Prabhat Sadan Properties Pvt Ltd v. Municipal Corporation of Greater Mumbai

13. Following this rectification on 2nd September 2008, Prabhat Sadan applied to the Assistant Commissioner (Estates), the 3rd Respondent, to transfer the lease of the property in its favour. A public notice followed on 17th March 2009 and an indemnity bond came to be executed and furnished by the Bedis on 6th August 2009, by which they agreed to abide by the terms and conditions of the lease.

14. On 18th May 2010, the Administrative Officer (Estates) in the Leases Division made an endorsement on the lease transfer application requesting the Assistant Commissioner (Estates) to transfer the lease in favour of Prabhat Sadan “on payment of a premium amount” with legal charges. The amount then demanded was in the aggregate of Rs 5,46,81,701/-, and there was also included a charge for legal fees of Rs 7000/-.

15. In 2014, several Writ Petitions were filed in this Court against the MCGM regarding this transfer premium. Prabhat Sadan itself filed Writ Petition No. 1251 of 2014. All these were heard together. On 5th February 2015, the High Court passed an order directing that any assignment or leasehold rights that had taken place prior to 14th August 2012 would carry interest at 12% per annum on the transfer premium for the period after 14th August 2012.

16. Why is this date of 14th August 2012 crucial? It is on this date that the Mumbai Municipal Corporation (Amendment and Validation) Act, 2011 came to be published in the Government Gazette, and this inserted Section 92(dddd) in the Mumbai Municipal Corporation Act, 1888 (“the MMC Act”). Not only did it do so, but it did so with retrospective effect from, and now comes the third pivotal date, 22nd June 1993.

17. This immediately lends perspective to the controversy before us. If the effective date, so to speak, as claimed by Mr Jagtiani is 1988, then it is prior to the Section 92(dddd) insertion with effect from 22nd June 1993, and indeed no premium at all could have been demanded. That, as we said, will not now assist the Petitioners in regard to the amount of Rs 24,71,300/-, but it will certainly have a bearing on the present impugned claim of Rs 72,94,268/-.

18. On the other hand, if Mr Kumbhakoni, learned Senior Advocate for the MCGM is correct and the relevant date is the date of registration, 27th October 2006, then, clearly, following the High Court order of 5th February 2015 read with the 14th August 2012 amendment introducing Section 92(dddd) with effect from 22nd June 1993, the premium can: (i) not only be rightly demanded; (ii) will be computed as of 26th October 2006; and (iii) will carry interest at 12% per annum until payment or realisation.

19. On 20th August 2015, and this is a document that is never quite fully explained, the Deputy Municipal Commissioner approved Prabhat Sadan’s application of 2nd September 2008 for the transfer proposal subject to terms and conditions. A copy of that document is to be found at page 141 at Exhibit “K” to the Petition. There is a computation of various amounts in this communication of 20th August 2015, and we will take it that the aggregate amount totalled to Rs 52,23,982/-. The formal demand in this amount came from the MCGM on 1st September 2015 (Exhibit “L”, page 149) and a reminder followed on 19th January 2016, but now threatening 18% penal interest. A copy of that communication is at Exhibit “M” at page 150. The two demands of 2015 at Exhibits “L” and “M” are of course addressed to the Bedis because the transfer had not yet been approved in the first place.

20. On 12th February 2020, Prabhat Sadan wrote to the Municipal Commissioner asking for a quick disposal. This takes us to 12th May 2021, which is a noting by the Joint Municipal Commissioner of the 2nd September 2008 sanction.

21. There now followed on 1st June 2021, from the MCGM in a communication addressed to Prabhat Sadan, a demand for Rs 24,71,300/- as a transfer premium. This included 12% per annum interest on the transfer period from 14th August 2012 and penal interest at 18% per annum from 1st September 2015.

22. Prabhat Sadan paid the amount. It did not do so under protest. The MCGM issued a receipt acknowledging payment of this entire amount on 9th June 2021. That receipt is not marked as being subject to further revisions.

23. There then followed on 16th June 2021 a communication from the MCGM to Prabhat Sadan and signed by the 3rd Respondent, stating that the property now stood vested in Prabhat Sadan as the lessee subject to the terms and conditions of the lease. Prabhat Sadan was asked to get its name entered on the land records.

