NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
CIRCUIT BENCH AT CHENNAI
(From the order dated 19.3.2004 in A.P. No.337/99 of the State Commission, Chennai)
The Joint Sub Registrar,
District Registrar’s Office
Dindigul District … Petitioner
14, Thiruvalluvar Salai
Shanmugapuram, Palani … Respondent
HON’BLE MR.JUSTICE M.B. SHAH, PRESIDENT
MRS. RAJYALAKSHMI RAO, MEMBER
For the Petitioner : Mr. K. Sentha Kumar, Advocate
For the Respondent : Dr. T. Ramasamy, Advocate with
Ms. V. Annalakshmi, Advocate.
M.B.SHAH, J. PRESIDENT:
The only question involved in this Revision Petition is: Whether the
Joint Sub-Registrar of the District Registrar’s Office can be proceeded under the Consumer
Protection Act, 1986 for issuing erroneous encumbrance certificate under the
Rules framed by the State of
For the reasons recorded hereinafter we hold that the Joint Sub-Registrar or concerned officer could be proceeded under the Consumer Protection Act, 1986 in case of issuance of encumbrance certificate without noting all the relevant transfers, encumbrances or transactions with regard to immovable property. The reason is erroneous encumbrance certificate seriously prejudice the rights of the parties and increases litigations and disputes with regard to immovable property.
Issuance of encumbrance certificate is a service and facility to be provided under the statutory rules for fees.
Further, for carrying out search or for obtaining an encumbrance certificate, a person is required to pay prescribed fees; and, in case of emergent search, double the normal rates of the fees.
Under the Rules, the encumbrance certificate is required to contain complete list of encumbrances affecting the immovable property. At the time of search and for copying the entries, precautions are contemplated under the Rules and the search is required to be carried out in the presence of the registering officer.
In support of the aforesaid finding we would discuss the contentions raised by the parties in detail.
It is undisputed that in the present case there were apparent errors in noting down the transfers while issuing encumbrance certificate.
It is the case of the Complainant that she got encumbrance certificate for purchase of one plot and before purchase of the said plot she applied for encumbrance certificate. The same was issued by the Opposite Party, Joint Sub-Registrar, Palani, wherein only the sale transaction dated 15.2.1989 had been shown. Similar encumbrance certificate was issued to one Pichaikannu of Palani mentioning the above said sale transaction.
Thereafter, when the Complainant wanted to sell the said plot to one Raj Kumar, the said Raj Kumar applied for the encumbrance certificate from 1.1.1981 to 17.12.1996. In that certificate only a few encumbrances were mentioned. Believing the said certificate to be true Raj Kumar purchased property from the Complainant by paying Rs.89,000/- and got it registered. When Raj Kumar went to take possession, one Ameer Amsa, son of Mohammed Sultan of Palani claimed that the property belonged to him and showed him the registered sale deed. Therefore, the said Raj Kumar again went and applied for another encumbrance certificate on 1.8.1997 in which some encumbrances were mentioned. Considering the aforesaid dispute the said Raj Kumar filed a Civil Suit OS No. 201 of 1997 against the Complainant on the ground that the Complainant committed fraud and cheated him. The Complainant was required to settle the matter by paying a large amount. Because of this deficiency in service in issuing encumbrance certificate without verifying the record the Complainant has suffered a considerable loss, expenses and loss of prestige. Hence the Complainant filed complaint being O.P. No.77 of 1998 before the District Forum, Dindigul claiming a compensation of Rs.3 lakhs.
The District Forum by order dated 3.3.1999 dismissed the complaint on the ground that the Registering Officers were only performing statutory function while issuing encumbrance certificate and hence, for that, the complaint was not maintainable before the Consumer Fora.
Against that appeal, A.P.No. 337 of 1999 was filed by the Complainant before the Tamil Nadu State Consumer Disputes Redressal Commission. By the order dated 19th March, 2004 the State Commission allowed the appeal by observing that there was deficiency in service by the Joint Sub-Registrar in issuing erroneous encumbrance certificate and directed him to pay a compensation of Rs.10,000/- along with costs of Rs.1,000/-. Hence, this Revision Petition.
