Has Karnataka Legislature passed a faulty legislation and set to create a new Telgi ?

The Government of Karnataka has recently passed an amendment to the Indian Registration Act 1908 through The Registration (Karnataka Amendment) Bill, 2015 which has been forwarded to the President of India for his assent.

The bill has been drafted in direct violation of Information Technology Act 2000 and it is strange that it has been drafted and passed by both the legislatures of Karnataka and forwarded to the President for his assent.

The President’s office has no option but to reject the Bill as it is constitutionally invalid. 

The objective of the Bill is stated to be “to amend the Registration Act 1908 (Central Act 16 of 1908) in its application to the State of Karnataka to provide for online Registration of Agreement for Sale, Lease Deed and Leave and License Agreements and for online filing of true copies of Court orders, Decrees and Mortgages by way of Deposit of Title Deeds etc., sent by Banks and other Financial Institutions..”

It may be recalled that section 1(4) of Information Technology Act 2000 (ITA 2000) provides the details of documents that are outside the scope of Information Technology Act 2000. (Now available in First Schedule  after the amendment in 2008 ).

Section 1(4) of ITA 2000 as amended in 2008 (ITA 2008) states as follows:

Nothing in this Act shall apply to documents or transactions specified in the First Schedule by way of addition or deletion of entries thereto.

This “Nothing in this act applies” include sections 4 of ITA 2000 which provides legal recognition for electronic documents as equivalent to paper documents, Section 5 of ITA 2000 which provides legal recognition of electronic/digital signatures to physical signatures, as well as other sections of the Act including Sections 6,6A,7, 7A,8 and 9 which directly apply to e-Governance transactions.

The following are the documents which are indicated in the First Schedule which are outside the purview of ITA 2000/8 by virtue of this section.

Documents or Transactions To Which the Act Shall Not Apply

1 A Negotiable Instrument (Other than a cheque) as defined in Section 13 of the Negotiable Instruments Act 1881 (26 of 1881)
2 A Power of Attorney as defined in section 1A of the Power of Attorney Act 1882 (7 of 1882)
3 A trust as defined in section 3 of the Indian Trusts Act, 1882 (2 of 1882)
4 A will as defined in clause (h) of section 2 of the Indian Succession Act, 1925 (39 of 1925) including any terstamentary deposition whatever name called
5 Any contract for the sale or conveyance of immovable property or any interest in such property

As one can see, “Any contract for the sale or conveyance of immovable property or any interest in such property” is outside the scope of this Act and if such documents are rendered in Electronic form, they are not recognized in law.

Hence the proposed amendments is bad in law ab initio.

The amendment proposes that under Section 32, (of Indian Registration Act), documents (including compulsorily registerable documents) can be presented “by electronic means” either by a person who is executing the document or claiming under the same. There is no mention of electronic or digital signature any where in the Bill.

If such documents are to be presented as electronic documents, then they may include documents that fall into the category 5 mentioned in First Schedule of ITA 2008.

If any body other than the executant has to present the documents then a Power of Attorney is required which also may be outside the Act as per item 2 on the list of excluded documents.

The legislation proposed is therefore impossible to be passed under the current law and if by inadvertence it is given assent by the President, then a situation will be created similar to what Karnataka faced during the Telgi fake Stamp usage time when a number of documents were  registered though no stamp duty was paid to the Government coffers making them void in law.

It is regrettable that the persons responsible for the drafting of the Bill and pushing it through the legislatures have demonstrated a total ignorance of the provisions of  Information Technology Act 2000 and there is a need for the Government to fix responsibility on the officials responsible for the faux pas.

We urge the State Government to apologise to the honourable President of India and  immediately withdraw the Bill.

We also request the office of the President, as well as the Ministry of Law and Justice to take note of the impending disaster and advise the President immediately not to provide assent in the normal course.


P.S: Copy of the amendment bill

About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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