Notaries and Issues with their functioning

Context: Department Related Parliamentary Standing Committee on Personnel, Public Grievances, Law & Justice recently released a report on the 'Functioning of Notaries'.

About Notaries

• Notary (also called Public Notary) is a public official whose chief function is to authenticate contracts, deeds and other documents by an appropriate certificate with a notarial seal.
• The profession of notaries in India is presently regulated by the Notaries Act, 1952 (Passed by Parliament) and Notaries Rules, 1956.
• Notaries Act is a Central Legislation but the subject 'Legal Profession' falls in the Concurrent List of the VIIth Schedule of the Constitution of India. Hence, both Central and State Governments are administratively competent to appoint notaries.
• Appointment of Notaries: Under the Notaries Act, both the Central & State Governments have been vested with powers to appoint any legal practitioners or persons who possessing prescribed qualifications as notaries. Central Government can appoint notaries for the whole or any part of India while State Governments can appoint notaries for the whole or any part of the State. Currently, an interview based system is followed by Central/State Governments to appoint Notaries.
• Period of Practice: According to Notaries Act, Notaries are entitled to practice for 5 years, which may be renewed for 5 years. Thus, before the end every 5 year period, Notaries need to renew their certificate of practice as Notaries from their appointing authorities.
• Maximum number of notaries to be appointed by Central and State governments is specified in the Notaries Rules, 1956.
• Eligibility criteria for appointment as a Notary: Notary Rules, 1956 prescribes eligibility criteria for appointment as a Notary. They qualifications are as follows:
  • At least 10 years of practice as an Advocate, or
  • At least 7 years of practices as an Advocate for a person belonging to SC/ST/OBC/Woman, or,
  • A person who had been a member of the Indian Legal Service under the Central Government, or,
  • A person who had been at least for 10 years

(i) a member of Judicial Service, or

(ii) Held an office under the Central/State Government requiring special knowledge of law after enrollment as an advocate, or

(iii) Held an office in the department of Judge Advocate General (JAG) or the legal department of Armed Forces.

• Duties of Notaries: According to Notaries Act, following functions are performed by Notaries.
  • Verify, authenticate, certify or attest the execution of any instrument.
  • Present any promissory note, hundi or bill of exchange for acceptance or payment or demand better security.
  • Administer the oath to or take affidavit from any person.
  • Translate or verify the translation of any document from language to another.
  • Act as a Commissioner to record evidence in any civil or criminal trial if so directed by any court or authority.
  • Act as an arbitrator, mediator or conciliator, if so required.

Of the above functions, the bulk of work performed by notaries is related to verifying or authenticating the execution of an instrument and administering oaths or taking affidavits from any person.

• Fees to be charged by Notaries: Currently, fees to be charged by Notaries for Notarial act is prescribed by the Notaries Rules, 1956.

Issues with Profession of Notaries:

• Degradation of profession of notaries: Notaries have been known to issue false certificates leading to fraud and other legal issues. Notaries have been known to operate from public vehicles and taxis, thus lowering the dignity of Notarial profession, this happens as there is no designated spaces for notaries to sit.
• Low fees prescribed for Notaries: Currently, Notaries Rules, 1956 prescribes the fees to be charged by Notaries which is very meagre. This fees was last updated in 2014. Notaries do not receive any remuneration or pay from the government.
• Lack of transparency in appointment of Notaries: Present interview appointment system for notaries lacks transparency and objectivity and is ritualistic. There is no objective criterion for holding interviews for the selection of notaries. There have been allegations of corruption and misuse of transparency in the process.
• Low sanctioned strength of Notaries: Notaries Rules, 1956 prescribes the maximum number of notaries to be appointed by Central/State Governments and enhancement of this quota in line with population. However, the number of notaries is limited and unevenly distributed across the country, leading to difficulty is accessing notarial services, especially in rural and remote areas.
• Issues with qualifications of notaries: Current requirement of 10 years of practice as advocate for practice as eligibility for appointment as notary is very high. Also, there have been many instances where applicants having no experience of practicing in courts to be appointed as notary based on their years of enrolment as advocates.
• Issues in renewal of certificate of practice of Notaries: There are huge delays in the disposal of applications for renewals of certificates of practice. This leads to many Notaries sitting out of work leading to loss of their practice, income and reputation. There are also allegations of corruption and misuse of discretion in the renewal process.
• Lack of training of Notaries: Notaries in India are not adequately trained and supervised and there is no mechanism for ensuring their accountability and quality of service.
• Issues in notarising of documents: Notarial work is largely paper based and manual which increases the risk of fraud, forgery and tampering of documents. There is a lack of digitisation, standardisation and verification of notarial records and certificates.

Suggestions for Notaries

• Raising of fees charged by Notaries: There is a need to appropriately raise the fees charged by notaries which indexed to inflation. This will allow notaries to have a decent standard of living. This fees should be revised at regular intervals, every 5 years.
• Appointment of Notaries: The interview based appointment of notaries should be done away with and instead appointment of notaries should be based on an objective type written examination along the lines of All India Bar Examination (AIBE) conducted by Bar Council of India.
• Sanctioned Strength of Notaries: Sanctioned strength of notaries in a state should be determined based on a set of objective criteria like population, volume of litigation, economic and commercial activities in the state etc. and this should be reviewed regularly.
• Qualification of Appointment of Notaries: Eligibility for appointment as notaries should be reduced to 5 years from the current 10 years. This will attract young aspirant lawyers to this profession.
• Renewal of certificate of practice of Notaries: Renewal of certificate of practice of Notaries is done to know about the antecedents of the Notaries and to ensure that the applicant is alive and ensure that nobody else is practicing in their place. To ensure smooth practice of Notaries, the committee has recommended that renewal of certificate of practice every five years should be done away with. After their appointment, notaries should be allowed to practice till a particular age prescribed by the Government.
• Diversity in notaries' profession: Ideally, notaries profession should reflect the diversity of the state which will enrich the notarial profession and the legal system. Thus, adequate representation should be given to SCs, STs, OBCs, Women, Physically Challenged, Minorities etc.
• Training of Notaries: Notaries should be provided with regular trainings and guidance and their performance and conduct should be monitored and evaluated by an appropriate government/authority. Some ethical and professional standards should be laid out by such government/authority to which notaries should adhere to. Also, complaints or grievances against Notaries should be promptly addressed and resolved.
• Use of technology in appointment and notarial work: Government should make the Notary Portal of Department of Legal Affairs into a one-stop place for advertising vacancies of notaries, making applications, submitting fees, publishing results and downloading e-certificates of practice. Annual returns under Notaries Rules, 1956 should also be filled through this portal. Also, general public should be provided with state-wise list of public notaries, updated on a real-time basis, for verifying credentials of notaries. Services of this portal can be extended to States/UT also. Notaries should be equipped to handle electronic transactions, digital documents and online notarisation.
• Designated areas for sitting of notaries: Government should ensure designated areas for sitting of notaries in every court complex from where they can do their notarial work in a dignified manner.
• Change of notarial years for annual returns: The Notarial year should be changed from calendar year to financial year as this will help the notaries to synchronise their returns with that of Income Tax returns.
• Notarising of documents: Notarial work should be modernised and digitised and the use of electronic signatures, stamps and seals should be encouraged. Notarial records and certificates should be stored and maintained in a centralised online database, which can be accessed and verified by concerned authorities and parties. Governments should ensure that all public notaries maintain a digital register to keep records of documents notarised by them.