24. Mr Jagtiani submits that the matter ought really to have ended there and would have ended there but for the 13th January 2022 first impugned demand, a copy of which is at Exhibit “S” at page 168 with the translation from page 169. It is worth reproducing the communication in full at this stage. “Sir, Please refer to this Department’s demand letter dt.01.06.2021 and final letter of transfer dt. 16.06.2021. In the said transfer case, the demand letter was given to you on 01.06.2021 after the approval from Dy. Commissioner (I) No. MDD/1488 dt. 28.08.2015 and No. MDD/2807 dt. 27.05.2021. You have deposited the amount mentioned in that demand letter on 09.06.2021. However, while calculating the transfer premium the ready reckoner rate of the year 1988 was taken and accordingly the transfer premium has been recovered. The conveyance deed of 08.04.1988 has been registered vide above index-two on 27.10.2006. However, the Hon’ble High Court, in Petition No. 1251/2014 dt. 05.02.2015, has given directions that the transfer premium should be collected as per the ready reckoner of the year in which the document is registered. In the present case, the conveyance deed dt. 08.04.1988 has been registered on 27.10.2006. It was necessary to take the ready reckoner rate of the registration year 2006 and recover the transfer premium. Since the transfer premium has been calculated on the ready reckoner rate of 1988 instead of 2006, the recovery of the transfer premium has been made less by Rs. 72,94,268/-. The Accounts Department has brought this to the notice and has given directions to recover the transfer premium of Rs. 72,94,268/- with 12 percent penal interest on the said amount from 14.08.2012 till the date of payment. You are therefore advised to deposit the transfer premium of Rs. 72,94,268/- with 12 percent penal interest from 14.08.2012 till the date of payment in cash/cheque/demand draft (M.C.G.M). Please deposit the said amount within three months from the date of demand letter, else 12 percent penalty will be charged on the said amount from the dispatch of the said demand letter, which please note.” (Emphasis added)

25. Prabhat Sadan protested by its letter of 17th March 2022 and demanded that this notice be recalled and set aside. A copy of that representation is at Exhibit “T” at page 172.

26. On 31st May 2022, the 3rd Respondent issued another demand notice in the same amount of Rs 72,94,268/-. A copy of this is at Exhibit “U” at page 177 and the translation is at page 178 to

179. This is the background in which this Petition came to be filed on 28th September 2022.

27. We should immediately address the assertion in the demand quoted above that: the Hon’ble High Court, in Petition No. 1251/2014 dt. 05.02.2015, has given directions that the transfer premium should be collected as per the ready reckoner of the year in which the document is registered. This is demonstrably incorrect. We have seen the order of 5th February 2015 in Writ Petition No 1251 of 2014 (and connected matters). The only reference is in paragraph 13, and it is emphatically not a direction by the High Court. It is only a noting of the submission made on behalf of the MCGM. This is apart from the fact that the entire order is only an interim order and not a final one. Paragraph 13 of the 5th February 2015 order says: The learned counsel for the Municipal Corporation, however, submits that apart from the penalty for late submission of documents, the petitioners are also liable to pay interest at the rate of 18 % p.a. on the amount of transfer premium calculated for the period commencing from the date of registration of the assignment / transfer / or similar agreement, up to the date on which the application is filed with the Municipal Corporation for such transfer. No direction was made on this submission.

28. There is an Affidavit in Reply and in this the stand taken is that without registration, the original document, and we will now take it as the Assignment Deed of 1988, is wholly ineffective for all purposes and certainly inconsequential as against a third party, viz., the MCGM. An unregistered document has no impact whatsoever, especially in the context of a tax being imposed, is the consequential submission.

