Krishna Kant Mishra vs State Of U.P. & Another
2014 Latest Caselaw 2188 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 

 
Chief Justice's Court
 

 
Case :- PUBLIC INTEREST LITIGATION (PIL) No. - 26711 of 2014
 

 
Petitioner :- Krishna Kant Mishra
 
Respondent :- State Of U.P. & Another
 
Counsel for Petitioner :- Siddharth Nandan
 
Counsel for Respondent :- C.S.C.
 

 
Hon'ble Dr. Dhananjaya Yeshwant Chandrachud, Chief Justice
 
Hon'ble Dilip Gupta, J.

The petitioner states in his petition under Article 226 of the Constitution that he is a prospective purchaser of a plot at George Town, Amar Nath Jha Marg, Allahabad. The owner of the plot is stated to have executed a power of attorney to sell the property. The petitioner has stated that he approached the authorities to verify the authenticity of the power of attorney by an application dated 2 May 2014. In response to the application, the petitioner was informed that powers of attorney are placed in Book-IV and do not constitute public documents available for inspection in view of the provisions of Regulation 254 of the Registration Manual. A circular dated 3 July 2013 was issued to the effect that powers of attorney which relate to immovable property would, in accordance with the provisions of section 51(2) of the Registration Act 1908, be placed in Book-I. Subsequently, on 12 February 2014, the Principal Secretary (Stamp & Registration) issued a communication to the Inspector General of Registration to the effect that the earlier circular dated 3 July 2013 was not in accordance with the legal position in view of the advice which was tendered by the Law Department. The petition has been filed in order to challenge the communication of the Principal Secretary dated 12 February 2014 and for a mandamus to the respondents to provide details of the power of attorney in relation to the plot in question in respect of which the petitioner claims, as a prospective purchaser, to be interested in negotiating a transaction.

Before we appreciate the contentions of the petitioner, at the outset, it would be necessary to advert to some of the provisions of the Registration Act, 1908 which have a bearing on the issues which are raised in these proceedings.

Section 17 deals with documents of which registration is compulsory. Section 18 provides for documents of which registration is optional. Section 17(1), which is material to the present discussion, provides that a document shall be registered, if the property to which it relates is situate in a district in which, and if they have been executed on or after the date on which Act No.XVI of 1864, or the Registration Acts of 1866, 1871 or 1877, or the present Act of 1908 came into force if the document meets one of the descriptions set out therein which includes the following:-

"17(1)(b). Other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immoveable property."

Clause (b) of section 17(1) refers to non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish any right, title or interest, whether vested or contingent, to or in immovable property. This may be in present or in future and the right, title or interest may be vested or contingent.

Section 18 which provides for documents of which registration is optional refers in clause (f) to "all other documents not required by Section 17 to be registered."

A power of attorney is defined in section 1(a) of the Powers of Attorney Act, 1882 to include any instrument empowering a specified person to act for and in the name of the person executing it. Black's Law Dictionary defines the term "power of attorney" as follows:-

"An instrument in writing whereby one person, as principal, appoints another as his agent and confers authority to perform certain specified acts or kinds of acts on behalf of principal. Complaint of Bankers Trust Co., C.A.Pa., 752 F.2d 874m 885. An instrument authorising another to act as one's agent or attorney. The agent is attorney in fact and his power is revoked on the death of the principal by operation of law. Such power may be either general (full) or special (limited)"1

A power of attorney is thus a written instrument by which one person who is described as a principal appoints another as an agent and confers authority on him to perform certain specified acts on his behalf. The acts of the agent or donee bind the person who confers the authority.

Section 2 of the Powers of Attorney Act, 1882 provides as follows:-

"2. The donee of a power-of-attorney may, if he thinks fit, execute or do any instrument or thing in and with his own name and signature and his own seal, where sealing is required, by the authority of the donor of the power; and every instrument and thing so executed and done, shall be as effectual in law as if it had been executed or done by the donee of the power in the name, and with the signature and seal, of the donor thereof. This section applies to powers-of-attorney created by instruments executed either before or after this Act comes into force."

A power of attorney does not within the meaning of section 17(1)(b) purport or operate to create, declare, assign, limit or extinguish any right, title or interest to or in immovable property. Where the donor of the power of attorney authorises an agent to execute an instrument, acting on his behalf, which will have the effect of a transaction in respect of an immovable property, the power of attorney does not by itself constitute a creation, declaration, assignment, limitation or extinguishment of a right, title or interest to or in any immovable property.

