In the past, various courts across the country have held transfers of property to be invalid on the premise that documents affecting such a transfer were not registered.
It is clearly stated in Section 17 of the Indian Registration Act that the instruments purporting to transfer or assign any interest in immovable property should be registered.
That means documents like sales deeds or gift deeds, which relate to immovable property, must be mandatorily registered, failing which the transfer would be invalid and not recognised by law.
Transfer of immovable property through a general power of attorney would also be invalid.
The Supreme Court judgement clearly established the rule that a transfer would be valid only through a registered deed of conveyance.
Also, if transfer of property is involved in a Will then it must be registered as required by the Indian Registration Act to be considered a valid will.
(Source: Supreme Court case https://indiankanoon.org/doc/141466740/ )
Registration also means that records are available to you to find out about the person who has the title and right to the property, and whether there is an existing liability or ongoing litigation, before you decide to buy it.
Since the documents are in the public domain, it helps prevent forgeries and fraud in transactions, especially the evasion of income tax or stamp duty.
Cost of registering a document is not very high. Although it differs from state to state, on an average, it would cost Rs 1,000-2,000 to register a document, excluding the stamp duty charges, if applicable.
As per the Indian Registration Act, all documents are not required to be registered. Mandatory and Optional registration has been clearly distinguished.
According to Section 18 of the Act, the documents that relate to the transfer of movable property, as well as wills, are not required to be registered.
A power of attorney with respect to movable property need not be registered.
Even here the law experts advise that it is better to register the documents as it lends more sanctity to the document.