1972 (6) TMI 25 - HC - Income Tax

Petitioners have filed this petition under articles 226 and 227 of the Constitution praying for a writ of mandamus against respondent No. 1 directing him to register under the provisions of the Indian Registration Act the Indenture of Contributory First Legal Mortgage dated and to endorse thereon the certificate of registration as required by the said Act - It is alternatively prayed that a writ of mandamus be issued directing respondent No. 1 to register the said mortgage deed qua the mortgagor and to keep the registration of the said deed pending until the tax clearance certificate is obtained by the confirming parties to the said mortgage deed - When tax clearance certificate is produced by only one of the executants and not by others whether registration can be made in respect of the person producing the certificate

Issues Involved:
1. Registration of the Indenture of Contributory First Legal Mortgage.
2. Requirement of tax clearance certificates from confirming parties.
3. Scope of inquiry by the Sub-Registrar under the Registration Act, Wealth-tax Act, and Income-tax Act.
4. Possibility of partial registration of a document.

Detailed Analysis:

1. Registration of the Indenture of Contributory First Legal Mortgage:
The petitioners sought a writ of mandamus to compel the Sub-Registrar to register the Indenture of Contributory First Legal Mortgage dated August 10, 1964. The Sub-Registrar refused to register the document due to the absence of tax clearance certificates from the confirming parties, Ramabai Tricumji and Chandrakant Tricumji, despite the mortgagor, Tricumji Mirani, having produced his certificate.

2. Requirement of Tax Clearance Certificates from Confirming Parties:
The petitioners argued that the confirming parties' lack of tax clearance certificates should not prevent the registration of the mortgage deed. They contended that the confirming parties' rights were already postponed by a separate deed of modification and postponement of security, which was duly registered. Therefore, the Indenture did not transfer, assign, limit, or extinguish their rights, and the Sub-Registrar erroneously insisted on tax clearance certificates from them.

3. Scope of Inquiry by the Sub-Registrar:
The court examined the provisions of the Registration Act, Wealth-tax Act, and Income-tax Act to determine the Sub-Registrar's scope of inquiry. Under sections 34 and 35 of the Registration Act, the Sub-Registrar's inquiry is limited to verifying the identity and execution of the document by the parties. However, sections 34 of the Wealth-tax Act and 230A of the Income-tax Act impose additional restrictions, requiring tax clearance certificates for documents that transfer, assign, limit, or extinguish rights in property valued over a certain amount.

The court noted that the Sub-Registrar must consider surrounding circumstances and not just the document's face value. This broader inquiry is necessary to determine if the document falls under the restrictions of the Wealth-tax Act or Income-tax Act.

4. Possibility of Partial Registration:
The court addressed whether partial registration of a document is permissible if some parties produce tax clearance certificates while others do not. The court concluded that both sections 34 and 230A allow for partial registration. The Sub-Registrar can register the document concerning parties who have provided the necessary tax clearance certificates and keep the registration pending for those who have not.

Judgment:
The court issued a writ of mandamus directing the Sub-Registrar to register the Indenture of Contributory First Legal Mortgage concerning the mortgagor, Tricumji Mirani, and to endorse the registration certificate accordingly. The Sub-Registrar was also directed to keep the registration pending for the confirming parties until they produce the required tax clearance certificates under section 230A of the Income-tax Act, 1961. The petitioners did not press for costs, and no order as to costs was made.

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