The Madras High Court has ruled that sale documents relating to properties frozen by the Income Tax Department or a civil court cannot be registered, setting aside an earlier order that had directed a sub-registrar to register such a transaction in Coimbatore district.
The ruling came in an appeal filed by Ashiq Ali and Ajjur Mohamed, who had obtained an order from a civil court freezing the property. A division bench comprising Justices Subramaniam and Rajesh Vivekanathan heard the matter, according to a report by Dinamalar.
The dispute concerns property owned by Imran Basha, which Mahesh Kannan had agreed to purchase. The sub-registrar had refused to register the sale deed after the property was identified as being subject to freezing orders issued by the Income Tax Department and a civil court.
Kannan subsequently approached the Madras High Court. A single judge held that Section 22-B of the Registration Act restricted registration only in cases involving fraudulent or forged documents and directed the sub-registrar to register the sale deed immediately.
Ashiq Ali and Ajjur Mohamed challenged that direction before the division bench. Senior advocate Hasan Mohamed Jinnah, appearing for the petitioners, argued that the registration law barred the registration of a sale involving property that had already been frozen by a court or the Income Tax Department. He submitted that the single judge’s direction was contrary to law while the restraint order remained in force.
The division bench accepted the argument and held that there was a legal bar on registering sale documents involving frozen properties. It also said that when a sub-registrar refuses to register a document, the Registration Act provides alternative remedies for challenging that decision. A party therefore cannot directly approach the High Court when those statutory remedies are available, the bench said.
The court cancelled the single judge’s direction requiring registration of the sale deed. It also cancelled the sale deed if it had already been registered on the basis of that order.
The ruling places the status of an existing freezing order at the centre of the registration process. For prospective buyers, it underlines the need to examine whether a property is subject to orders from tax authorities or civil courts before proceeding with a sale. For registration offices, it confirms that a refusal involving a legally frozen property cannot be bypassed through a direction to complete registration while the restraint remains in force.
The court’s order also indicates that parties challenging a sub-registrar’s refusal must first use the remedies provided under the registration law. The immediate outcome in this case is the cancellation of the earlier registration direction and any sale deed registered under it.
