A obtained a loan from a bank. Bank asked A to furnish security. A accordingly executed a mortgage deed in favour of the bank. The mortgage deed was duly registered before the Sub-Registrar. Later on the bank came to know that the mortgage deed was deficiently stamped, deficiency being to the tune of Rs. 79,000/-. The Sub-Registrar issued a notice to A calling upon him to pay the deficient Court fee. A challenged the said notice before High Court in a writ petition contending that after registration the sub-registrar became functus officio. So no such notice asking him to make up the deficiency in Court fee could be issued by the Sub-Registrar. How would you deal with this plea of the petitioner?

It is correct that once the mortgage deed has been duly registered, the Sub-Registrar, functioning purely as a registering officer under the Registration Act, 1908, becomes functus officio and possesses no independent power thereafter to reopen the registration or himself demand the deficient stamp duty. However, this does not mean the deficiency cannot be recovered at all — the power to determine and recover deficient stamp duty on a registered instrument is a distinct power vested not in the Sub-Registrar qua registering officer, but in the Collector under the machinery of the Indian Stamp Act, 1899, and it is only if the notice has been issued by, or under the authority delegated to, the Collector (rather than by the Sub-Registrar acting purely in his capacity under the Registration Act) that it can validly survive the petitioner's objection.

Two Distinct Statutory Regimes at Play

The confusion in cases of this kind arises from conflating two separate statutes that operate at different stages and serve different purposes. The Registration Act, 1908 governs the act of registration itself — the process by which a document is presented, examined, and formally recorded in the books of the registering authority. The Indian Stamp Act, 1899, by contrast, governs the levy, adequacy, and recovery of stamp duty on instruments, and vests the power to determine questions of deficient stamping, and to recover such deficiency together with penalty, in the Collector — a separate statutory functionary, even though in practice the offices of Sub-Registrar and the officer exercising Collector's powers under the Stamp Act may sometimes be held by the same person or may work in close administrative coordination.

Functus Officio — The Correct Scope of the Doctrine

The doctrine that a Sub-Registrar becomes functus officio after registering a document is well established and has been consistently applied by several High Courts: once a document has been registered, the Sub-Registrar, acting as a registering officer under the Registration Act, exhausts his authority over that specific act of registration and cannot thereafter revisit, undo, or impose fresh conditions upon the registration he has already completed. This principle has been applied, for instance, to hold that a Sub-Registrar cannot, after registering a sale deed, refer the matter for determination of market value under provisions analogous to Section 47-A of the Stamp Act once registration is complete, since that referral power, if it exists at all, must be exercised before or contemporaneously with registration, not afterward, once the Sub-Registrar's task under the Registration Act has been discharged. Similarly, it has been held that a Sub-Registrar has no power to impound a document after it has already been registered, even if it later transpires that the document was not duly stamped, and that he cannot himself call upon the executant to make good any deficiency or impose a fine, precisely because his statutory role and power under the Registration Act came to an end the moment registration was completed.

The Deficiency Must Be Pursued Through the Collector's Independent Power Under the Stamp Act

This does not mean, however, that a deficiently stamped instrument escapes the consequences of under-stamping merely because it has already been registered. The Indian Stamp Act contains its own distinct machinery — principally Sections 33 and 40, and, in several states, special provisions analogous to Section 47-A — under which the Collector (a role sometimes assigned to the District Registrar or another designated authority, and occasionally to the same officer who also functions as Sub-Registrar, but acting in this altogether different statutory capacity) is empowered to examine an instrument, determine whether it bears sufficient stamp duty, and, if not, to call upon the person liable to pay the deficiency together with any applicable penalty. This authority is entirely independent of, and survives, the completion of registration; it is not extinguished by the fact that the Sub-Registrar, in his separate capacity as registering officer, has already become functus officio for the purposes of the registration itself. The correct legal position, therefore, is that while the Sub-Registrar cannot, wearing his registration hat, reopen the registration or himself demand payment of the deficiency by virtue of any power under the Registration Act, the Collector, exercising his distinct powers under the Stamp Act, remains fully competent to issue a notice calling for the deficient duty, and this power is not defeated by the plea of functus officio, which properly applies only to the registration function and not to the Stamp Act's independent machinery for recovery of deficient duty.

Time Limits Attach to the Collector's Power, Not an Absolute Bar

It should also be noted that the Collector's power to recover deficient stamp duty is not unlimited in point of time; several state amendments to the Stamp Act (and corresponding judicial pronouncements) impose an outer time limit — commonly a period of a few years, sometimes three, sometimes five, depending on the specific state's amendment — within which such recovery proceedings must be initiated after the date of registration, failing which the demand becomes time-barred. This furnishes A with a legitimate, alternative ground of challenge if the notice has been issued beyond such a prescribed period, but this is a distinct point from the broader argument that the Sub-Registrar is functus officio as such — the latter argument, taken at its highest, would only require that the notice be shown to have emanated from the correct authority (the Collector under the Stamp Act) rather than the Sub-Registrar acting under his now-exhausted powers of registration, and would not by itself defeat a properly issued notice from the Collector within the prescribed time.

Applying This to A's Case

On the facts, if the notice calling upon A to pay the deficient stamp duty of Rs 79,000 was issued by the Sub-Registrar purporting to act merely in his capacity as registering officer under the Registration Act — that is, treating the deficiency as something he himself could rectify or enforce post-registration — the petitioner's challenge would succeed to that extent, since such an action would indeed fall foul of the functus officio principle. If, however, the notice was issued by the same officer acting in his distinct statutory capacity as Collector (or delegate of the Collector) under the relevant provisions of the Indian Stamp Act — a capacity which the officer may validly hold concurrently with his role as Sub-Registrar — then the notice would be entirely valid and would not be defeated by the plea of functus officio, since that doctrine has no application to the Collector's independent and continuing power to recover deficient stamp duty. The writ court, in such a case, would need to examine the source of statutory authority actually invoked in the impugned notice, rather than accepting the bare label "Sub-Registrar" as conclusive of the officer's incapacity.

Illustration

If a mortgage deed is registered before the Sub-Registrar, and it is subsequently discovered that the instrument was deficiently stamped, the Sub-Registrar, having already completed the act of registration, cannot himself reopen that registration or issue a fresh demand for the shortfall in stamp duty purely by virtue of his powers under the Registration Act, since he has become functus officio for that purpose. If, however, the officer issuing the demand does so in his capacity as Collector under the Indian Stamp Act, invoking that Act's separate machinery for determining and recovering deficient duty, the demand remains valid and enforceable, subject only to any applicable limitation period prescribed for the exercise of that power.

Comparative Summary