The learned counsel for the Petitioner contended that the Joint Registrar/Joint Sub-Registrar is performing statutory duty while issuing encumbrance certificate, and, therefore, no action under the Consumer Protection Act, would lie against him as it is not a service for consideration. In support of his contention, learned counsel for the Petitioner relied upon the judgment of the Apex Court in S.P.Goel Vs. Collector of Stamps, Delhi, (1996) 1 SCC 573.
against this, it is the contention of the learned Counsel for the Complainant
that the Joint Sub-Registrar while issuing Encumbrance Certificate is not only discharging his statutory duty
but is performing function which is in the nature of service for consideration,
namely, prescribed fees. In support of his contention he has relied upon the
decision rendered by the High Court of Madras in R.Ravichandran
Vs. The State of
Firstly, it is to be emphasized that whether a person is consumer or not would depend not upon whether the functions discharged by the person are statutory functions, but would depend upon its nature and the consideration payable thereof. In the case of Lucknow Development Authority the Court held that even if a person is discharging statutory functions, that would not be a ground for holding that the Consumer Protection Act, 1986 is not applicable. The Court has observed : “The legislative intention is thus clear to protect a consumer against services rendered even by statutory bodies. The test, therefore, is not if a person against whom complaint is made is a statutory body but whether the nature of the duty and function performed by it is service or even facility”.
Hence, the question, in the present case, is to be decided on the basis of the nature of the duty and function, and also whether the performance of such duty or function is a service or facility for consideration.
deciding this question we would refer to the relevant statutory Rules. The Rules which provide for grant of
encumbrance certificate are provided in Chapter 19 of the Registration Rules
framed by the State of
Rule 143 provides that : “A certificate of encumbrance shall contain a complete list of all acts and encumbrances affecting the property in question”.
This would mean that the encumbrance certificate should contain a complete list of all encumbrances affecting the property in question. If that is not done, the vendor or the purchaser of the property in question would be seriously prejudiced, which, in most of the cases, would result in litigation and disputes. Therefore, if the encumbrance certificate does not contain the complete list of encumbrances affecting the property, then, it would be defective certificate and to that extent it amounts to deficiency in service by the concerned officers.
Next, we have to find out whether the issuance of encumbrance certificate is a service rendered by the statutory authority by charging any fee and the other procedure prescribed under the Rules.
For this, Rule 127 of Chapter 19 provides for filing of application to the Registering officer for an inspection, a search or a copy. It also provides that an emergent application shall be made before in writing with double the normal rates of fees to get the certified copy or encumbrance certificate on the next working day. This would mean that prescribed fees under the Rules is required to be paid for getting encumbrance certificate.
Further, the Rule provides that search could be carried out for encumbrances and for that fees are required to be paid in advance. And, this would entitle the applicant to read the entry which implies that it is a service for consideration to have it read to him, but it shall not entitle him to take a copy of entry. If the search proves fruitless the fee shall not required to be refunded.
In addition, the Registration Rule specifically prescribes what type of precaution should be taken for search and it imposes a duty on the concerned officers. Further search is required to be carried out in the presence of the Registering Officer and the copy of entry cannot be made from any book until registering officer has scrutinized the entry. The relevant Rules 137 to 139 are as under:
“137(i) When an application for a search is presented and the requisite fees have been paid, the registering officer shall enquire whether the applicant will himself make the search or desire that it should be made by the office establishment. When a clerk is deputed to make the search, the name of the clerk deputed shall be noted on the application. As soon as the search is completed, the result or a reference to the certificate of encumbrance showing the result, shall be noted on the application by the clerk, and signed by him.
(ii) Whenever an entry found on search is read out to an application under rule 133, a note shall be made on the application to the effect that this has been done and, when the applicant does not require a copy of such entry, this fact shall also be noted on the application and the signatures of the applicant obtained thereto.
(138) All inspections and searches of books and indexes shall take place in the presence of the registering officer.
(139) A copy of an entry shall not be made from any book until the registering officer has scrutinized the entry generally.
The aforesaid Rules, therefore, require strict vigil by the Registration Officer before issuing Encumbrance Certificate and it specifically provides that Encumbrance Certificate should contain complete list of all encumbrances affecting the property in question. If that is not done, it would certainly amount to deficiency in service or patent negligence in discharge of duty which is in the nature of rendering service.