These principles are indeed well settled and it would be material to refer to some of the leading judgments of the Supreme Court on the subject. In State of Rajasthan & Ors. Vs. Basant Nahata2, the Supreme Court clarified the nature of a power of attorney in the following observations:-

"13. A grant of power of attorney is essentially governed by Chapter X of the Indian Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is, as is well-known, a document of convenience.

14. ..................

Execution of a deed of power of attorney, therefore, is valid in law and subject to the provisions of the Act is not compulsorily registerable."

The same principle was laid down in Suraj Lamp and Industries Private Limited Vs. State of Haryana & Anr.3. The relevant observations are:

"A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor authorises the grantee to do the acts specified therein, on behalf of grantor, which when executed will be binding on the grantor as if done by him (see Section 1-A and Section 2 of the Powers of Attorney Act, 1882). It is revocable or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee."

Having regard to this position in law, the Supreme Court held in paragraph 24 of the aforesaid judgment that the Courts will not treat transactions of the nature of general power of attorney sales as completed or concluded transfers or as conveyances "as they neither convey title nor create any interest in an immovable property".

Following these decisions of the Supreme Court, it is clear that a power of attorney does not require compulsory registration under section 17(1)(b) for the simple reason that the donor by the execution of the document only authorises the donee to act on his behalf and the instrument itself does not create, declare, assign, limit or extinguish any right, title or interest to or in immovable property.

Section 51 of the Registration Act, 1908 provides as follows:-

"51. Register-books to be kept in the several offices.-(1) The following books shall be kept in the several offices hereinafter named, namely:--

A. In all registration offices-

Book 1. Register of non-testamentary documents relating to immovable property;

Book 2. 'Record of reasons for refusal to register';

Book 3. 'Register of wills and authorities to adopt', and

Book 4. 'Miscellaneous Register'.

B. In the offices of Registrars--

Book 5. 'Register of deposits of wills'.

(2) In Book 1 shall be filed true copies of all documents or memoranda registered under Sections 17, 18 and 89 which relate to immovable property, and are not wills:

Provided that where Book is in electronic form, all documents, other than wills, registered under aforesaid sections or true copies thereof, as the case may be, or memoranda shall be scanned in it and a printout, thereof shall be kept permanently in Book 1.

(3) In Book 4 shall be filed true copies of all documents registered under Clauses (d) and (f) of Section 18 which do not relate to immovable property:

Provided that where Book is in electronic form, all documents registered under the aforesaid clauses or their true copies, as the case may be, shall be scanned in it and a printout thereof shall be kept permanently in Book 4.

(4) Nothing in this section shall be deemed to require more than one set of books, where the office of the Registrar has been amalgamated with the office of a sub-Registrar.

(5) Where due to fire, tempest, flood, excessive rainfall, violence of any army or mob, or other irresistible force, any or all of the books specified in sub-section (1) are destroyed, or become illegible, either wholly or partially, and the State Government is of the opinion that it is necessary, or expedient so to do so, it may, by order, direct such book or such portion thereof, as it thinks fit, to be recopied, authenticated, or reconstructed in such manner as may be prescribed, and the copy so prepared, authenticated or reconstructed, shall for the purpose of this Act, and of the Indian Evidence Act, 1872, be deemed to have taken the place of, and to be the original book or portion."

Insofar as the present case is concerned, the two books which are of relevance, are Book 1 and Book 4. Book 1 is a register of non-testamentary documents relating to immovable property. Book 4 is a miscellaneous register. Sub-section (2) of section 51 provides that in Book 1 shall be entered or filed all documents or memoranda which are registered under sections 17, 18 and 89, which relate to immovable property and are not Wills. Sub-section (3) of section 51 specifies that Book 4 shall comprise all documents which are registered under clause (d) and (f) of section 18 which do not relate to immovable property. Clause (d) of section 18 deals with instruments which create, declare, assign, limit or extinguish any right, title or interest to or in movable property. Clause (f), as we have also noted, deals with all other documents not required by section 17 to be registered. A power of attorney is not entered in Book 1 which is maintained under section 51 but under Book 4 inasmuch as it is optionally registerable under section 18(f) and does not relate to immovable property.

Section 32 of the Registration Act, 1908 provides as follows:-

"32. Persons to present documents for registration :- Except in the cases mentioned in Sections 31, 88 and 89, every document to be registered under this Act, whether such registration be compulsory or optional, shall be presented at the proper registration-office :-

(a) by some person executing or claiming under the same, or, in the case of a copy of a decree or order, claiming under the decree or order, or

(b) by the representative or assign of such a person, or

(c) by the agent of such a person, representative or assign, duly authorised by power-of-attorney executed and authenticated in manner hereinafter mentioned."