29. We pause briefly to note that there is a decision of a learned Single Judge of this Court (AA Sayed, J, as he then was) in Homi Villa Co-operative Housing Society Ltd & Ors v Municipal Corporation of Greater Mumbai & Anr.[1] In its Affidavit in Reply, the MCGM first attempted to not only distinguish the judgment but to say it was per incuriam. This position was subsequently and quite correctly, reversed with that statement being withdrawn on affidavit, and it was pointed out that in fact a Special Leave Petition filed by the MCGM had been dismissed. Mr Kumbhakoni has spent some time on this aspect of the matter. But we do not propose to let it delay us. His submission is that a dismissal of the Special Leave Petition simpliciter by the Supreme Court order of 16th September 2016 in Special Leave Petition No. 9057 of 2016 does not conclude the question of law as a decision of the Supreme Court. It is, therefore,

1 Writ Petition No. 3120 of 2014, decided on 25th February 2015. his submission that the decision of the learned Single Judge in Homi Villa cannot merely because of a dismissal of the SLP constitute a precedent that is binding on a Division Bench of this Court. We think this submission is correctly placed. We do not approach the Homi Villa decision as a precedent that binds us in a Division Bench. We do believe, however, that despite the dismissal of the SLP, and it is here that we agree with Mr Kumbhakoni, it is open to us in a Division Bench to affirm the findings of the learned Single Judge in Homi Villa just as much as we could do the reverse. Mr Kumbhakoni’s submission in this regard, therefore, will take him only part of the distance, which is to say that the decision of the learned Single Judge in Homi Villa does not bind the Division Bench. To that extent, but only to that extent, Mr Kumbhakoni is correct.

30. For completeness, we now reproduce Section 92(dddd) of the MMC Act as introduced by the amendment: “(dddd) All leases granted by the corporation of the immovable properties belonging to the corporation for whatever term shall be subject to the following conditions in addition to the conditions stipulated in the Lease-deed or Lease-agreement executed by the corporation, namely:—

(i) Leasehold rights in respect of the properties belonging to the corporation and given on lease may be further assigned or transferred only with the prior permission of the Commissioner, on payment of such premium on account of unearned income and transfer fees or charges at such rates as may be specified by the corporation, from time to time.

(ii) In the case of any contravention of the provisions of sub-clause (i), the lessee or transferor of such leasehold rights, shall be liable to pay penalty in addition to such premium and transfer fees or charges, at such rates as may be specified by the corporation, from time to time.”

31. There is now really no controversy about the application of this Section, nor is there any challenge to it in the Writ Petition itself. It is not Mr Jagtiani’s case that the Section is ultra vires or otherwise illegal and that no demand can ever be raised under it.

32. His reliance is, however, is founded entirely on a reading of Section 47 of the Registration Act, 1908. Now to understand this in context, we must appreciate that Section 47 falls in Part X of the Registration Act. This Part deals with the effects of registration and non-registration. Four sections are in this part, i.e., Sections 47 to

50. Obviously, any statute will have to be read contextually, and, as necessary, with other relevant sections when referenced.

33. Section 47 on its own reads as follows: “47. Time from which registered document operates— A registered document shall operate from the time from which it would have commenced to operate if no registration thereof has been required or made, and not from the time of its registration.”

34. We will pass over Section 48 for the present and set out for our purposes Section 49 which reads thus: “49. Effect of non-registration of documents required to be registered.—No document required by section 17 or by any provision of the Transfer of Property Act, 1882 to be registered shall— (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or

(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered; Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as evidence of any collateral transaction not required to be effected by registered instrument.”

35. Section 50 then says: “50. Certain registered documents relating to land to take effect against unregistered documents— (1) Every document of the kinds mentioned in clauses (a),(b), (c) and (d) of section 17, sub-section (1) and clauses (a) and (b) of section 18, shall, if duly registered, take effect as regards the property comprised therein, against every unregistered document relating to the same property, and not being a decree or order, whether such unregistered document be of the same nature as the registered document or not. (2) Nothing in sub-section (1) applies to leases exempted under the proviso to sub-section (1) of section 17 or to any document mentioned in sub-section (2) of the same section or to any registered document which had not priority under the law in force at the commencement of this Act.”

36. Sections 47 and 50 make reference either by necessary implication or, in Section 50, explicitly, to Section 17 of the Registration Act. This falls in Part III of the Registration Act. That part deals with documents that are registrable, and Section 17 deals with documents of which registration is compulsory.

37. Section 17 will have to be read with Part X because this tells us what documents must be registered (Section 17, Part III) and, if not, the consequence of non-registration, or, if registered, the consequences of such registration (Part X).

