Registration Act | Supreme Court Strikes Down Bihar Rule Requiring Vendor To Show Proof Of Mutation For Sale Registration

The Supreme Court on Friday (November 7) struck down sub-rules (xvii) and (xviii) of Rule 19 of the Bihar Registration Rules, 2008, which had empowered registering authorities to refuse registration of sale or gift deeds unless proof of mutation in favour of the seller was produced.

A Bench of Justice Pamidighantam Sri Narasimha and Justice Joymalya Bagchi held that the impugned provisions, introduced through a 2019 amendment,were ultra vires the Registration Act, 1908, and imposed arbitrary restrictions on the constitutional right to acquire and dispose of property.

"We have also come to the conclusion that, as the said sub-rules tilt the balance and empower the registering authorities to produce collateral evidence of title to the property as a pre-condition for registration, such a measure, through subordinate legislation, is also against the purpose and object of the Act. Further, the requirement under the impugned sub-rules is arbitrary as the process of mutation and its certification is uncertain and virtually unavailable in near future, as the Bihar Mutation Act, 2011 and the Bihar Special Survey and Settlement Act, 2011 are said to be nowhere near implementation," the Court observed.

The petitioners referred to the recent judgment in K. Gopi v. Sub-Registrar and Others which struck down a similar provision in the Tamil Nadu Registration Rules.

Freedom To Sell Property Unduly Restricted

The Court observed that the requirement of furnishing “Jamabandi” or “holding allotment” certificates under the Bihar Land Mutation Act, 2011, as a pre-condition for registration, effectively curtailed the freedom to sell property.

"A requirement of rules, regulations or even law that impedes or restrains easy and effective transfer of property will be illegal as it has the direct effect of 'depriving of property' to that extent, and such delays, caused due to unreasonable and arbitrary restrictions, impinge the right to hold and dispose of property," the Court declared.

It noted that the State's mutation process and land surveys were still incomplete, making compliance practically impossible for landowners. This, the Bench said, rendered the provision “arbitrary and illegal”.

Beyond Rule-Making Power

The Court held that the Inspector General of Registration had no authority under Section 69 of the Registration Act to introduce such sub-rules. Section 69 empowers the Inspector General only to make rules regarding custody of records, maintenance of registers, and procedural regulation of registration offices.

“There is nothing in Section 69 that would enable the Inspector General to make rules requiring proof of mutation in favour of the vendor as a condition precedent for registration,” the Bench clarified.

The Court rejected the Patna High Court's view that general rule-making power under Section 69(1)(j) could justify the amendments.

Registration Is Not Proof Of Ownership

Elaborating on the longstanding dichotomy between registration and ownership, the judgment noted that India's property laws still operate on a presumptive titling system.

“The Registration Act mandates registration of documents, not the title. Registration serves as a public record of transaction having presumptive evidentiary value, but it is never a conclusive proof of ownership,” the Court observed.

It highlighted that property disputes constitute nearly 66% of all civil litigation in India, reflecting the inefficiencies of the current system.

Need For Reform & Technological Integration

Calling for a paradigm shift in land registration and ownership verification, the Bench discussed the potential of Blockchain technology to create a transparent and tamper-proof record of land ownership.

“Blockchain technology could enhance the integrity of title records and strengthen public trust in the ownership framework,” the judgment noted.

The Court suggested a comprehensive reform of the Transfer of Property Act, 1882, Registration Act, 1908, Stamp Act, 1899, and allied laws to move towards a conclusive titling system where registration itself guarantees ownership.

Direction To Law Commission

Recognizing the national significance of the issue, the Court requested the Law Commission of India to examine the feasibility of integrating property registration with conclusive titling and to explore legislative and technological solutions in consultation with the Union and State Governments.

The Supreme Court allowed the appeals filed by Samiullah and others, set aside the Patna High Court judgment, and quashed the State's 2019 notification introducing the disputed sub-rules.

Senior Advocate Manan Kumar Mishra and Adv Velan AoR appeared for the appellants.

Senior Advocate Ranjit Kumar assisted by Manish Kumar, AoR appeared for the State.

Also from the judgment -'Property Purchase Traumatic' : Supreme Court Suggests Use Of Blockchain Technology To Make Land Registrations Easy & Reliable