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25 Jul 2019

Guaranteed Land Title-Legal Perspective

We often hear that various Government’s both at the central and state level are trying to achieve Ease of Doing Business (“EoDB”) and Ease of Living (“EoLiving”). However, in terms of land, both EoDB and EoLiving is still a distant dream. It must be noted that EoDB, with respect to land, has been adversely affected due to the existence of corrupt practices in land transactions, the existence of multiple litigations and lack of credibility of land records. Similarly, in order to achieve EoLiving, the concerns of the farmers and small landholders with respect to litigations, encroachments, etc., must be efficiently addressed. It is imperative that the aforementioned concerns are sufficiently addressed by the Government (both at the Centre and the States) through its initiatives which increases the confidence of the businessmen, investors, and people of India, in general, on the credibility of land titles.

In it undeniable that in achieving EoDB and EoLiving, ‘Dispute Free Titles’ backed by the Government almost amounting to ‘Guaranteed Land Title’ would play an integral part. This in-turn envisages  ‘Computerised Land Records’, ‘Computerised Registration Database’ detailed with ‘Digital Cadastral Maps’ and ‘Aadhar Authentication Service’ along with land transactions hashed through new age technology like ‘Blockchain” (Collectively referred to as ‘Computerized / Blockchained Land System’) thereby making such transactions and related information immutable and highly trustworthy. However, while the technology exists, the enabling legal structure is a distant reality, as the Indian land laws largely continue to be a legacy from the British era and have their own unique features. The Indian Land laws are complex as they seek to address not only the correctness and completeness of title but also focus on the issues related to possession and revenue collection from land. This article seeks to give a very high level of legal insight into how India can move towards Guaranteed Land Title with an enabling legal framework.

Maintenance of authentic land records is key to the effective management of land. Land records in India, in general, is poorly maintained, which leads to ambiguity with respect to the ownership of land and results in an increasing number of litigations. This has also adversely affected the confidence of the investors (both domestic and international) with respect to investing in land and related products, which is quite a setback for our economy because land is a non-depreciating asset which more often than not assures returns on investment.

In the absence of existence of credible land records, implementation of technology will be of little meaning as wrong information fed into the system will only create more issues and confusion among the various stakeholders, including but not limited to landowners, land purchasers, legal heirs of deceased landowners, etc. In fact, in the light of the above, in order to achieve ‘Dispute Free Titles,’ it must be ensured that the land records are perfect, up-to-date, final, comprehensive and binding and are completely foolproof with respect to the title of landowners on the concerned land. In the absence of such an exercise, any implementation of technology will end up being mere digitization of land records and ‘Dispute Free Titles’ will remain a distant dream.

In fact, in the absence of a comprehensive legal understanding of land transactions among the people as to what constitutes a valid title, mere digitalization of land records may further complicate matters. For instance, let us take the example of the over-reliance on registered title documents for validating the title of the landowner. It has been reiterated in many judgements that, mere registration does not confer title to the owner [Suraj Lamp & Industries Pvt. Ltd. Vs. State of Haryana and Anr. (2012) 1 SCC 656], and in order to ensure clear title on land, the relevant revenue records pertaining to the land such as Khata/Patta/Pahani/RoR etc. needs to duly reflect the name of the owner of the land, as well. Further, another contributing factor is that the registrar, at the time of registration of the title document, is not mandated to confirm the title of the property, therefore, in such a case, the registered document may itself be incorrect in terms of the vendor’s ability to pass on valid legal title due to its own defective title. This gives rise to multiple litigations thus making land a considerably risky asset without Guaranteed Land Title.

Therefore, in the light of the above, in order for the Government to achieve ‘Guaranteed Land Title’ the Government must undertake targeted interventions in existing land and revenue laws (“Targeted Interventions”) which will ensure that the Computerised / Blockchained Land Records in the ‘Computerized / Blockchained Land System’ are final, binding and ensures Guaranteed Land Titles.

Targeted Interventions:

On a recent visit to Switzerland on a study tour organized by Swissnex enabled by Mr. Sebastien Hug, where we studied the strides made by Switzerland in respect of blockchain technology both from an entrepreneurial and legal standpoint, a very interesting perspective came to the fore. The Swiss Government adopted a bottom-up approach to listen to the legal needs of the entrepreneurial eco-system and then instead of re-inventing the wheel (which possibly takes eons or never happens due to various political issues) seeks to undertake focused changes in existing laws i.e. “Targeted Interventions” which involves amending the existing laws and procedures, in the current scenarios concerning land in a State in order to achieve Guaranteed Land Title. Targeted Interventions must be made in such laws, rules, regulations, policies and procedures of a State which governs the transfer of title of land from one person to another, both in terms of registration of title documents governing the transfer of title and mutation of the name of the new owner in the concerned land records.

