Dear Hemant,
Our minds have been deeply prejudiced about the officialdom that we refuse to believe even when certain real truth is told by the well intentioned officials!
Whoever advised you that it is legal that your sister can relinquish her shares/interests (which she does not in fact at present) is patently and horribly wrong.
Please believe, whatever the registry official told you was 100% correct - it is not due to any Vit. M factor at all!
I will logically and legally explain to you the correct position.
To my understanding your father and your uncle might have inherited your grandpa's property after the death of your grandpa. In that case, the property is the individual and separate property of your father and your uncle. This is the position with the enactment of Hindu Succession Act, 1956.
Thus, just because the property belonged to your grandpa does not mean that you or your sister have any hare or interest in it.
Now that your father and uncle are alive, and since the property is in their name and their separate property, they have every legal right to dispose it of in the manner in which they like. They can legally dispose of the property during their life time by selling to some one or gifting to some one - without giving any share whatsoever to either you or your sister? If they so dispose of the property, what is that your sister can relinquish?
So when the persons to whom the property absolutely belongs are alive, neither you nor your sister not even your mother have any right over such property.
That is why, the sub-registrar's office is quite right in refusing to register the relinquishment by your sister of her non-existent right/share/interest in any property much less the property which legally belongs to your father and uncle.
I think, I have made myself clear.
At best, if your father so desires, and your sister also agrees, your father can write a will in your favour giving his entire property to you, without giving any share to your sister (this will ensure that your sister need not give any relinquishment deed later on). Try to obtain the signature of your sister as a Witness to the Will. This will also ensure that she does not change her mind later on.
So, my humble request is, do not jump to conclusions and try to attribute motives to any officials, without first knowing the true position and complete details and the situations.