IMPORTANT POINT
The main legal point established is the principle of statutory vesting under the Companies Act, 2013, and the authority of the court to direct the Sub Registrar to recognize the statutory vesting by making necessary entry in Book No.1.

JUDGMENT :

The petitioner is a Limited Company, which was formed by converting a partnership firm by name Tali Traders in terms of Section 366 of the Companies Act, 2013. The said firm was the owner of the subject property under and by virtue of Ext.P2 document. Upon incorporation of the Company, all the assets of the partnership firm, including the subject immovable property, stood vested with the newly incorporated Company, statutorily, by operation of Section 368 of Companies Act, 2013.

2. Taking stock of such statutory vesting, mutation has already been effected in the name of the petitioner company and petitioner is accordingly the absolute owner in possession of the subject property. However, when the petitioner seeks financial facilities from banks, the entry in the Encumbrance Certificate stands in between. As per the Encumbrance Certificate, the subject property is in the name of the firm, which will be changed only pursuant to a corresponding entry to be made in Book No.1 in terms of the Registration Act and Rules. Petitioner seeks a direction to the 3rd respondent/Sub Registrar to make necessary entry in Book No.1 maintained under the Registration Act, as regards the vesting of the subject property in the name of the petitioner company.

3. Heard the learned counsel for the petitioner and the learned Government Pleader.

4. Learned counsel for the petitioner invited the attention of this Court to Sections 366 and 368 of the Companies Act, 2013 and contends that all the property, both movable and immovable, which belonged to the partnership firm had vested with the petitioner company by operation of Section 368 of the Companies Act. According to the learned counsel, Section 89 gives adequate guidelines as regards the entries to be made in Book No.1 and refusal by the 3rd respondent/Sub Registrar to effect an entry, recording the vesting of the subject property in the petitioner company, is grossly illegal, besides visiting the petitioner company with serious consequences, especially in the matter of availing credit facilities from banks.

5. Learned Government Pleader would submit that Rule 16 to the Registration Rules (Kerala) specifies the nature of the entries to be made in Book No.1. Sans those that are specifically referred to in Rule 16, no other entry could be made in Book No.1, is the submission made. Learned Government Pleader would, however, submit that the factum of statutory vesting in terms of the Companies Act, thereby recognising the petitioner company as the owner of the subject property, is not being disputed by the official respondents, especially when mutation has already been effected in favour of the petitioner company.

6. This Court is of the opinion that the issue can be resolved by referring Section 89(5) of the Registration Act:

“89. Copies of certain orders, certificates and instruments to be sent to registering officers and filed.

(1) xxx

(2) xxx

(3) xxx

(4) xxx

(5) Every Court passing-

(a) any decree or order creating, declaring,

(a) any decree or order creating, declaring, transferring, limiting or extinguishing any right, title or interest to or in immovable property in favour of or of any person, or

(b) an order for the attachment of immovable property or for the release of any immovable property from attachment,

shall send a copy of such decree or order together with a memorandum describing the property, as far as may be practicable in the manner required by Section 21, to the Registering Officer within the local limits of whose jurisdiction the whole or any part of the immovable property comprised in such decree or order is situate, and such officer shall file the copy and memorandum in his Book No.1.”

Section 89(5)(a) specifically speaks of the requirement of sending, for the purpose of filing, orders passed by all courts -which creates, declares, transfers, limits or extinguishes any right, title or interest to or in immovable property -in favour of any person, so as to make an entry in the Book No.1