Court’s Decision
The Supreme Court in this case dealt with the crucial legal question concerning the registration of sale deeds executed through a power of attorney. The Court held that a power of attorney holder who executes a document on behalf of a principal does not become the “executant” under Section 32(a) of the Registration Act, 1908. Instead, such a person remains an “agent” and is bound to satisfy the strict statutory requirements under Sections 32(c), 33, 34, and 35 of the Act, along with applicable rules. The Court categorically overruled the contrary view laid down in the earlier judgment of Rajni Tandon v. Dulal Ranjan Ghosh Dastidar and directed that the matter be placed before a larger bench for authoritative determination.
Facts
The case arose from a dispute over three sale deeds executed by a tenant (Rajender Kumar) in favour of his wife (Shashikala) allegedly under an irrevocable general power of attorney dated 15 October 1990, supposedly executed by the original owners, Ranveer Singh and Gyanu Bai. The executants, however, denied executing the power of attorney. A trial court framed issues concerning the validity and admissibility of this power of attorney and the subsequent sale deeds, especially whether the Registrar had satisfied himself as to their validity and the identity of the power of attorney holder under the Registration Act, 1908.
The High Court dismissed the validity of the sale deeds, relying on the Supreme Court’s previous decision in Rajni Tandon, which held that a power of attorney holder is deemed an “executant” and is thus exempt from certain verification requirements. This led to the present appeal before the Supreme Court.
Issues
- Whether the power of attorney dated 15 October 1990 was properly authenticated as per Sections 32, 33, 34, and 35 of the Registration Act, 1908.
- Whether a power of attorney holder who executes a sale deed on behalf of a principal qualifies as an “executant” under Section 32(a), thereby bypassing the requirements under Section 32(c) and Section 33.
- Whether the view adopted in Rajni Tandon (2009) correctly interpreted the Registration Act concerning the duties of the Registrar and authentication requirements.
Petitioner’s Arguments
The petitioners contended that the power of attorney holder, having been authorised to execute and present sale deeds for registration, was the lawful executant of the document under Section 32(a) of the Registration Act. They relied on Rajni Tandon to argue that there was no need for separate authentication under Section 33 since the attorney holder, by executing the document, became the executant and directly presented the sale deeds for registration. Therefore, all subsequent sales were valid and binding.
Respondent’s Arguments
The respondents argued that the power of attorney was disputed by the original owners, who categorically denied its execution. It was submitted that under Sections 32(c), 33, 34, and 35 of the Registration Act, any sale deed executed through a power of attorney must comply with mandatory authentication requirements, including verification by the Registrar of the validity of the power of attorney and the identity of the presenter. They contended that Rajni Tandon was wrongly decided and led to circumvention of statutory safeguards, thereby validating potentially fraudulent transactions.
Analysis of the Law
The Supreme Court carried out an in-depth statutory interpretation of Sections 32 to 35 of the Registration Act, 1908. The Court explained that Section 32 prescribes who may present documents for registration. Clause (a) allows the executant or a person claiming under the document, while Clause (c) allows an agent duly authorised through an authenticated power of attorney.
Section 33 prescribes detailed requirements for valid powers of attorney. The Court highlighted that under Indian registration law, a power of attorney holder remains an agent and is therefore subject to authentication requirements unless the document is executed in his own right.
Sections 34 and 35 impose duties on the Registrar to verify the identity and authority of persons presenting documents for registration, especially when such persons act on behalf of others. The Court stressed that the Registrar must be satisfied both as to identity and the capacity of the presenter, which inherently involves examining the power of attorney.
Precedent Analysis
The Supreme Court extensively examined Rajni Tandon v. Dulal Ranjan Ghosh Dastidar (2009), which had ruled that a power of attorney holder executing a document becomes the executant and can present it under Section 32(a) without additional authentication under Section 33. The Court disagreed with this reasoning, stating that such an interpretation undermines the legal safeguards intended to prevent fraudulent land transactions.
The Court pointed out the logical inconsistency in Rajni Tandon, where the mere execution of a document by an agent would enable bypassing stricter verification procedures, whereas simple presentation by another agent would trigger full statutory scrutiny. This approach, the Court held, is legally untenable.
Court’s Reasoning
The Court held that an agent does not become the “executant” merely because he signs a document on behalf of a principal. The primary executant remains the principal, and the agent’s role is limited to representation. This distinction, the Court noted, ensures the Registrar properly scrutinises the power of attorney to prevent fraudulent sales.
The Court observed, “By merely signing a document on behalf of the principal, a power-of-attorney holder does not lose his status as an agent and become the executant in his own right.” It concluded that Section 32(c) applies to such situations, and compliance with Sections 33, 34, and 35 is mandatory.
Conclusion
The Supreme Court held that the view adopted in Rajni Tandon was erroneous and requires reconsideration. It directed that the matter be placed before a larger bench for authoritative determination. Pending that, the impugned transactions involving disputed powers of attorney stand subjected to stricter scrutiny under the Registration Act. The appeals were directed to be listed expeditiously before an appropriate Bench for further hearing.
Implications
This judgment reinforces the need for strict compliance with statutory safeguards in property transactions involving powers of attorney. It serves as a significant precedent for ensuring that fraudulent property transfers using unverified powers of attorney are prevented. The Court’s refusal to dilute authentication requirements underscores the principle that “registration is not a mechanical process and must involve proper scrutiny by the Registrar.” This decision could have widespread ramifications in Indian property law, particularly in cases where property sales occur via unverified or notarized powers of attorney.
FAQs
1. Does a power of attorney holder become the executant by signing a sale deed?
No, the Supreme Court held that a power of attorney holder remains an agent and does not become the executant, thereby requiring adherence to the authentication provisions under Sections 32(c), 33, 34, and 35 of the Registration Act.
2. Is a notarised power of attorney sufficient for property sale registrations?
No, the Court clarified that even a registered power of attorney must be authenticated as per the statutory requirements. A notarised power of attorney alone is insufficient for valid execution and registration of sale deeds.
3. What happens to the ruling in Rajni Tandon v. Dulal Ranjan Ghosh Dastidar?
The Supreme Court disagreed with the view in Rajni Tandon and referred the matter to a larger bench, signalling a likely overturning of the earlier precedent that allowed relaxation of verification norms for power of attorney holders.
