SUPREME COURT INVALIDATES BIHAR RULE MANDATING MUTATION PROOF FOR PROPERTY SALE REGISTRATION UNDER REGISTRATION ACT:

The Supreme Court on Friday (November 7) struck down sub-rules (xvii) and (xviii) of Rule 19 of the Bihar Registration Rules, 2008, which required sellers to produce proof of mutation before registering a sale or gift deed. A Bench comprising Justice Pamidighantam Sri Narasimha and Justice Joymalya Bagchi held that these sub-rules, inserted through a 2019 amendment, were ultra vires the Registration Act, 1908. The Court ruled that the provisions imposed arbitrary restrictions on the constitutional right to acquire, hold, and dispose of property, thus violating the principles of fairness and legality in property transactions.

The Bench observed that the impugned sub-rules effectively empowered registering authorities to demand collateral evidence of ownership as a precondition for registration, thereby distorting the purpose of the Registration Act. The judges clarified that the Act only governs the procedural aspects of registration and not the verification of ownership. The Court found that introducing a requirement for proof of mutation, a process that is itself uncertain and incomplete in Bihar, placed an unreasonable and impractical burden on property owners. The Bihar Mutation Act, 2011, and the Bihar Special Survey and Settlement Act, 2011, were noted as being far from effective implementation, which further underscored the arbitrariness of the rule.

The Court emphasized that the rule unduly curtailed the freedom to sell property by mandating submission of Jamabandi or holding allotment certificates under the Bihar Land Mutation Act, 2011. Such requirements, it said, directly hindered the free and effective transfer of property and, in doing so, partially deprived citizens of their property rights. The judgment explained that delays or obstacles caused by unreasonable conditions like proof of mutation infringe upon the right to hold and dispose of property guaranteed under the Constitution. Since the mutation process in Bihar remains incomplete and inefficient, many landowners would be unable to comply, effectively preventing them from registering legitimate transactions. The Court thus held the provision to be arbitrary, unreasonable, and illegal.

On the question of authority, the Supreme Court held that the Inspector General of Registration had exceeded the scope of his powers under Section 69 of the Registration Act, 1908. The Court clarified that Section 69 only allows the making of rules concerning record custody, register maintenance, and office procedures, but does not authorize the creation of substantive preconditions for registration. Therefore, requiring proof of mutation before registration was beyond the Inspector General’s jurisdiction. The Bench also disagreed with the Patna High Court’s earlier ruling, which had upheld the sub-rules by invoking the general rule-making power under Section 69(1)(j).

Further elaborating on the distinction between registration and ownership, the Court reiterated that registration merely records a transaction and does not confer ownership rights. Registration serves as evidence of a transaction, not as proof of title, and India’s property system still operates under a presumptive titling regime. The judgment noted that this systemic flaw contributes to the fact that nearly two-thirds of civil cases in India are related to property disputes.

Highlighting the need for modernization, the Court called for comprehensive reform of land registration and ownership laws, including the Transfer of Property Act, 1882, Registration Act, 1908, and the Indian Stamp Act, 1899. It suggested exploring the use of emerging technologies such as blockchain to create a transparent, secure, and tamper-proof system for property ownership verification. The Bench recommended that the Law Commission of India examine the feasibility of adopting a conclusive titling framework, under which registration itself would serve as definitive proof of ownership, in consultation with the Union and State Governments.

Accordingly, the Supreme Court allowed the appeals filed by Samiullah and others, quashed the State’s 2019 notification introducing the disputed sub-rules, and set aside the Patna High Court judgment that had upheld them.