Recording Fraudulent Registrations: administrative findings must be entered in registers and encumbrance certificates to protect true owners.

Final administrative findings that a registered document is fraudulent should be recorded in registration records and reflected in the Encumbrance Certificate to notify third parties and protect the true owner; the Registration Act framework and the Inspector General of Registration's circular require index entries and footnotes where fraudulent registration is proved, and refusing to record such final findings on the basis of lacking power to cancel defeats the corrective and protective purpose of the statutory scheme and the circular.

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Issues: Whether, after a competent registration authority after enquiry has finally held that a registered transaction is fraudulent, that finding must be recorded in the relevant registers and reflected in the Encumbrance Certificate and whether the third respondent was justified in refusing to make such an entry.

Analysis: The second respondent conducted an enquiry, found the impugned transaction to be fraudulent and rendered a final finding to that effect. The Registration Act, 1908 contemplates a mechanism for the Authority to deal with complaints of fraudulent registration. A finding that a registered document is fraudulent renders the document void in law and, where final, that finding should be recorded in the registration records so as to inform third parties and to prevent prejudice to the true owner. The Inspector General of Registration's circular dated 31.07.2018 specifically directs District Registrars to make index entries and footnotes in copies of documents where fraudulent registration is proved, and to prevent further registrations based on such fraudulent documents while permitting the genuine owner to proceed with registration. A refusal by the third respondent to record the final administrative finding, citing lack of power to cancel registrations, defeats the protective and corrective function contemplated by the statutory scheme and the circular, because declaring a transaction fraudulent and sending the party to a civil court to cancel the document would render the administrative finding ineffective for practical purposes.

Conclusion: The impugned communication of the third respondent is quashed and the third respondent is directed to record the proceedings of the second respondent dated 30.04.2019 in the relevant books and ensure the same is reflected in the Encumbrance Certificate within two weeks; relief granted in favour of the petitioner.

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