In the recent decision of the Bombay High Court given on June 24, 2015, in the case of Nestor Builders and Developers Pvt. Ltd and Anr. v. The State of Maharashtra and Ors., it was held that when the delay on the part of the party presenting the document for registration beyond the prescribed period under the Indian Registration Act (“Act”) was bonafide and not intentional and was on account of a genuine cause beyond the control of such party, then it can still be accepted for registration beyond the prescribed period.
As per provisions of section 23 of the Act, a document is required to be presented for registration within 4 months from the date of its execution. As per provisions of section 25 of the Act, if, owing to urgent necessity or unavoidable accident, in case there is a delay in presentation of document beyond 4 (four) months and such delay does not exceed 4 months, then, the document shall be accepted for registration. However, in such case, the Registrar may direct payment of a fine of a maximum of 10 (ten) times the amount of the proper registration-fee.
In other words, as per provisions of the Act, if a document is presented for registration within 4 months of its execution, the same would be registered with regular registration fees. But, if it is presented within 8 (eight) months (i.e. 4 months of delay after the expiry of initial 4 months) from the date of execution, then it shall be registered with fine.
A deed of conveyance was executed between one A.H.Wadia Trust and the petitioners pursuant to which a property situated in Andheri was transferred in favour of the petitioners in April 2012. On 11 May 2012 the petitioners lodged the said Deed for adjudication in the office of the Collector of Stamps (“Collector”) for determination of the stamp duty payable on the said document under the provisions of the Maharashtra (Bombay) Stamp Act.
In view of the pending adjudication proceedings before the Collector for determination of market value of property, the aforesaid Deed could not be registered within 4 months as prescribed under the Act. The adjudication was completed and order was passed on 18th February 2013.
The petitioners thereafter took steps to get the document registered by online registration but the online registration form was not accepted by the computer as the document was executed more than 8 (eight) months back and hence in view of the limitation of 4 (four) months as prescribed under Section 23 of the Act, same could not be accepted for registration.
The petitioners, therefore, addressed a letter to the Sub registrar explaining that the delay in lodging the said Deed for registration was not intentional but it was due to the delay by the Collector to adjudicate the stamp duty payable on the said document; and hence, it was beyond the control of the petitioners to lodge the said document for registration during the prescribed period of 4 months. However, the concerned officers expressed their inability to accede to petitioners’ request and hence they filed a writ petition in the Bombay High Court.
Judgment of the Bombay High Court
Based on the facts, the Court noted that the delay in registration of the said Deed was not due to the fault of the petitioners or intentional but it was on account of the delay in adjudication by the Collector; and that the petitioners were in a position to present the document for registration only after the final adjudication order was passed by the Collector. It was noted that the petitioners had diligently pursued the adjudication proceedings before the Collector.
Therefore, as per provisions of section 25 of the Act, as the delay in presenting the document for registration by the petitioners beyond the prescribed period was bonafide and not intentional, the document could be accepted for registration beyond the prescribed period. The Court held that a legal right accrued to the petitioners to get the document registered as per the provisions of the Registration Act cannot stand defeated when such reasons exist which are beyond the control of the party presenting the document for registration.
Our Analysis & Comments
The aforesaid judgment of the Bombay High Court is commendable. A key takeaway from the judgment is that even when the delay in presenting the document for registration exceeds 8 months, the document shall still have to be registered by the authorities without levying any fine in the event the delay is justified / unavoidable / unintentional / beyond control of the executing parties.
While the Court has properly held that the parties should not suffer / be penalised due to the fault of the authorities, however, neither the provisions of section 25 of the Registration Act, nor any of the State amendments to the said section contain relief / remedial provisions in cases where the delay in registration exceeds 4 months due to unavoidable circumstances or urgent necessities.
The aforesaid judgment also warrants modifications to the online registration systems / processes enabling the parties to make belated presentments for registration (i.e. after the expiry of 8 months from the date of execution) on providing explanations for the delay.
About Bulwark Solicitors
Bulwark Solicitors is a law firm pioneered by Solicitor Chirag Sancheti and Advocate Deep Shridharani. The firm has expertise in the areas of both Litigation and non-Litigation. Under the non-litigation Law practice, the firm practices in the areas of Corporate Law, Intellectual Property Law, Bankruptcy & Insolvency Law, Competition Law, Real Estate and Conveyancing and DTAA Advisory. Further, under Corporate Law area, we practice Company Law, Securities Law, Mergers and Amalgamations, Private Equity and Venture Capital Investment Transactions, Legal Due Diligence and Foreign Exchange Management Law.