After search, if the certificate of encumbrance is sought for, the same is to be provided as stated under Rules 142 and 143.
with the similar contention the Madras High Court in R.Ravichandran
Vs. The State of
Further, it held that no constitutional system can, either on State necessity or public policy condone negligent functioning of the State or its officers and negligence is failure to use such care as a reasonable, prudent and careful person would use, under similar circumstances. [N.Nagendra Rao Vs. State of Andhra Pradesh, reported in AIR 1994 SC 2663 and Common Cause Society Vs. Union of India (1999) 6 SCC 667]. It is the doing of some act which a person of ordinary prudence would not have done under similar circumstances or failure to do what a person of ordinary prudence would have done under similar circumstances. Negligence also is an omission to do some thing which a reasonable man, guided by those ordinary considerations which ordinarily regulate human affairs, would do, or the doing of something which a reasonable and prudent mane would not do. In that case after considering the deficiency in issuance of encumbrance certificate the Court awarded compensation of Rs.60,000/-.
We have to state that the High Court was dealing with the petition under Articles 226 and 227 and has not considered the provisions of the Consumer Protection Act. But at the same time the High Court heavily relied upon the decision of the Apex Court in Lucknow Development Authority Vs. M.K.Gupta (1994) 1 SCC 243 and other Judgments wherein it has been held that for deficiency in service in case of statutory duty also proceedings for the damages under the tort is maintainable against the statutory authorities.
Now, we would consider the ratio of the decision rendered in S.P.Goel’s case (Supra) wherein the Apex Court considered the provisions of the Consumer Protection Act, Indian Registration Act and Stamp Act. In that case, Mr.S.P.Goel presented a document for registration, contending that it was a “will” executed in his favour, as well as in favour of his wife by one P.N.Mishra, before the Sub-Registrar, New Delhi, who instead of registering the document impounded it as he was of the opinion that it was not a will but a deed of conveyance which was not duly stamped. He, therefore, sent the document in original to Collector of Stamps for action under Section 40 of the Stamps Act. While the matter was pending before the Collector of Stamps, the Complainant approached the District Consumer Disputes Redressal Commission, for various reliefs including the direction for registration of document as “will” as also for supply of certified copy thereof, besides compensation for harassment since 1987.
The District Forum allowed the complaint. The Appeal was dismissed by the State Commission. The National Commission allowed the revision and held that the District Forum and the State Commission had no jurisdiction to entertain and adjudicate upon the claim, particularly, he was not a consumer within the meaning of the Consumer Protection Act, 1986.
In that context the Apex Court, after discussing the relevant aspects, observed thus:
“27. Running through the twin Acts, namely, the Registration Act and the Stamp Act, we could not, at any stage, reconcile ourselves to the idea espoused by the appellants counsel, that there is an element of commercialism involved in the whole process of registration of instruments or payment of Stamp Duty and that the executant of an instrument, at the time of its presentation for registration, becomes a consumer entitled to service within the ambit of Consumer Protection Act. The reasons are many.
28. The Registration Act, as also the Stamp Act, are meant primarily to augment the State revenue by prescribing the stamp duty on various categories of instruments or documents and the procedure for collection of stamp duty through distress or other means including criminal prosecution as non-payment of stamp duty has been constituted as an offence. Payment of registration fee or registration charges including charges for issuing certified copies of the registered documents or fee for the inspection of various registers or documents kept in the Registrars or Sub-Registrars office etc. constitute another component of State revenue.
29. In this situation, therefore, the person who presents a document for registration and pays the stamp duty on it or the registration fee, does not become a consumer nor do the officers appointed to implement the provisions of the two Acts render any service within the meaning of Consumer Protection Act. They only perform their statutory duties (some of which, as earlier indicated, are judicial or, at least, quasi-judicial in nature) to raise and collect the State revenue which is a part of the sovereign power of the State.
Thereafter, the Court referred to its earlier decision in the case of Lucknow Development Authority Vs. M.K.Gupta (1994) 1 SCC 243 and observed as under:
“……. we also reiterate that a Government officer may be held liable in tort if, in the discharge of his official administrative duties, he acts maliciously or with oblique motive or mala fide but the position in the instant case is different in many vital respects”.
The Court further observed:
“31. The observations of this Court extracted above on which strong reliance has been placed by the learned counsel for the appellant are undoubtedly true and we also reiterate that a government officer may be held liable in tort if, in the discharge of his official administrative duties, he acts maliciously or with oblique motive or mala fide but the position in the instant case is different in many vital respects.”
Thereafter, the Court referred to Sec.86 of the Registration and held as under:
“37. Apart from the above, Section 86 of the Registration Act provides as under:
“86. Registering Officer not liable for thing bona fide done or refused in his official capacity. No Registering Officer shall be liable to any suit, claim or demand by reason of anything in good faith done or refused in his official capacity.”
