N C RANGESH Vs. INSPECTOR GENERAL OF REGISTRATION

JUDGEMENT

(1.) THE common question involved in all these writ petitions is about the validity of the circular issued by the Inspector-General of Registration dated May 29, 1989, and the circular dated March 11, 1977, issued by the same authority.

(2.) THE petitioners in W.P. Nos. 408, 409, 1466 to 1470 of 1990 are purchasers of land from the one and the same owner Mrs. Subhalakhsmi Each of the abovementioned purchasers purchased a different extent of undivided interest from the said owner, Mrs. Subhalakshmi, in No. 15, Venkatarama Iyer Street, T. Nagar, Madras-17. Each of the petitioners entered into an agreement individually and has paid an advance of Rs.1,001 and the sale consideration agreed by the parties in each transaction exceeds rupees one lakh.

(3.) THE complaint of the petitioner in W.P. No. 408 of 1990 is that a circular dated March 11, 1977, has been issued by the Inspector-General of Registration requiring the production of a tax clearance certificate under the provisions of section 230A of the Income-tax Act, in the case of a transfer of a part of the property or an undivided share or interest in the property, even if the consideration for such transfer is less than Rs. two lakhs. It is also stated by the petitioner that the Inspector-General of Registration purported to issue a circular dated May 29, 1989, which is impugned in these cases, to all District Registrars of Madras, Madurai and Coimbatore. It is also alleged in the affidavit that in pursuance of circular letter dated May 29, 1989, wherever any document of sale is presented for registration, conveying only a portion or undivided interest carved out of a larger extent of land (property) despite the contract of sale agreed to between the parties, for a transfer or conveyance of a specific interest or a share of the vendor's property, the Sub-Registrars in Tamil Nadu are insisting on production of no-objection certificate from the Appropriate Authority, Income-tax Department. It is alleged by the petitioner that both the circulars dated March 11, 1977, and May 29, 1989, are ex-facie arbitrary, illegal and without jurisdiction. It is also stated that section 230A(1) of the Income-tax Act, 1961 (as amended by the Finance Act, 1988), provides that a tax clearance certificate is necessary, if the valuation of the property transferred exceeds Rs. two lakhs, that the said value of the transfer being less than Rs. two lakhs, section 230A as it stands today is not at all attracted, that the mischief or illegality brought by the circular issued by the Inspector-General of Registration runs counter to the plain terms of section 230A of the Income-tax Act, 1961 and that the circular cannot purport two give directions contrary to the enacted provisions of law and that the Inspector-General of Registration and the Sub-Registrars functioning under him have to be directed to ignore the circular. It is also stated that the circular issued on May 29, 1989, is contrary to law, that the said circular, compelling the parties to a document to make an application to the Appropriate Authority, Income-tax Department, Madras for a no-objection certificate despite the fact that the transfer relates to a property less than Rs. 10 lakhs, in effect, overrides and nullifies the provisions of Chapter XXC of the Income-tax Act, 1961 (sections 230A and 269UC of the said Income-tax Act, 1961), that the provisions of section 269UA contemplate the transfer of a part of the property or a building and unless such transfer of a part or portion of the property exceeds Rs. 10 lakhs, there is no requirement of the parties to apply for the obtain a no-objection certificate" from the appropriate authority, Income-tax Department. It is further stated that in all those cases, the apparent consideration of the sale deeds is far below the amount specified in Chapter XXC and as such there is no need to provide a "no-objection certificate" from the appropriate authority. It is also stated in the affidavit that the provisions of section 269UC are attracted only if the apparent consideration agreed and stated in the document exceeds Rs. 10 lakhs, that section 269UC clearly supersedes the provisions of the Transfer of Property Act and the Indian Registration Act, 1908, that the said circular dated May 29, 1989, clothed with powers under the Registration Act, 1908, interferes with and fetters the quasi-judicial functions performed by the District Registrar and Sub-Registrars in the matter of registering doncuments. A reference to a Judgment of a Division Bench of this court in Park View Apartment Builders v. State of Tamil Nadu [1989] TLNJ 375 is made in the affidavit. It is also stated in the affidavit that the circular dated May 29, 1989, is contrary to the scheme of the Income-tax Act, 1961 (Chapter XXC) and purports to enlarge and confer powers on the Appropriate Authority, Income-tax Department, Madras, to go into the question of grant of no-objection certificate or sanction even in respect of a transfer whose value is less than Rs. 10,00,000. It is further stated by the petitioner that the Inspector-General of Registration is bound to act in conformity with the provisions of the Income-tax Act and the Indian Registration Act, 1908, that the Inspector-General of Registration is not empowered to insist on the production to two certificates under the Income-tax Act, 1961, for the purpose of registering a "sale or transfer, one being section 230A clearance certificate and another being "no-objection" certificate in a case where the apparent consideration for the transfer does not exceed Rs. 10 lakhs. It is further stated in the affidavit that the Inspector-General of Registration is under a legal duty and obligation to give effect and follow the object and spirit of the Indian Registration Act, 1908, read with the Income-tax Act, 1961, and to proceed to register the documents presented.