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
Shanmugapuram, Palani:2,
Dindigul District … Petitioner
Versus
TMT. Maragatham,
W/o Rajendran
14, Thiruvalluvar Salai
Shanmugapuram, Palani … Respondent
BEFORE :
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.
DATED
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.
Submissions:
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.
As
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
Findings:
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.
For
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
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.
Dealing
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.
Sd/-
.……………………………….J.
(M.B. SHAH)
PRESIDENT
Sd/-
.………………………………….
(RAJYALAKSHMI RAO)
MEMBER