38. This section provides complete protection to the Registering Officer for things done bona fide by him under the Act. It is obvious that action which is not bona fide or which is malicious will not be protected.
39. These provisions were not noticed by this Court in Lucknow Development Authority (Supra) obviously because this aspect of the matter was not involved therein. In the instant case, neither the appellant pleaded nor has the District or the State Forum recorded any finding that the refusal of the Registering Officer or the inaction of the Collector of Stamps was malicious, motivated or mala fide. We need not, therefore, further delve into the matter.”
Therefore, it is to be stated that in S.P.Goel’s case the Court has not differed from the ratio laid down in the case of Lucknow Development Authority (Supra).
Hence, we would refer extensively to the discussion in the case of Lucknow Development Authority. The Apex Court while interpreting the Preamble of the Consumer Protection Act, 1986 observed thus:
“……..Various legislations and regulations permitting the State to intervene and protect interest of the consumers have become a haven for unscrupulous ones as the enforcement machinery either does not move or it moves ineffectively, inefficiently and for reasons which are not necessary to be stated. The importance of the Act lies in promoting welfare of the society by enabling the consumer to participate directly in the market economy. It attempts to remove the helplessness of a consumer which he faces against powerful business, described as, ‘a network of rackets’ or a society in which, ‘producers have secured power’ to ‘rob the rest’ and the might of public bodies which are degenerating into storehouses of inaction where papers do not move from one desk to another as a matter of duty and responsibility but for extraneous consideration leaving the common man helpless, bewildered and shocked. The malady is becoming so rampant, widespread and deep that the society instead of bothering, complaining and fighting against it, is accepting it as part of life. The enactment in these unbelievable yet harsh realities appears to be a silver lining, which may in course of time succeed in checking the rot. ……..”
Thereafter, the Court noted that although the legislation is a milestone in the history of socio economic legislation and is directed towards achieving public benefit and on a plain reading of the provisions unaided by any external aid of interpretation it applies to building or construction activity carried on by the statutory authority. And, finally, after considering the provisions of Section 2(1)(o) held that the main clause of the meaning of service is very wide. It applies to any service made available to potential users and no distinction can be drawn between the private service provider and the public service provider. The Court observed:
“No distinction can be drawn in private and public transport or insurance companies. Even the supply of electricity or gas which throughout the country is being made, mainly, by statutory authorities is included in it. The legislative intention is thus clear to protect a consumer against services rendered even by statutory bodies. The test, therefore, is not if a person against whom complaint is made is a statutory body but whether the nature of the duty and function performed by it is service or even facility.”
The Court also observed :
“…….. A government or semi-government body or a local authority is as much amenable to it would be a service to the society if such bodies instead of claiming exclusion subject themselves to the Act and let their acts and omissions be scrutinized as public accountability is necessary for healthy growth of society”.
The Court also observed:
“…….. A public functionary if he acts maliciously or oppressively and the exercise of power results in harassment and agony then it is not an exercise of power but its abuse. No law provides protection against it. He who is responsible for it must suffer it. Compensation or damage as explained earlier may arise even when the officer discharges his duty honestly and bona fide. But when it arises due to arbitrary or capricious behavior then it loses its individual character and assumes social significance. Harassment of a common man by public authorities is socially abhorring and legally impermissible. It may harm him personally but the injury to society is far more grievous. Crime and corruption thrive and prosper in the society due to lack of public resistance. Nothing is more damaging than the feeling of helplessness. An ordinary citizen instead of complaining and fighting succumbs to the pressure of undesirable functioning in offices instead of standing against it. Therefore the award of compensation for harassment by public authorities not only compensates the individual, satisfies him personally but helps in curing social evil. It may result in improving the work culture and help in changing the outlook. Wade in his book Administrative Law has observed that it is to the credit of public authorities that there are simply few reported English decisions on this form of malpractice, namely, misfeasance in public offices which includes malicious use of power, deliberate maladministration and perhaps also other unlawful acts causing injury. One of the reasons for this appears to be development of law which, apart, from other factors succeeded in keeping a salutary check on the functioning in the government or semi-government offices by holding the officers personally responsible for their capricious or even ultra vires action resulting in injury or loss to a citizen by awarding damages against them. ………..”