38. Mr Jagtiani’s submission is that, plainly read, Section 47 states that the document in question is operative or effective from the date expressed to be its operative or effective date, if no registration had been ‘required’ or ‘made’, and not from the time of its registration.

39. His emphasis is on three distinct aspects of this seemingly simple clause. First, he submits, the words “and not from the time of registration” cannot be ignored. They must be given their full weight and import. Mr Kumbhakoni’s submission, Mr Jagtiani argues, in effect defenestrates the entirety of these words. Second, the clause is not restricted to a situation where a document is not compulsorily registrable. It applies also to a situation where though a document may be compulsorily registrable, registration has not been ‘made’. This is clear if one reads the clause correctly in the following manner: “… would have commenced to operate if no registration thereof had been … made …”. It is not possible to merely rely on the words ‘had been required’ and to ignore the words ‘or made’. The words ‘or made’ refer to an act by a human agency, i.e., doing or not doing a certain thing. These two words do not relate to an operation of statute compelling or requiring the registration of a document. Mr Kumbhakoni’s submission, Mr Jagtiani says, fails entirely to account for these two words.

40. Third, Mr Jagtiani submits that the words ‘had been required’ are also probably being misinterpreted. They do not necessarily confine Section 47 to cases where documents are not compulsorily registrable. What is being done here, and this is the statutory intent and purpose, is to create an artificial fiction for a defined purpose which is to specify the effective date of a document. In that situation, the law says that one can proceed on the footing that the document was not compulsorily registrable or even that Section 17 did not exist for the purposes of, and only of, the application of what might be called the doctrine of relating back. But this third submission is not central to his construct. It is only an alternative argument. Since Mr Jagtiani did not pursue this line of argument, we have not thought it necessary to examine it further.

41. Much the same ground was covered by Sayed, J in Homi Villa. There, the plot was at Tilak Road, Dadar. A structure called Homi Villa stood on it. There was also a lease of 999 years and then there was a Deed of Gift followed by an Indenture of Assignment some time in 1987.A few years later, a cooperative society came to be formed. The society took an assignment in its favour. The society was the petitioner before Sayed, J. That society building went into redevelopment with a development agreement. The developer was the 2nd petitioner. The petitioners applied for a NOC for redevelopment. This was held up. One of the reasons was the failure to pay a transfer premium on all previous transfers, as also the proposed transfers. Further details are unnecessary. The argument before Sayed, J was that a later registration of the document would not relate back for the purposes of taxation. It was urged that it was only the date of registration that was relevant, and neither the date of execution nor the date of presentation for registration were at all relevant for the question of the premium under Section 92(dddd). A principal issue in that matter was whether the demand for transfer premium was at all payable in the first place. The argument was that the documents in question were registered only after the cut-off date and, therefore, Section 92(dddd) would apply, making the society liable to pay the transfer premium. Section 47 was invoked. In paragraph 17, Sayed, J held that on a plain reading of Section 47 it was apparent that upon registration of document its operation relates back to the time of execution.

42. It is this finding to which Mr Kumbhakoni takes considerable exception. This cannot possibly be the correct position in law, he submits. To begin with, if the document is not registered, it is completely inconsequential so far as the MCGM is concerned. Consider the present case, he submits. There is a set of assignors, namely, the Bedis. There is the Prabhat Sadan as the assignee. But until registration they are only proposed assignors and a proposed assignee. The MCGM is not required to recognise Prabhat Sadan as an assignee at all—until the assignment is registered. It is only at that point that Prabhat Sadan becomes the assignee recognised as such by the MCGM. That is, therefore, the effective date so far as MCGM is concerned.

43. The second branch of this argument is that one cannot simply approach a matter of interpretation of statute by proceeding on a hypothesis that some section may be considered for the present not to exist or not to apply. Section 17 exists and it is part of this statute. It makes certain documents compulsorily registrable. Nobody denies that the Deed of Assignment is compulsorily registrable. Therefore, he submits, correctly read, Section 47 has no application to a situation such as this. It certainly has no application in the manner the Petitioner suggests. If a document is not compulsorily registrable under Section 17 and is registered at some later point in time, then undoubtedly Section 47 will operate, and the document will be effective from the date of the document and not the date of registration. This is the plain meaning of the words ‘if no registration thereof had been required’. Mr Kumbhakoni submits that there is no known principle of interpretation by which these words can be read to mean ‘if no section making documents compulsorily registrable was on the statute book’. It is wholly impermissible to introduce an ambiguity when the language of the statute is plain, clear, and capable of only a single meaning.

