A sells a piece of land for 99/- to B on 4th January, 1973 by means of an unregistered sale-deed. On 5th February 1974 he (A) sold the same very land to C by means of a registered sale-deed. Who out of B and C shall be owner of the aforesaid land?

The land was sold for only Rs 99 — a sum below the Rs 100 threshold prescribed in Section 17(1)(b) of the Registration Act, 1908 — the sale-deed in favour of B did not require compulsory registration at all, and B therefore acquired complete and valid title on 4th January 1973. Consequently, when A purported to sell the very same land to C on 5th February 1974, A had no title left to convey, and C's registered sale-deed, however formally impeccable, could not confer ownership on him.

The Governing Provision — Section 17(1)(b)

Section 17(1)(b) of the Registration Act, 1908 makes compulsorily registrable "other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property." The italicised qualification is decisive: the compulsory registration requirement under this clause is expressly confined to instruments relating to property of the value of Rs 100 and upwards. Where the value of the property or the transaction is below that threshold, the instrument falls outside the compulsory registration net of Section 17(1)(b) altogether.

Section 54 of the Transfer of Property Act — The Corresponding Rule for Sales

This position is reinforced by Section 54 of the Transfer of Property Act, 1882, which governs the mode of transfer for sales of immovable property. Section 54 provides that a sale of tangible immovable property of the value of Rs 100 and upwards can be made only by a registered instrument; but in the case of tangible immovable property of a value less than Rs 100, the sale may be made either by a registered instrument or by delivery of the property. Reading Section 17(1)(b) of the Registration Act together with Section 54 of the Transfer of Property Act, it is settled law that a sale-deed relating to property valued below Rs 100 does not require registration to effect a valid and complete transfer of title.

Application to the Sale in Favour of B

Since A sold the land to B for a consideration of Rs 99 — a sum below the statutory threshold of Rs 100 — the sale-deed executed in B's favour on 4th January 1973 did not fall within the compulsory registration requirement of Section 17(1)(b) at all. Its non-registration is therefore of no legal consequence whatsoever; the document, though unregistered, was fully competent to pass complete title in the land to B on the very date of its execution, exactly as though it had been executed by way of a registered instrument, or even through mere delivery of possession, both alternatives being equally valid under Section 54 of the Transfer of Property Act for property of this value.

Effect of the Subsequent Registered Sale to C

By the time A purported to execute the second sale-deed in favour of C on 5th February 1974, A had already divested himself of all title, right, and interest in the land — he had nothing left to convey. This is not a case that falls to be decided by reference to Section 48 or Section 50 of the Registration Act (which govern the relative priority between a registered instrument and a subsequently created unregistered or oral transaction relating to the same property); those provisions presume that the transferor possessed some interest capable of being transferred at the time of the second transaction. Here, the fundamental and threshold question is not one of priority between competing instruments, but of the vendor's competence to transfer at all. The elementary principle of property law, nemo dat quod non habet — no one can give what he does not have — governs the outcome: since A no longer owned the land on 5th February 1974, having already transferred it wholly and completely to B thirteen months earlier, the registered sale-deed executed in favour of C is incapable of conferring any title on C, however solemn and complete its form and registration may be.

Registration Cures Formal Defects, Not Absence of Title

It bears emphasising that the sanctity attaching to a registered document, and the priority conferred by Sections 48 and 50 of the Registration Act, operate only to determine which of several competing claims — each independently capable of being valid — shall prevail, or to protect a registered instrument against oral or unregistered dealings that have not yet matured into completed transfers. Registration is not, and has never been treated as, an alchemy capable of conjuring title out of nothing; if the transferor's title has already been extinguished by an earlier, wholly valid transaction — as it had been here, by the sale to B — no amount of subsequent formality, registration, or public notice can revive that extinguished title so as to pass it a second time to a different transferee.

Illustration

Suppose A owns a small plot of land worth Rs 90. On 1st March, A sells this plot to B for Rs 90 by an unregistered sale-deed. Because the value of the property is below Rs 100, this sale-deed does not require registration under Section 17(1)(b), and B becomes the full and complete owner of the plot on that very day. If A, six months later, purports to sell the identical plot to C by a duly registered sale-deed, C acquires nothing, because A, having already sold the plot to B, had no subsisting interest left to convey to C — the registration of C's deed, though formally valid and complete in itself, is powerless to create title in property that its vendor no longer owned.

Comparative Summary