A Forum Without A Deed: Compulsory Registration, Section 49 And The Limits Of Separability In Immovable Property Arbitration
Jaskiran Kaur, National Law Institute University, Bhopal
ABSTRACT
When the Supreme Court held in In Re Interplay that an unstamped instrument is inadmissible but not void, and that stamping objections belong to the arbitral tribunal rather than the referral court, it was widely read as closing a decade of litigation about defective instruments and arbitration. It closed only half of it. SMS Tea Estates had decided two questions, one about stamping and one about registration, and Interplay overruled it on the first while leaving the second standing and indeed relying on the distinction between them: Section 35 of the Indian Stamp Act bars an insufficiently stamped instrument from being used even for a collateral purpose, whereas the proviso to Section 49 of the Registration Act expressly permits collateral use. This article argues that the surviving half is a hollow victory and that the symmetry between the two defects is false. Stamping is curable at any stage by paying duty and penalty; non-registration becomes incurable once the periods in Sections 23 and 25 of the Registration Act expire. A claimant under an unstamped lease therefore ends with both a tribunal and an admissible instrument, while a claimant under an unregistered lease ends with a tribunal and an instrument the tribunal may not read, because K B Saha holds that where a document is inadmissible for want of registration every term in it is inadmissible and a term of the lease cannot be proved as a collateral fact. The arbitration clause is the only clause that survives, and it is the only clause of no use on the merits. The article then asks whether Section 49 binds an arbitral tribunal at all, given that Section 19(1) of the Arbitration Act frees tribunals from the Evidence Act but not from a substantive bar located elsewhere, and argues that an award resting on an unregistered compulsorily registrable deed is exposed to challenge for patent illegality. With part performance under Section 53A no longer available to an unregistered transferee after 2001, the fallbacks are largely closed. Four reforms are proposed, the principal one being a registration cure modelled on the Stamp Act.
Keywords: Registration Act 1908; Section 49; Transfer of Property Act 1882; separability; collateral transaction; arbitrability; In Re Interplay; SMS Tea Estates; patent illegality.
