Case Note & Summary
The Petitioner, Swayam Realtors & Traders LLP, originally a company under the Companies Act, 1956 and later converted into an LLP under the Limited Liability Partnership Act, 2008, sought a writ of mandamus under Article 226 of the Constitution of India directing the Respondent authorities to register orders dated 26th February, 2007 and 3rd January, 2013 passed by the Board for Industrial and Financial Reconstruction (BIFR) in Case No. 135 of 1989. These orders sanctioned a scheme of revival-cum-demerger under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA Act), whereby the immovable properties of Respondent No. 9, Khatau Makanji Spinning & Weaving Mills Limited, stood transferred to and vested in the Petitioner with effect from 1st April, 2006. The Petitioner also sought registration of a declaration-cum-indemnity deed dated 28th November, 2024 and mutation of revenue records. However, the prayer for mutation was not pressed at the hearing. The Petitioner argued that its rights did not emanate from any voluntary instrument but arose by operation of law pursuant to a statutory scheme sanctioned by BIFR, which had attained finality. The transfer and vesting of properties were completed upon sanction of the scheme, and registration was merely consequential to reflect such vesting in public records. The Respondent authorities, however, refused to register the BIFR orders on the ground that they were not exempt from registration under the Registration Act, 1908. The court examined the provisions of the Registration Act, 1908, particularly Section 17(1)(b) which requires compulsory registration of documents affecting immovable property, and Section 17(2)(v) which exempts Crown grants. The court held that BIFR orders are not exempt under Section 17(2)(v) and are therefore required to be registered. The court further held that the registering authorities have a statutory duty to register such orders when presented, and refusal on the ground of non-exemption is not justified. Accordingly, the court allowed the petition and directed the Respondent authorities to register the BIFR orders and the declaration-cum-indemnity deed, subject to payment of proper stamp duty and registration fees. The court also recorded the Petitioner's statement that the relief concerning mutation was not pressed at this stage, with liberty reserved.
Headnote
A) Registration Act, 1908 - Compulsory Registration - Section 17(1)(b) - Transfer of Immovable Property by Operation of Law - BIFR orders under SICA Act - The court held that BIFR orders sanctioning a scheme of revival-cum-demerger, which transfer immovable properties by operation of law, are documents affecting immovable property and require registration under Section 17(1)(b) of the Registration Act, 1908. The exemption under Section 17(2)(v) applies only to Crown grants, not to BIFR orders. The registering authorities are duty-bound to register such orders when presented, and refusal on the ground of non-exemption is not justified. (Paras 1-10) B) Sick Industrial Companies (Special Provisions) Act, 1985 - BIFR Scheme - Transfer of Property - The court noted that the BIFR scheme sanctioned on 26th February, 2007 and 3rd January, 2013 resulted in the transfer and vesting of immovable properties of Respondent No. 9 to the Petitioner by operation of law. The Petitioner sought registration of these orders and a declaration-cum-indemnity deed. The court directed the registering authorities to register the BIFR orders and the declaration-cum-indemnity deed, subject to payment of proper stamp duty and registration fees. (Paras 3-10) C) Constitution of India - Article 226 - Writ of Mandamus - The court issued a writ of mandamus directing the Respondent authorities to register the BIFR orders and the declaration-cum-indemnity deed, as the refusal to register was without legal basis. The court held that the Petitioner's rights arose by operation of law and the requirement of registration was merely consequential to reflect such vesting in public records. (Paras 3-10)
Issue of Consideration
Whether the orders of BIFR sanctioning a scheme of revival-cum-demerger under the SICA Act, which transfer immovable properties by operation of law, are required to be registered under the Registration Act, 1908, and whether the registering authorities can refuse registration on the ground that the orders are not exempt from registration.
Final Decision
The court allowed the writ petition and directed the Respondent authorities to register the BIFR orders dated 26th February, 2007 and 3rd January, 2013, and the declaration-cum-indemnity deed dated 28th November, 2024, subject to payment of proper stamp duty and registration fees. The prayer for mutation was not pressed and liberty was reserved.
Law Points
- Registration of BIFR orders under Registration Act
- 1908 is mandatory for property transfers by operation of law
- BIFR orders under SICA Act are not exempt from registration
- Section 17(2)(v) Registration Act
- 1908 exemption applies only to Crown grants
- not BIFR orders
- Writ of Mandamus lies to compel registration when statutory duty is clear