44. As to the words ‘or made’, his submission is that this again takes its colour from the previous clause. Where a document is compulsorily registrable under Section 17, i.e., in a situation where without registration that document is ineffective, the words ‘or made’ cannot come to anyone’s rescue. The reason is simple: registration has got to be made. It is compulsory. It is the mandate of the statute. Very simply, no question arises of registration being ‘not made’. Even in this case, registration was indeed sought. It only came to be done later. The question is not of whether registration was made, but the impact of a later date of registration. Nobody denies that the document is an actual physical artefact or thing. Nobody denies that it was executed. Nobody denies that it was lodged for registration. But there it lay for whatever reason until 2006 and it was not until that date that it attained its full legal efficacy. Until that time, it was only a record of a transaction between parties. So far as the MCGM is concerned, it did not even recognise Prabhat Sadan on the basis of the unregistered document. It could not have done so.

45. Mr Kumbhakoni also points out that there is a possibility of invoking something akin to the mischief rule of interpretation. Registration of some kinds of documents is made universally compulsory under Section 17 for a given reason. This ensures that there are government records of transfers of valuable immovable property or other transactions as contemplated under Section 17. Imagine the chaos that would be loosed upon the world, he submits, if Section 17 was to be ignored and if the MCGM was required to act on whatever document came to it or was produced before it by some party, without passing through the checks and balances of compulsory registration. And indeed Section 17, he submits, does provide checks and balances. The executing party must appear before the registering authority. Execution must be admitted to the satisfaction of the registering authority. Registration is not simply a ministerial act to be taken for granted. This is why registration is compulsory, and this is why, in his submission, the doctrine of relating back has to be viewed in a correct perspective.

46. He invites our attention on the question of interpretation of Section 47, to the decision of the Supreme Court in Ghanshyam Sarda v JK Jute Mills Co Ltd.[2] We have seen this decision with great care, but we believe it does not necessarily assist Mr Kumbhakoni. What was before the Supreme Court was a contempt proceeding. There was a long and complex litigation history. It was alleged that in wilful disobedience of certain orders, some of the parties had sold away valuable capital assets for an insignificant sum. The transactions in question were defended as bona fide and the question that came before the Supreme Court is set out in one sentence at the forefront in paragraph 17, i.e., whether any alienation or transfer was effected after the date of one particular order of 8th May 2014.

47. The contemnors contended that there was a conveyance deed. It was dated 4th April 2013, well prior to the order of 8th May

2014. The entire consideration was paid. Title passed to the transferee before the order in question, and what followed after the order on 2nd July 2014 was a mere ministerial act of registration. Those documents were initially not accepted for insufficiency of stamp and registration fees. That was an irregularity that was cured and then the registration proceeded. Thus, it was argued, there was no contempt nor any wilful disobedience of the 8th May 2014 order.

48. It is in this context that we must read paragraphs 18 and 19 of the judgment: “18. The Order of 08.05.2014 had directed that “…. capital assets of the company shall not be disposed of without taking permission of this Court”. The expression “shall not be disposed” in the context connotes action or process of sale of assets. Going by Section 54 of the Transfer of Property Act, 1882, transfer of any tangible immovable property of the value of Rupees hundred and upwards can be made only by a registered instrument. The expression ‘only’ in the Section is significant. The transfer comes into effect and becomes valid and effective only by a registered instrument. It is true that the document was sought to be registered in April, 2013 but the registration in question was duly effected only on 02.07.2014. In the eye of law, it is this document registered on 02.07.2014 which alone effectuates transfer of interest in Katihar property in favour of the transferee. The transfer was thus effected on 02.07.2014, i.e., well after the Order of 08.05.2014[3] In Suraj Lamp & Industries Pvt Ltd v State of Haryana & Anr,[4] this Court had observed as under:

