Is it true that mere fact of registration does not mean that he document is legally valid ?
Yes, Registration is one of the several formalities in completing a transaction and while registering, a Sub-Registrar is not expected to concern himself with the legal validity of the transaction but has to restrict himself to verifying prescribed formal aspects only under the Registration Act, 1908, like stamp duty, identification of parties, description of property and similar. It is for the parties to ascertain in advance through a Lawyer or otherwise, the legality of the transaction before drawing up a document.