Section 32 provides for the manner in which a document shall be presented for registration at the registration office, where registration is compulsory or optional. A document has to be presented for registration by (i) the person executing or claiming under the document; or (ii) a representative or assign of the executant; or (iii) the agent of the executant, representative or assign, duly authorised by a power of attorney of the assignee executed and authenticated in the manner thereinafter mentioned. Consequently, insofar as a power of attorney is concerned, clause (c) of section 32 stipulates that when a document is presented for registration by the agent of the executant or by a representative or assign, such power of attorney has to be executed and authenticated in the manner which is mentioned thereafter. Section 32A provides for the affixation of a photograph and fingerprint to the document.

Section 33 provides as follows:-

"33. Power-of-attorney recognizable for purposes of section 32. - (1) For the purposes of section 32, the following powers-of-attorney shall alone be recognized, namely: -

(a) if the principal at the time of executing the power-of-attorney resides in any part of India in which this Act is for the time being in force, a power-of-attorney executed before and authenticated by the Registrar or Sub-Registrar within whose district or sub-district the principal resides;

(b) if the principal at the time aforesaid resides in any part of India in which this Act is not in force, a power-of-attorney executed before and authenticated by any Magistrate;

(c) if the principal at the time aforesaid does not reside in India, a power-of-attorney executed before and authenticated by a Notary Public, or any Court, Judge, Magistrate, Indian Consul or Vice-Consul, or representative of the Central Government:

Provided that the following persons shall not be required to attend at any registration-office or Court for the purpose of executing any such power-of-attorney as is mentioned in clauses (a) and (b) of this section, namely:--

(i) persons who by reason of bodily infirmity are unable without risk or serious inconvenience so to attend;

(ii) persons who are in jail under civil or criminal process; and

(iii) persons exempt by law from personal appearance in court.

Explanation.--In this sub-section "India" means India, as defined in clause (28) of section 3 of the General Clauses Act, 1897 (10 of 1897).

(2) In the case of every such person the Registrar or Sub-Registrar or Magistrate, as the case may be, if satisfied that the power-of-attorney has been voluntarily executed by the person purporting to be the principal, may attest the same without requiring his personal attendance at the office or Court aforesaid.

(3) To obtain evidence as to the voluntary nature of the execution, the Registrar or Sub-Registrar or Magistrate may either himself go to the house of the person purporting to be the principal, or to the jail in which he is confined, and examine him, or issue a commission for his examination.

(4) Any power-of-attorney mentioned in this section may be proved by the production of it without further proof when it purports on the face of it to have been executed before and authenticated by the person or Court hereinbefore mentioned in that behalf."

Section 33 stipulates a situation under which alone, powers of attorney would be recognised for the purpose of section 32. Under clause (a) where a principal resides in India, the power of attorney has to be executed before and authenticated by the Registrar or Sub-Registrar within whose district or sub-district the principal resides. Clause (c) deals with a situation where the principal does not reside in India with which we are not concerned in these proceedings. Under sub-section (2) of section 33, the Registrar or Sub-Registrar in the case of every such person, if satisfied, that the power of attorney has been voluntarily executed by the person purporting to be the principal may attest it without requiring his personal attendance at the office or the Court aforesaid.

In Rajni Tandon Vs. Dulal Ranjan Ghosh Dastida & Anr.4, the Supreme Court has held that it is only in a case where the person who has signed the document cannot present it before the registering officer and furnishes a power of attorney to another to present the document that section 33 comes into operation. It is only in such a case that the power of attorney has to be executed or authenticated in the manner which is provided in section 33(1)(a). Section 32, when read together with section 33 would thus make it abundantly clear that where a person who has executed the instrument is unable to remain present before the registering officer for the purpose of presenting the document for registration and the document is presented by the holder of a power of attorney, the power of attorney has to be executed and authenticated in the manner which is provided for in section 33(1)(a).

