officer granting a Certificate of Sale to a purchaser of immovable property sold by public auction, to send a copy of the Certificate to the jurisdictional Registering Officer and such officer is required to file the copy in Book No.I.
Difference between registration under Section 17(1) and filing of copy under Section 89(4)
In Shanti Devi L Singh vs. Tax Recovery Officer & Ors. [MANU/SC/0476/1990], the Supreme Court considered whether the filing of a copy of Certificate in Book No. I under Section 89 is same as registration of the document under section 17 or is a distinct concept. The Court noticed the following difference between the two processes:
- i) Under section 17 it is the original of a document that is registered whereas, under section 89(4), only copies or memoranda are filed.
- ii) The executant of a document to be registered has to present it for registration and go through the attendant and subsequent prescribed processes. A copy to be filed under Section 89 is merely transmitted to the Registering Officer for filing. The procedure of presentation is dispensed in case of sale certificates, possibly because they are issued by public authorities discharging their official duties.
iii) Additional particulars relevant to a document admitted for registration are required to be endorsed thereon as per Sections 58 and 59 of the Registration Act. This requirement does not apply to a copy filed under section 89(4).
- iv) When a document is registered, the document in entirety is copied to the relevant book and the original document is returned to the person who presents the document with necessary endorsements. This requirement is absent in the case of a copy which is just filed.
- v) Where a document is registered, a certificate of registration is issued which is admissible to prove the due registration of the document.
In Shanti Devi L Singh case Supreme Court further held that the two processes being different, the purchaser at Court or revenue sale is under no disadvantage on account of lack of registration. It held that Certificate of Sale not being a compulsorily registrable document, the transfer of title is not vitiated by non-registration of the Sale Certificate.
In Yamin & Ors. vs. Mohammed Shafiq [MANU/UP/0516/2004] Allahabad High Court reiterated that a Sale Certificate issued by the revenue officer is not required to be compulsorily registered.
The Andhra Pradesh High Court in T. Yogayya Naidu vs. Mohammed Latifulla Sharif [MANU/AP/0377/2009] noticing the difference between registration under Section 17(1) and filing of copy under Section 89(4), held that in respect of the Sale Certificate issued by revenue officer in public auction, it could not be insisted that Sale Certificate must be registered.
Narandas Karsondas vs. S.A. Kamtam and Anr. [MANU/SC/0363/1976] In case of auction other than by Civil or Revenue Officers, however, the exemption from registration is not available. In such cases, the transfer would complete and ownership would pass only by a registered instrument of conveyance.
Effect of Sale certificate issued in a court auction
Allokam Peddabbayya and Ors. vs. Allahabad Bank and Ors. [MANU/SC/0700/2017] On confirmation of sale and issuance of sale certificate, the ownership of the property gets transferred to the auction purchaser. The Supreme court in Sagar Mahila Vidyalaya vs. Pandit Sadashivarao Harshe & Ors. [(1991) 3 SCC 588], considering Order 21 Rule 92 read with Section 65 of the Code of Civil Procedure, held that once an order is made confirming the sale, the title of the auction purchaser relates back to the date of sale; the title in the property thereafter vests in the auction purchaser; the issue of Sale Certificate in favour of auction purchaser though mandatory, the grant of Certificate is mere ministerial act and not judicial.
In B. Arvind Kumar vs. GoI & Ors. [(2007) 5 SCC 745] the Supreme Court reiterated that when a property is sold in public auction in pursuance of an order of the Court; the bid is accepted, and the sale is confirmed by the Court in favor of the purchaser, the sale becomes absolute and title vests in the purchaser. A Sale Certificate is issued to the purchaser only when the sale becomes absolute. The Sale Certificate is merely an evidence of such title.
The Bombay High Court in Aatam Gems vs. Oriental Bank of Commerce [MANU/MH/1004/2008] restated that when an auction purchaser deposited the entire sale consideration and the objections to the sale have been dealt with and disposed of in accordance with law and the Competent Authority confirmed the sale, an absolute right vests in the auction purchaser and he is entitled to issue of such sale certificate.
Stamp duty payable on sale certificates
Shree Vijayalakshmi Charitable Trust vs. Sub-Registrar [MANU/TN/1861/2012] Sale certificate issued by Civil or Revenue Officers is exempted from the requirement of compulsory registration, but it is not exempted from payment of stamp duty.
Bhupendra Singh vs. Board of Revenue, U.P. [MANU/UP/2007/2012] Non-payment of duty would render the document inadmissible in evidence till penalty is paid. The document could also be impounded.
From the above, it emerges that in case of sale of immovable property in an auction by Civil or Revenue Officer, the title in the property passes to the purchaser on confirmation of the bid and issuance of Sale Certificate. Such Sale Certificate is not required to be compulsorily registered. Though the Sale Certificate Is required to be sent to the registering officer for filing in Book-I, the procedure is not similar to the requirement of compulsory registration. Failure to send a copy of the Sale Certificate to the registering officer or failure of the registering authority to file the document in Book-I, may not vitiate the title of the purchaser at court auction.