ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED versus S. P. VELAYUTHAM & ORS

Citation: [2022] 17 S.C.R. 637 · Decided: 04-05-2022 · Supreme Court of India · Bench: HEMANT GUPTA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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[2022] 17 S.C.R. 637
637
ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED
v.
S. P. VELAYUTHAM & ORS.
(Civil Appeal Nos. 2752-2753 of 2022)
MAY 04, 2022
[HEMANT GUPTA AND V. RAMASUBRAMANIAN, JJ.]
Constitution of India – Art.226 – Jurisdiction under – Failure
of registering authority to perform its duties – The borrower
defaulted in repayment of the loan pursuant to which the Bank issued
a demand notice u/s 13(2) of the Securitisation Act - Bank which
already initiated proceedings under the Securitisation Act, assigned
the debt and the collateral security in favour of the appellant - By
deed of PoA, the power of sale is said to have been conferred upon
the agent, but this was un-registered - On the basis of deed of PoA,
which did not confer a power of sale, respondent sold the property
to his son A - The appellant filed a writ petition seeking a declaration
that the act of the sub-registrar in registering the sale deed was null
and void – Single Judge allowed the petition on the ground that
there was utter failure on the partof the Registering Authority to
follow the mandate of law as prescribed in Sections 32 to 35 of the
Registration Act, 1908 - Division Bench held that the appellant is
guilty of violating the order passed by Supreme Court in the
proceedings arising out of the order of the Sub-Divisional Magistrate
under Section 145 of the Cr.P.C- Whether the invocation of the writ
jurisdiction of the High Court by the appellant was right, especially
when civil suits at the instance of third parties are pending - Held:
If a party questions the very execution of a document or the right
and title of a person to execute a document and present it for
registration, his remedy will only be to go to the civil court - But
where a party questions only the failure of the Registering Authority
to perform his statutory duties in the course of the third step, it
cannot be said that the jurisdiction of the High Court under Article
226 stands completely ousted - When a High Court, in exercise of
its jurisdiction under Article 226 finds that there was utter failure
on the part of the Registering Authority to stick to the mandate of
law, the Court merely cancels the act of registration, but does not
declare the very execution of the document to be null and void -
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SUPREME COURT REPORTS
[2022] 17 S.C.R.
Examining whether the Registering Authority did something in the
manner required by law or otherwise, is certainly within the
jurisdiction of the High Court under Article 226 - Therefore, the
Single Judge rightly applied the law and allowed the writ petition
filed by the appellant, but the Division Bench got carried away by
the sound and fury created by the contesting respondents.
Registration Act, 1908 - ss. 32, 33, 34 & 69(1) – Tamil Nadu
Registration Rules - R u l e s 4 6 , 4 8 , 4 9 , 5 2 - A careful look at Sections
32 and 33 will show that while speaking about PoA, these provisions
do not use the word “registration” - While Section 32(c) uses the
words “executed and authenticated”, Section 33(1) uses the words
“recognised” and “authenticated” - Therefore it is clear that the
word “authenticated” is not to be understood to be the same as
“registered” - Whenever an agent is authorised to execute a
document and present the same for registration and he accordingly
executes the document in terms of PoA, he becomes the actual
executant in so far as the Registering Authority is concerned and
that therefore he becomes entitled under Section 33(a) to present it
for registration.
Allowing the appeals, the Court
HELD: 1.1 Actually, the registration of a document comprises
of three essential steps among others. They are, (i) execution of the
document, by the executant signing or affixing his left hand thumb
impression; (ii) presenting the document for registration and
admitting to the Registering Authority the execution of such
document; and (iii) the act of registration of the document. In cases
where a suit for title is filed, with or without the relief of
declaration that the registered document is null and void, what
gets challenged, is a combination of all the aforesaid three steps
in the process of execution and registration. The first of the
aforesaid three steps may be challenged in a suit for declaration
that the registered document is null and void, either on the ground
that the executant did not have a valid title to pass on or on the
ground that what was found in the document was not the signatu

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