The situation which has arisen as a result of these provisions of the Registration Act, 1908 has caused a serious lacuna in the law since, as a result of the provisions as they now stand, a power of attorney is not compulsorily registerable under section 17(1)(b). Moreover, since the power is not compulsorily registerable under section 17, it is not required to be placed in Book 1. Even a power of attorney which has been registered optionally under section 18 is not entered in Book 1 since Book 1 requires only those documents or memoranda registered under sections 17, 18 and 89 which relate to immovable property and are not wills to be entered therein. This imposes a serious hurdle in the way of a prospective buyer in carrying out due diligence in respect of a transaction which is proposed to be entered into on the strength of a power of attorney. A power of attorney is placed in Book 4 if it is registered under clause (f) of section 18. If the power of attorney is not registered at all, it is impossible for the prospective buyer to conduct a proper due diligence in respect of a property with which the buyer intends to deal. Even if the power of attorney is registered under section 18(f), it is maintained in Book 4 of which inspection is not contemplated by the Registration Manual and by section 57 of the Registration Act, 1908. Section 57 provides as follows:-

"57. Registering officers to allow inspection of certain books and indexes, and to give certified copies of entries. - (1) Subject to the previous payment of the fees payable in that behalf, the Books Nos. 1 and 2 and the Indexes relating to Book No. 1 shall be at all time open to inspection by any person applying to inspect the same; and, subject to the provisions of section 62, copies or entries in such books shall be given to all persons applying for such copies.

(2) Subject to the same provisions, copies of entries in Book No. 3 and in the Index relating thereto shall be given to the persons executing the documents to which such entries relate, or to their agents, and after the death of the executants (but not before) to any person applying for such copies.

(3) Subject to the same provisions, copies of entries in Book No. 4 and in the Index relating thereto shall be given to any person executing or claiming under the documents to which such entries respectively refer, or to his agent or representative.

(4) The requisite search, under this section for entries in Book Nos. 3. and 4 shall be made only by the registering officer.

(5) All copies given under this section shall be signed and sealed by the registering officer, and shall be admissible for the purpose of proving the contents of the original documents."

Under sub-section (1) of section 57, inspection is contemplated in respect of Books 1 and 2 by any person applying for inspection. Copies of entries in Book 4 can be given to any person executing or claiming under the document to which the entries refer or to his agent or representative. There has been a recognition of the serious hurdle which we shall shortly note. In the State of Uttar Pradesh, Regulation 254 stipulates that Book 4 is a miscellaneous register in which are to be copied all documents registered under clauses (d) and (f) of section 18 which do not relate to immovable property. Regulation 254 specifies that Book 4 is not open to public inspection, nor are its indices; and copies of entries are provided only to parties executing or claiming under the document to which such entries relate or to their agents or representatives. Regulation 258 deals with Book 6 which is the register for recording brief abstracts of those powers of attorney which are authenticated under section 33(a). Regulation 258 clarifies that when a power of attorney is registered, it has to be copied in full in the register like any other document.

The Registration (Amendment) Bill, 20135 was introduced in the Rajya Sabha to amend the provisions of the Registration Act, 1908. The Bill contemplates inter alia the insertion of a specific provision in section 17 of the Registration Act, 1908 to the following effect:

"(i) power of attorny authorising transfer of immovable property with or without consideration."

The statement of objects and reasons accompanying the introduction of the Bill in fact highlights the reason why it has been considered necessary to propose the amendment to section 17 by providing compulsory registration of powers of attorney :

"At present the Power of Attorney is optionally registrable. Many unscrupulous elements have found an ingenious way to avoid the registration and transfer the immovable properties through this Power of Attorney. The Act does not contain the provision for recovery of deficit registration fees or refund of the excess registration fees collected by the Registering Officer."

The Bill is pending consideration. The Bill, when passed into law would answer the pressing need to ensure the due protection of prospective buyers across the country while entering into transactions for the sale and purchase of immovable property when they deal with a person who holds a power of attorney. The proposed amendment is, if we may say so, a step in the right direction and commends itself as a measure which would obviate a serious loophole that has been exploited by unscrupulous persons at the cost of unaware purchasers.

As the law stands today in the country, and for the reasons which we have indicated above, it is evident that the circular that was issued by the Inspector General of Registration on 3 July 2013 requiring that powers of attorney be maintained in Book 1 was contrary to the specific provisions of the Registration Act and was correctly rectified by the subsequent circular dated 12 February 2014 of the Inspector General of Registration.

For these reasons, we are unable to interfere in the exercise of writ jurisdiction under Article 226 of the Constitution but while concluding, would express our appreciation of the able assistance which has been rendered to the Court both by the learned counsel appearing on behalf of the petitioner and by the learned Standing Counsel.

The writ petition is, accordingly, dismissed.

Order Date :- 30.05.2014

GS

(Dr. D.Y. Chandrachud, C.J.)

(Dilip Gupta, J.)