Sale certificate registration cannot be refused for tax encumbrance where no express statutory prohibition exists and secured creditor priority applies.

A registering officer cannot refuse registration of a sale certificate on grounds of title, marketable title, or Sales Tax encumbrance because registration under the Registration Act is an administrative function and not an adjudication of title. A sale certificate issued to a purchaser at public auction is excluded from compulsory registration under Section 17(2)(xii), and reliance on Section 22-A was no longer available. Rule 44(1)(i) of the Maharashtra Registration Rules applies only where an express statutory prohibition exists and the required permission or no-objection certificate is absent; no such prohibition was shown. The secured creditor's statutory priority under Section 26-E prevails over State VAT dues, and refusal of registration on that basis was unsustainable.

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Issues: Whether the Registrar of Assurances could refuse registration of a sale certificate on the ground of Sales Tax encumbrance and allied objections, and whether the secured creditor's charge under Section 26-E prevailed over the State's tax dues.

Analysis: The sale certificate issued under the SARFAESI regime was examined against the objections raised by the registering authority. The Court held that the registering officer under the Registration Act performs an administrative function and is not empowered to adjudicate title or marketable title. Section 17(2)(xii) of the Registration Act, 1908 excludes a sale certificate granted to a purchaser at public auction from compulsory registration, and the earlier basis for refusal under Section 22-A of the Act no longer survived. Rule 44(1)(i) of the Maharashtra Registration Rules, 1961 could apply only where the transaction is prohibited by an existing Central or State enactment and a required permission or no-objection certificate is absent; no such statutory prohibition was shown. On priority, the issue was treated as settled that the secured creditor's statutory priority under Section 26-E ranks above the State's VAT dues.

Conclusion: The refusal to register the sale certificate on the basis of Sales Tax encumbrance was unsustainable, and the sale certificate was directed to be registered subject to compliance with the remaining procedural requirements and payment of stamp duty.

Ratio Decidendi: A registering officer cannot refuse registration of a sale certificate on questions of title or on a State tax encumbrance unless an express statutory prohibition applies, and the secured creditor's priority under Section 26-E prevails over State VAT dues.

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