India: Supreme Court Elucidates Registration Act: Production Of Original Copy Of Power Of Attorney Not Mandatory For Sale & Registration Of Property

The Hon'ble Supreme Court in its recent judgment has clarified the interpretation of the Registration Act, 1908 ("Reg Act") in terms of production of original Power of Attorney ("PoA") to facilitate sale of property. It was strongly observed that there is no need to produce the original copy of the PoA to sell the property and register the same, merely producing a copy of the PoA shall suffice.

This fair warning comes to light through the case of Amar Nath Vs Gian Chand¹ which was adjudged by a bench of Justices K.M. Joseph and P.S. Narasima in January 2022. It is a common misconception to assume that once the original PoA is not in possession of one of the holders, the said holder cannot execute the same. What is to be carefully looked at here is that, cancelling a PoA through written agreement is a valid ground for argument; however, oral cancellation cannot stop the PoA holder from using a copy of the same to effectuate sale of property. This brings us to the analysis of the case, the misinterpretation of the lower courts and clear warning to the interpreters of the Reg Act.

Brief matrix of the case in the picture

The owner of the property ("plaintiff") entered into an agreement with the first defendant to sell his property for an amount of Rs.55,000/- back in 1987. Due to his unavailability in the city, the plaintiff executed a special PoA in favour of the second defendant for selling the property in the same amount.

As the negotiation fell through in view of the first defendant not being able to arrange the money, the second defendant to whom the PoA was executed, surrendered the original to the plaintiff, and the plaintiff told the first defendant that the same stood cancelled.² Thus, the plaintiff assumed that the second defendant could not effectuate the sale in the absence of the original PoA. However, the erstwhile PoA holder applied for a copy, on the basis of which he sold the same property to first defendant for an amount of Rs.30,000. The second defendant got the sale registered from the Registrar's office with the copy he possessed.

Aggrieved, the plaintiff approached the trial court but it dismissed the suit which was further upheld by the first appellate court as well. Allowing the appeal, the Himachal Pradesh High Court cancelled the registration while observing that the non-production of the original copy of the PoA was fatal to the sale and further observed that the Registering Authority erred in ensuring the true copy of the PoA under Section 18³ of the Reg Act.

The SC set aside the HC order and said that the registration was valid, as oral cancellation of PoA has no validity before the law and that for registration of sale of land, the PoA holder merely is required to produce a copy of the document and that original was not necessary. ⁴

SC's interpretation of the provisions of the Reg Act

Section 18: Bluntly disagreeing with the High Court's version, the Supreme Court noted that Section 18 in question contemplated the production of the original documents which are to be registered, not in essence referring to a true copy of the PoA. The purpose behind the enactment of Section 18A⁵ is to ensure the copying process is accelerated and not the production of a true copy of the PoA.

Section 32 & 33: Section 32 deals with the persons who are eligible to present documents for registration before the proper registration office.⁶ The plaintiff contended that under the provisions of Sections 32 and 33 of the Reg Act, the original PoA ought to have been produced. The Apex Court noted that Section 32 (a) enables a PoA holder to execute a document when empowered with the same. Clause (b) talks about the representative or assignee of 'such a person'⁷ that is intended to include persons covered in clause (a). Similarly, Section 32 (c) speaks about agents of 'such persons', indicating that the agents shall encompass persons covered in Section 32(a). Section 33 by its very heading states power of attorney recognizable for the purpose of Section 32. Section 32(c) must alone be read with Section 33 of the Act. Thus, when Section 32(c) of the Registration Act declares that a document, whether it is compulsorily or optionally registrable, is to be presented, inter alia, by the agent of such a person, representative or assignee, duly authorised by power of attorney, it must be executed and authenticated in the manner and hereinafter mentioned immediately in the next following section.⁸

Section 34: This section talks about the inquiry before registration before the registering officer. It essentially declares that no document shall be registered under the Reg Act unless the persons executing such document appear before the Registering Authority before time allowed under Sections 23, 24, 25 and 26. The section empowers the Registering Officer to enquire whether or not such document was executed by the persons by whom it purports to have been executed.⁹ Therefore, there is really no need for production of an original document when such document is presented for registration by a person standing in the shoes of the second defendant.

To put in simple words, an inquiry contemplated under the Registration Act, cannot extend to question as to whether the person who executed the document in his capacity of the power of attorney holder of the principal, was indeed having a valid power of attorney or not to execute the document or not.¹⁰

Section 35: As said by Justice Joseph, this section gives authority to the registering authority to satisfy himself that the person appearing before him is the one represented to be. Therefore, such satisfaction cannot be questioned further.

By analysing such the above provisions, the Hon'ble Supreme Court undoubtedly rejected the argument of the plaintiff. Although he orally cancelled the PoA, however also accepted that he did not intimate the Sub-registrar's office about the same.

Conclusion

The upshot of the above discussion is that the High Court's judgment cannot be sustained. This judgment puts things in perspective with respect to the powers exercised by the registering authority, the appellate courts and the parties involved in the PoA contract. This also encourages people to be more careful and comprehensive while authorizing a person to execute certain documents on one's behalf. The notion behind PoA is to enable a person to legally perform actions on one's behalf and the same may be safeguarded with clear terms and written intimation of changes if any. This landmark judgment is a product of legal predicaments that went on for many decades and there is a lesson to learn to avoid any in your account.

Footnotes

1. Amar Nath v. Gian Khan, Civil Appeal no.5797 of 2009

2. LIVE LAW, https://www.livelaw.in/top-stories/registration-act-no-inquiry-into-whether-poa-holder-had-valid-power-of-attorney-supreme-court-amar-nath-vs-gian-chand-190685 (last visited Jan. 31, 2022).

3. Section 18, Registration Act, 1908

4. TIMES OF INDIA, https://timesofindia.indiatimes.com/india/original-poa-not-needed-copy-enough-to-sell-property-supreme-court/articleshow/89231055.cms (last visited Jan. 31, 2022).

5. Registration Act, 1908, S 18-A, No. 16, Acts of Parliament, 1908 (India).

6. Supra 1.

7. Registration Act, 1908, S 32B, No. 16, Acts of Parliament, 1908 (India).

8. Supra 2.

9. Supra 1.

10. Supra 1.

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