The Supreme Court has held that no land transaction would attain finality unless it was duly registered and no sale deed of land would get a back-dated finality by its registration subsequently.
The court said that a transaction in land would only be complete on the date of the registration of the sale deed.
In its ‘inescapable conclusion’, a bench of Justice P. Sathasivam and Justice B.S. Chauhan said the sale executed between the seller and the buyer in respect of a land ‘could not be termed as a complete sale until the document got registered’. The judgment, delivered Friday, was only made available Thursday.
The apex court set aside the verdict of the Punjab and Haryana High Court which had upheld the trial court verdict that a sale deed becomes effective on the date of its execution as its registration relates to the date of its execution. Thus the trial court held that a suit challenging the transaction in land would not invite the doctrine of lis pendens (Latin for suit pending) if it is filed between the execution of sale deed and its registration.
Dismissing the conclusions of the trial court, Justice B.S. Chauhan, speaking for the bench, said that if in the course of the execution of a sale deed and its registration, a suit challenging that transaction has been instituted, then it would attract the doctrine of lis pendens.
The apex court said that section 47 of the Registration Act, 1908, provides that registration would relate back to the date of execution of the sale deed but it would not grant finality to the sale deed retrospectively (from the date of execution of sale deed).
The case was of Mam Chand (now dead) of Asraka Majra village in Haryana’s Rewari district, who mortgaged his 22 kanals (approximately 1.09 hectares) of land to one Har Narain (now dead) for Rs.7,000 in 1970.
Subsequently he sold eight kanals (approximately 0.39 hectares) to Har Narain for Rs.7,500. Mam Chand got Rs.200 as earnest money and the rest was adjusted against the mortgaged land.
However, Mam Chand then sold his land to five people (all respondents in the case) Aug 2, 1971 and this sale deed was registered on Sep 3, 1971. Har Narain filed a suit Aug 10, 1971 seeking to restrain Mam Chand from alienating him from the said lands. This suit was dismissed Sep 4, 1971.
Besides other grounds for dismissing the suit, the trial court had held that the sale deed deemed to have come into force Aug 2 as its registration Sep 3 relates back to the date of the execution of sale.
Thus the trial court held that since the sale deed became effective Aug 2 and the suit by Har Narain was filed on Aug 10, the transaction did not attract the doctrine of lis pendens.
Setting aside the verdict of the high court and the lower courts, the apex court restored the eight kanals of land bought by Har Narain to his legal heirs. The legal heirs of Mam Chand were directed to pay the amount he received for the sale of these lands plus 10 percent interest.
The court said that legal heirs of Mam Chand would be entitled to the rest of the land in the wake of quashing of the sale of the land to five respondents.