19. The document dated 04.04.2013 did not by itself create any interest nor did the title pass upon execution of such document on 04.04.2013 but it was only after the registration on 02.07.2014 that the title in Katihar property passed from the Company in favour of the transferee. The submission of the contemnors however, is that by virtue of Section 47 of the Registration Act, the document in question would operate from 04.04.2013. In our view, the principle embodied in Section 47 of the Registration Act is completely for different purposes. In so far as the issue of transfer is concerned, Section 54 of the Transfer of Property Act is the governing principle, which is quite clear. It is the date of registration of document which is crucial inasmuch as the transfer is effected and the title passes only upon registration. Viewed thus, it is clear that Katihar property was transferred in the teeth of the Order of 08.05.2014 and ex facie there has been violation of the Order passed by this Court. It is crucial to note that on 08.05.2014, the company had appeared on caveat before this Court and certainly had express knowledge about the Order of 08.05.2014. It was party to the proceedings and was bound by the order passed by this Court in every respect.”

49. As the emphasized portion of the judgment shows, the transfer comes into effect on registration, i.e., title would pass on registration. The Supreme Court referenced its decision in Suraj Lamp & Industries Pvt Ltd (2) v State of Haryana & Anr[5] in the context of Sections 54 and 55 of the Transfer of Property Act, 1882 to say that without registration no title would pass, and no interest could be created in immovable property, except to the limited extent contemplated by Section 53-A. A mere agreement of sale was not a conveyance. That required a registration document.

50. In paragraph 19, the Supreme Court considered the effect of Section 47 and held that the principle of that Section is for a different purpose than that which the Supreme Court was concerned. As far as the Supreme Court was concerned, i.e., to see whether on the date of its order, there was or was not a violation, and therefore contempt, it was Section 54 that would have governed. What the Supreme Court held is that after the 8th May 2014, there was no possibility of any party proceeding with the registration of the document and, therefore, the Court held that there was an ex facie violation of the order passed by the Court.

51. But, and this is what is against Mr Kumbhakoni, consider the consequence if that registration had happened not on 2nd July 2014 but before the order of 8th May 2014. Had that been so, there would have been no doubt that the transfer would have been fully effected 5 (2012) 1 SCC 656: (2012) 1 SCC (Civ) 351. not from the date of registration, but from 4th April 2013, namely the date of the document.

52. The Supreme Court decision in Ghanshyam Sarda does not actually bear out the proposition that Mr Kumbhakoni seeks to canvass before us. The MCGM is not concerned with the passing of property title. It is only concerned with the demand for a transfer premium. The date of registration will determine when the demand can be made — and there is no possibility of a demand without registration of the transfer or assignment document. But this does not mean that the effective date of the document can be ignored. The transfer is sought not from the date of registration but from the effective date of the document; hence Section 47. This means, in our view, that while the MCGM can make a demand only after registration, the rate or amount of the demand has to be reckoned with regard to the effective date of the document, not the date of registration. The other view, the one canvassed by Mr Kumbhakoni, yields an anomaly, quite dramatically illustrated by this case: it would mean that while the transfer is effective from the date of the document, for all the time between the date of the document and the much later date of registration, MCGM could raise no demand. The reason why MCGM chooses the later date is clear: the fact that the rise in property rates far outstrips any interest computation at 12% per annum. But only because there is more money to be demanded by using a later date does not answer the resultant anomaly.

53. We turn next to the decision cited by Mr Kumbhakoni in the case of Ram Saran Lall & Ors v MST Domini Kuer and Ors.[6] This was a decision by a five-Judge Bench of the Supreme Court. The parties were all Hindus, but it was not in dispute that between them and by custom, the Mohammedan Law of pre-emption applied. There was a demand for enforcement of rights after an alleged sale being completed. The making of the demand was undisputed. The question was, when was the sale completed? Paragraphs 6, 7 and 8 of the judgment read: “6. Section 54 of the Transfer of Property Act provides that sale of tangible immovable property of the value of rupees 100 and upwards, which the house with which we are concerned is, can be made only by a registered instrument. Section 3 of this Act defines “registered” as registered under the law for the time being in force regulating the registration of documents. This, in the present case, means the Registration Act of 1908. It is not in dispute that the registration under the Registration Act is not complete till the document to be registered has been, copied out in the records of the Registration Office as provided in Section 61 of that Act. It was therefore contended in the High Court that when a sale had to be made by a registered instrument it became complete only on the instrument of sale being copied in the books of the Registration Office. The High Court accepted this view and held that the sale in the present case, therefore, became complete on the completion of the registration of the instrument of sale which was done on February 9, 1946 when the instrument was copied out in the books of the Registration Office. In this view of the matter, the High Court came to the conclusion that the appellants were not 6 (1962) 2 SCR 474: AIR 1961 SC 1747. entitled to enforce their right of pre-emption because they had not made the preliminary demand after the completion of the sale as the law required them to do, but before, that is, on February 2, 1946.

