The government of Karnataka issued a notification on 18 July, 2023 introducing a Bill to further amend the Registration Act, 1908. The proposed amendment seeks to introduce new sections, addressing forged documents, prohibited transactions, and the need for a robust cancellation process when necessary.
The amendment introduces a new section, which empowers the registering officer to refuse the registration of documents falling under specific categories:
- Forged documents, as defined under the Indian Penal Code, will not be eligible for registration.
- Documents related to transactions that are prohibited by either Central or State Acts will be rejected for registration.
- Document relating to transfer of immovable property by way of sale, gift, lease or otherwise, which is attached permanently or provisionally by a competent authority under any Central Act or State Act for the time being in force or any Court or Tribunal
- Any other document as the State Government may, by notification, specify.
To rectify any discrepancies, the amendment introduced new sections, enabling the District Registrar to cancel registered documents that violate the guidelines laid down in the above section. The District Registrar will serve a notice to all involved parties, providing them with an opportunity to explain why the document should not be cancelled. On consideration of reply, if any received therefor, the District Registrar may cancel the registration of the document and cause to enter such cancellation in the relevant books and indexes. In case of disagreement with the cancellation decision, parties can file an appeal with the Inspector General of Registration within thirty days from the date of cancellation of the document and the Inspector General of Registration shall pass an order confirming, modifying or cancelling the order of the District Registrar.
To deter malpractices and ensure adherence to the law, the amendment introduces penalties for registering officers who knowingly register forged documents and other documents prohibited by law. Such individuals and anyone employed under them may face imprisonment for up to three years, fines, or both. However, it’s essential to note that no penalty shall apply in cases where the registration was done in good faith.
Furthermore, the amendment extends liability to companies for offenses committed under the Act. Persons in charge of conducting business on behalf of the company, along with the company itself, will be deemed guilty and held accountable for any violation.
However, if they can prove the offense occurred without their knowledge or that they exercised due diligence to prevent it, they may be exempt from punishment. Also, it holds individual directors, managers, secretaries, or other officers of a company responsible for any offense committed by the company under the Act, if it can be proven that they were involved in the offense either through consent, connivance, or neglect.
