Registration of Sale Deed Relates Back to Date of Execution for Accrual of Cause of Action

The Appellant (Plaintiff) filed a civil suit on 12-04-2022 seeking to declare a sale deed dated 05-10-2021 null and void, alleging it was a nominal deed executed as security for a loan.

The Sub-Registrar had referred the deed to the Collector of Stamps under Section 47A of the Indian Stamp Act due to undervaluation.

The Defendants filed an application under Order 7 Rule 11(d) of the CPC, arguing that since the deed was unregistered on the date of filing, no title had passed and no cause of action had arisen.

The Trial Court allowed the application and rejected the plaint on 30-01-2025.

During the pendency of the appeal, the deficit stamp duty was paid, and the registration process progressed.

1. Whether a cause of action arises for challenging a sale deed on the date of its execution even if the registration is pending due to stamp duty proceedings.

2. Whether a registered document operates from the date of its execution or from the date of its actual registration under the Registration Act, 1908.

Section 47 of the Registration Act, 1908, which mandates that a registered document operates from the time it would have commenced if no registration was required, rather than the date of registration.

The Supreme Court precedent in Har Narain (dead) by LRs. v. Mam Chand (dead) by LRs. (2010) 13 SCC 128, which established that the registration of a document relates back to the date of its execution.

Section 54 of the Transfer of Property Act, 1882 regarding the requirement of registered instruments for the sale of immovable property.

The Court reasoned that the Trial Court erred in law by holding that no cause of action existed simply because the deed was unregistered at the time the suit was filed.

Per Section 47 of the Registration Act, once a document is registered, its legal effect relates back to the date of execution (05-10-2021).

The Court noted that the execution of the deed and its submission for registration were sufficient to invoke a cause of action for the plaintiff to challenge the transaction.

Specifically, the subsequent payment of deficit stamp duty by the defendants during the appeal process validated that the registration relates back to the original date of execution, thus confirming a valid cause of action existed when the suit was instituted.

The Court held that the suit was maintainable as the cause of action arose upon execution. The appeal was allowed, and the matter was remitted to the Trial Court for a decision on the merits.

The parties were directed to appear before the Trial Court on 15-05-2026.