7. In answer to this view of the High Court, the learned Attorney-General appearing for the appellants says that the High Court overlooked Section 47 of the Registration Act the effect of which was to make a registered document operate from the time from which it would have commenced to operate if no registration thereof had been required and not from the time of its registration. His contention is that once a document is registered, as the deed of sale in this case was, it begins to operate from the time it would have otherwise operated and therefore, the position in this case is that the sale became operative and hence complete on January 31, 1946. The learned Attorney-General further contends that the proper construction of the deed of sale was that it became operative from the day it was executed and that if it was not so, it was not a sale but could only be an agreement to sell in which latter case his clients, though this present suit might fail, would be entitled, if they so desired, to enforce their right of pre-emption when the sale was completed in pursuance of that agreement. As authority in support of his contention that in view of Section 47 of the Registration Act the sale in the present case must be deemed to have been completed on the day the instrument was executed, the learned Attorney-General relied on Bindeshri v Somnath Bhadry[7] and Gopal Ram v

8. We do not think that the learned Attorney-General’s contention is well founded. We will assume that the learned 7 AIR (1916) All 199. 8 AIR (1926) All 549. Attorney-General’s construction of the instrument of sale that the property was intended to pass under it on the date of the instrument is correct. Section 47 of the Registration Act does not, however, say when a sale would be deemed to be complete. It only permits a document when registered, to operate from a certain date which may be earlier than the date when it was registered. The object of this section is to decide which of two or more registered instruments in respect of the same property is to have effect. The section applies to a document only after it has been registered. It has nothing to do with the completion of the registration and therefore nothing to do with the completion of a sale, when the instrument is one of sale. A sale which is admittedly not completed until the registration of the instrument of sale is completed, cannot be said to have been completed earlier because by virtue of Section 47 the instrument by which it is effected, after it has been registered, commences to operate from an earlier date. Therefore, we do not think that the sale in this case can be said, in view of Section 47, to have been completed on January 31, 1946. The view that we have taken of Section 47 of the Registration Act seems to have been taken in Tilakdhari Singh v Gour Narain.[9] We believe that the same view was expressed in Nareshchandra Datta v Gireeshchandra Das10 and Gobardhan Bar v Guna Dhar Bar.11”

54. Now, paragraph 8 emphasized above reflects precisely the question that we put to Mr Kumbhakoni in regard to Section 47. 9 AIR (1921) Pat, 150. 10 (1935) ILR 62 Cal. 979. 11 ILR (1940) II Cal. 270. This is the kernel of Section 47. It begins to operate only after there is registration. Obviously, it has no application at all to a document that is unregistered because it tells us the consequence of registration of a document. This Section has nothing to do with “completion” of registration or completion of sale, if the document itself is an agreement of sale. The emphasis by Mr Kumbhakoni is, we believe, misplaced. The question is not one of completion of the sale. That might have been an issue as between the Bedis and Prabhat Sadan. It is inconsequential so far as the MCGM is concerned.

55. To assess Mr Kumbhakoni’s argument, we must ask that so far as the property is concerned, and now that the document is registered, will the MCGM treat Prabhat Sadan as the lessee of the property since 2006 or since 1988? That is a long period of time and it is difficult now, after registration, to see how the MCGM could possibly say that between 1988 and 2006, it will only look to the Bedis as the lessees and not to Prabhat Sadan.