From the ratio, as discussed in the aforesaid two cases it is apparent that if the statutory authority is discharging sovereign function as stated in the S.P.Goel’s case then the concerned officer cannot be proceeded under the Consumer Protection Act, 1986. But, if the officer is rendering statutory service on the basis of rules and regulations by charging fee he would be liable to be proceeded against under the Consumer Protection Act, 1986, because complainant avails of services by paying statutory fees.
It is to be stated that the Joint Sub-Registrar or the Registrar appointed under the Indian Registration Act have to discharge duel functions. One is statutory and the other is administrative in the nature of rendering of service or facility to the consumers.
Apart from this, malice in law would mean ill will against a person but in the legal sense it means a wrongful act done intentionally without just cause or excuse. (Re. Chairman & MD, BPL Ltd. Vs. S.P.Gururaja (2003) 8 SCC 567 at 580). Similarly, in the case of State of A.P. Vs.Goverdhanlal Pitti (2003) 4 SCC 739 the Apex Court held as under:
“12. The legal meaning of malice is “ill-will or spite towards a party and any indirect or improper motive in taking an action”. This is sometimes described as “malice in fact”. “Legal malice” or “malice in law” means “something done without lawful excuse”. In other words, “it is an act done wrongfully and wilfully without reasonable or probable cause, and not necessarily an act done from ill feeling and spite. It is a deliberate act in disregard of the rights of others”. (See Words and Phrases Legally Defined , 3rd Edn., London Butterworths, 1989.)
Further, if we consider this from another angle it would be clear that getting title clearance certificate or encumbrance certificate, is optional service available to the consumer. Because:
Firstly for the title clearance of the property search can be carried out by the Complainant himself. If he commits any fault, he has to blame himself.
Secondly, search can also be carried out by his representative i.e. either Advocate or Solicitor or someone well versed on the subject. If he commits any mistake and does not record encumbrances and transfers of immovable property, then there would be deficiency in service on the part of such person and he would be liable to pay compensation for the deficiency in service.
Thirdly, the same function can be discharged by the Joint Sub-Registrar or his deputy. If he commits mistake in noting down the transfers or encumbrances qua the particular immovable property/properties, then there is no reason to hold that he would not be liable to compensate for the said deficiency in service. The function which he is discharging for the purpose of search and issuing the encumbrance certificate is a service or a facility which is required to be performed under the Rules for consideration. Further issuance of encumbrance certificate has nothing to do with the augmentation of the State revenue. This would be a case of hiring or availing of services or facilities by the consumers who deposit the fees for search and or issuance of encumbrance certificate. Consumers may avail the services of the Registering Officer or may not avail his services and can avail services of advocates/solicitors or other well-versed person.
Further, as discussed above, Rule 143 mandatorily provides that the Certificate of Encumbrance shall contain complete list of all the acts and encumbrances affecting the property in question and search is required to be carried out in the presence of Registering Officer. Even a copy of the entry is not to be made from any book until the Registering Officer has scrutinized the entry generally. Despite this statutory vigil, if the concerned officer acts negligently in omitting to note the encumbrances or transfer of immovable property, it would certainly cause prejudice to valuable rights of consumer/complainant.
The judgment in S.P. Goel’s case (Supra) which is passed by the Apex Court and is sought to be relied upon is only with regard to registration of documents, which is a statutory function and mandatory requirement for effective transfer of immovable property. In that case the Registrar was exercising his quasi judicial function of deciding whether the so called ‘Will’ was a ‘Conveyance Deed’ or not. In his opinion it was a Conveyance Deed and, therefore, he impounded the same and sent it to the Collector, an Authority under the Stamp Act, for appropriate valuation of stamp duty. That action was challenged before the Consumer Fora and in that context the Court held that it was a statutory/sovereign function under the Act.
Secondly, even S.P.Goel’s case, it has been made clear that if there is deficiency in service by an act which is not bona fide or which is malicious, the Officer will not be protected. This view is taken on the basis of the decision rendered in Lucknow Development Authority (Supra). If there is total negligence in discharge of duties it would amount to malice in law or in any case it cannot be termed as bona fide act.
In view of the aforesaid discussion, we hold that in case of deficiency in service in issuing erroneous and defective encumbrance certificate, the concerned officer including the Joint Sub-Registrar would be liable for deficiency in service and could be proceeded under the Consumer Protection, 1986. Hence, we confirm the order passed by the State Commission, Tamil Nadu and dismiss the Revision Petition. There shall be no order as to costs.