For instance, in case of private land, title can be transferred from one person to the other through sale, inheritance, partition, settlement, gift (oral / written), mortgage, etc., however, it is to be noted that while most transfers are compulsorily registrable, ownership through certain mechanisms like inheritance  is not registered under the Registration Act, 1908. It is also observed that many owners of land do not, in fact, mutate their names in the land records or carry out such steps to register encumbrances on the land records, however that does not extinguish their rights in the lands and they continue to have a legal right,  without visibility to interested third parties. Therefore, Targeted Interventions must be carried out in the Registration Act, 1908 to ensure that all title documents not mandatorily registrable are now mandatorily registered. Further, such registration of the title documents must be integrated with the ‘Computerized / Blockchained systems’ in such a manner that, immediately upon registration of the title document, other departments holding the same record are intimated about the transfer of title of the concerned land from the transferor to the transferee and the name and details of the transferee gets automatically updated in the actual land records of the concerned land.

Further, Targeted Interventions must be made in the process of registration of title documents, to include authentication of the identity of the transferor and the transferee through Aadhar verification. This will ensure that the correct name and identity of the owner of the land is reflected in the land records of the ‘Computerized / Blockchained database’. Further, Targeted Interventions must be made in the process of recording ownership or transfer of ownership of land to ensure that the identification process is robust in terms of recording the name and identity of the persons involved and such that no other person other than the owner of the land can transfer the land in favour of another person. Further, if any person tries to register a title document concerning a land of which he is not the owner as per the revenue records, then the registration of such title document should be rejected by the ‘Computerized / Blockchained Land System ’ at that very instant.

Another manner in which persons acquire the title of a land is through litigations arising out of possession of land / property, such as right of adverse possession, etc., by virtue of which the title of the land may be transferred in the name of the person claiming adverse possession, if such a person manages to secure a favorable verdict in the concerned litigation. Therefore, Targeted Interventions must be undertaken to record such rights arising out of possession of a land / property, from time to time, and all information collated pertaining to such rights must be integrated with the ‘Computerized / Blockchained Land System’. Information relating to ongoing as well as concluded litigations must be recorded and integrated in a manner that will ensure that the ‘Computerized / BLockchained Land System’ is, at all times, updated of existence of litigation on any piece of land, and such information will show up at the time of registration of title documents or any verification carried out on the title of the land. Further, if a court of competent jurisdiction, in any matter, grants the ownership of land in favour of any person other than the original owner, as a part of its decision, then the ‘Computerized / Blockchained Land System’ must be updated to include the name of the new owner. Additionally, the introduction of guaranteed and clean government backed land title through a comprehensive ‘Computerized / Blockchained Land System’, will address issues like litigation, encroachment, etc., both on private and public lands.

Also, there must be amendments made in the Indian Evidence Act, 1872, in order to give sanctity to the information processed, maintained and made available in the ‘Computerized / Blockchained Land System’ in a court of law, such that the information in the ‘Computerized / Blockchianed Land System’ can be used as evidence in a court of law and is perceived as final and binding by the public at large. This will discourage the public from filing frivolous litigations and /or appeals and will reduce the overall time taken for disposal of litigations by the courts.

The aforementioned instances of Targeted Interventions are only a part, and not the complete process of ensuring Guaranteed Land Title. In order to achieve Guaranteed Land Title, ‘Computerized / Blockchained Land System’ must further involve Targeted Interventions in other processes as well, such as mortgages, etc.

Conclusion:

An overhaul of the existing apparatus for the maintenance of land records in a comprehensive manner, by ensuring Guaranteed Land Title, shall instill confidence among the people with respect to the certainty of ownership of land. This will result in increase in the overall investment in the real estate sector in India and emergence of new products based on land title, e.g. Title Insurance, etc., which will increase the ability of the small income groups to benefit heavily from monetizing the asset of land through better and regulated products in the insurance market. Hence, this will be doing away with middlemen and/or ineffective loan schemes, etc.


Image Credits: Nandhu Kumar

https://unsplash.com/photos/03JtNfCubFw

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