56. It is for this reason that we do not think there is much to be gained by a further examination of the decision cited in case of Nabir Ganai v Mohd Ismail Ganai & Ors.12

57. For this reason too, we do not think that the reliance by Mr Kumbhakoni on the decision of a Division Bench of the Calcutta High Court in the case of Commissioner of Gift Tax v Aloka Lata Sett 12 1960 SCC OnLine J&K 8: AIR 1960 J&K 112. & Ors13 commends itself to application to the case at hand. Reliance was placed on paragraphs 5 and 8, and Sections 122 and 123 of the Transfer of Property Act, 1882 in the context of a deed of gift. This is cited for the proposition that Section 47 is a protection only interpartes but, as regards third parties, the effective date is the of registration. But, as we noted, this is correct only to the limited extent of determining when MCGM could make the demand. It is unrelated to the amount of the demand.

58. To a similar effect is the reliance by Mr Kumbhakoni on the decision of a Single Judge of the Madras High Court in Thulasimani Ammal v Commissioner of Income Tax.14 There was a question of a deed of gift and its effective date. Section 47 was relied on in paragraph 13. It was held that it is only the registration of the document that would complete it. The learned Single Judge held that although it may have an effect from an anterior date to the date of registration, the relevant date for tax purposes would be the date of registration of the document. But the question here was of the taxable event — similar to the raising of the MCGM demand — and not the amount of the tax. In the present case, it is undisputed that MCGM could raise the demand only after registration of the assignment deed. That is not in question before us. The only question is about the basis of computation of the demand, i.e., whether it should be based on property rates of 1988 or 2006. 13 1989 SCC OnLine Cal 473: (1991) 190 ITR 556: (1992) 103 CTR 343. 14 1999 SCC OnLine Mad 1139: 2000 158 CTR 5: 2000 108 Taxman 426.

59. Notably, in the impugned demand notices, support is sought to be drawn only from the 5th February 2015 order in Writ Petition No 1251 of 2014. As we have seen, that reference is demonstrably incorrect. There is no such High Court direction to use the registration date as the date for computing the demand. That was only a submission made before the Division Bench and so noted in paragraph 13, quoted above. There is no other basis to the impugned demand.

60. We are unable to see how in the context of Section 92(dddd) there could ever have been a case of regarding the date of 27th October 2006 as the effective date. There are far too many inconsistencies with this. To begin with, it is obviously a complete rethink or a latter day epiphany and it comes only after the MCGM had raised the demand of Rs 24,71,300/- taking, quite correctly, the date of 8th April 1988 and the Ready Reckoner of rates of that year, accepting payment and issuing a receipt and, in fact, ordering that the transfer be permitted. There is no attempt to explain other than invoking the High Court order of 5th February 2015 — and which was and is incorrect. We do not believe this is a correct approach in public administration. Between the time of the demand for Rs 24,71,300/- and the first impugned demand of 13th January 2022, there was absolutely no change in law. There was no change in facts. There may have been on MCGM’s part a change of mind (or a change of advocates), but that is about all. This is no ground to revisit a decision that was, frankly, closed and concluded on 9th June 2021. We see no principle of law by which a public authority can constantly reopen concluded matters like this and subject them to endless revisions.

61. Even otherwise, given that the Assignment Deed is undoubtedly of 8th April 1988, nothing in the MCGM Affidavit in Reply explains the status of the property itself between 1988 and

2006. This is an inconsistency that is never explained, as we have noted above. Section 92(dddd) came into effect from 2012. What the MCGM seems to have done is taken a call that since the 2006 Ready Reckoner rates were so much higher in 2006 than in 1988, it was more beneficial to use the later rates than to go back to the earlier date of 1988. Public administration is not to be managed with constantly shifting goal posts. Persons who are required to obtain permissions have an entitlement and a right to certainty and to closure in such matters.

62. On a pure question of interpretation of Section 47, we are unable to agree with Mr Kumbhakoni that whether it is viewed from the perspective of tax, or it is viewed from the MCGM being a socalled outsider, the effective date must be 27th March 2006 and not 8th April 1988.

63. Accordingly, the Petition succeeds. Rule is made absolute in terms of prayer (a). In the facts and circumstances of the case, there will be no order as to costs. (Kamal Khata, J) (G. S. Patel, J)