Official guidance, Tamil Nadu land law
Circular No. 57027/C1/2017, Statutory Vesting Rights of the Official Assignee
The Office of the Inspector General of Registration, Chennai, issued Circular No. 57027/C1/2017 dated 26 April 2018 on properties of persons declared insolvent. It directs registering officers to record adjudication communications from the Official Assignee of the High Court of Madras or the relevant Official Receiver, prevent further encumbrances on vested properties, and provide requested Encumbrance Certificates to those officials free of cost.
What the circular governs
Circular No. 57027/C1/2017 dated 26 April 2018 deals with property that vests in the Official Assignee of the High Court of Madras or an Official Receiver following an insolvency adjudication. The Office of the Inspector General of Registration, Chennai, issued the circular after orders of the High Court of Madras in applications numbered 47 to 50 and 52 of 2018 in I.P. No. 8 of 2016, dated 5 March 2018.
The High Court directed registration authorities to treat communications about insolvency adjudication orders seriously and to avoid registering documents concerning affected properties after adjudication.
Duties of registration officers
Circular No. 57027/C1/2017 instructs all registering officers to:
- File letters or communications received from the Official Assignee concerning adjudication orders under the Presidency Towns Insolvency Act 1909.
- Apply the same procedure to adjudication orders brought to their notice by an Official Receiver under orders of District Courts or concerned Sub Courts under the Provincial Insolvency Act 1920.
- Place these communications in the memo volume maintained by the Sub Registrar's Office.
- Give each communication an L number as prescribed in S.O. 194 and index it under section 89(7) of the Registration Act, 1908.
- Ensure that property vested in the Official Assignee or Official Receiver is not further encumbered.
- Issue Encumbrance Certificates requested by the Official Assignee or an Official Receiver free of cost.
Who may be affected
Circular No. 57027/C1/2017 may affect an insolvent property owner, the owner's agent, a buyer, lender or professional dealing with property covered by an adjudication order. Once the adjudication is notified, the registration authorities are expected to note it and prevent registration or further encumbrance of the vested property.
A person considering a transaction involving an insolvent owner's property should therefore be aware that the Sub Registrar's records may contain an indexed communication from the Official Assignee or Official Receiver. The circular requires compliance by Sub Registrars, District Registrars, Deputy Inspectors General of Registration and other registering officers across the State.
This summary is generated from the source document to help you find what is relevant. The PDF above is authoritative. For advice on your own property, use LandLens One or speak to a qualified professional.
Common questions
Can an insolvent owner sell or otherwise encumber the property after an adjudication order?
The circular requires registration authorities to prevent further encumbrance of property vested in the Official Assignee or Official Receiver. The High Court's direction also calls for refusal of documents executed by insolvents or their agents after adjudication by the competent court.
How will a Sub Registrar record an insolvency adjudication affecting property?
The communication from the Official Assignee or Official Receiver must be filed in the Sub Registrar's memo volume, given an L number as prescribed in S.O. 194, and properly indexed under section 89(7) of the Registration Act, 1908.
Are Encumbrance Certificates free for every property buyer under this circular?
No. The circular provides free Encumbrance Certificates when they are requested by the Official Assignee or an Official Receiver.
Does the circular apply only to insolvency matters before the High Court of Madras?
No. It also covers adjudication orders brought to registration authorities by Official Receivers under orders of District Courts or concerned Sub Courts under the Provincial Insolvency Act 1920.
