WHEN STATES EX­PLOIT BUY­ERS’ VUL­NER­A­BIL­ITY

Hindustan Times (Chandigarh) - Estates - - PROPERTY & TO-LET - Jee­van Prakash Sharma jee­van.sharma@hin­dus­tan­times.com

When a home­buyer pays a cer­tain per­cent­age of the cost of his apart­ment as stamp duty and gets his flat/land reg­is­tered with the rev­enue depart­ment of the state govern­ment, he be­lieves his property has got all le­gal/req­ui­site ap­provals. This is the mis­con­cep­tion that the res­i­dents of 106 flats in the Campa Cola so­ci­ety in Mum­bai had har­boured when they got sale deeds ex­e­cuted in their favour from the builder dur­ing the late ’80s by pay­ing stamp duty of ` 1 lakh to ` 4 lakh each to the state rev­enue depart­ment. To­day they stand to lose ev­ery­thing as the Supreme Court has or­dered the de­mo­li­tion of their flats as these were built in vi­o­la­tion of sanc­tioned plans.

This case, af­ter the SC de­clined to reg­u­larise the apart­ments, might be headed for clo­sure, but the apart­ment own­ers are rais­ing per­ti­nent ques­tions. Why did the sale deeds, ex­e­cuted in their favour by the builder, not help their cause in es­tab­lish­ing their ti­tle over the prop­er­ties, es­pe­cially when the govern­ment earned a hefty rev­enue from stamp duty?

“Vin­odb­hai Kothari, who died on Sun­day (June 14, 2014), was the first per­son to get his apart­ment reg­is­tered in 1985 by pay­ing ` 1.5 lakh as stamp duty and reg­is­tra­tion fee to the rev­enue depart­ment of the state govern­ment. Since then, he and his fam­ily have been reg­u­larly pay­ing property taxes which were re­vised and raised from time to time by the govern­ment. Had the rev­enue depart­ment re­fused to reg­is­ter the sale deed in favour of Kothari way back in 1985, hold­ing that the flat was il­le­gal, more than 800 res­i­dents would not have fallen prey to the greed of the de­vel­oper,” says Vidya Srini­vas, a home­buyer in the Campa Cola so­ci­ety.

“Now if the flats are il­le­gal, so are the rev­enues of the govern­ment. Can the govern­ment re­turn the money with in­ter­est that it has charged from us in form of stamp duty and property tax?” asks Srini­vas.

In In­dia, it’s com­pul­sory to get sale of land/apart­ment reg­is­tered with the rev­enue de­part­ments of states. How­ever, the In­dian Reg­is­tra­tion Act of 1908 doesn’t re­quire the reg­is­tra­tion author­ity to ver­ify his­tory of the land/apart­ment or own­er­ship from the seller. One should also know that the land/apart­ment reg­is­tra­tion is not reg­is­tra­tion of ti­tle, but a deed of trans­ac­tion. All these le­gal pro­vi­sions make the home­buy­ers vul­ner­a­ble to a property fraud.

“Reg­is­tra­tion of prop­er­ties is a fis­cal in­stru­ment which helps the state earn rev­enues. How­ever, it doesn’t pro­vide any le­gal sup­port of cer­tainty to ti­tle. If the Reg­is­tra­tion Act of 1908 is amended and a manda­tory pro­vi­sion is added for the reg­is­tra­tion author­ity to ver­ify his­tory of the land/apart­ment, the reg­is­tra­tion of il­le­gal property will stop,” says a rev­enue of­fi­cial, re­quest­ing anonymity.

Le­gal and ur­ban ex­perts say that in In­dia land own­er­ship is “pre­sumed,” which is ques­tion­able and can be chal­lenged on mul­ti­ple fronts: own­er­ship, ex­tent of bound­aries, fi­nan­cial en­cum­brances, etc.

“In Delhi, the rev­enue depart­ment has is­sued sev­eral ad­min­is­tra­tive or­ders to the sub-regis­trars, di­rect­ing them not to reg­is­ter prop­er­ties in unau­tho­rised colonies. Sub­reg­is­trars com­ply with the or­ders as not do­ing so in­vites ac­tion against them. How­ever, the Reg­is­tra­tion Act, which is a Cen­tral act, al­lows a sub-reg­is­trar to reg­is­ter any property with­out ver­i­fy­ing its his­tory. Those who have been pe­nalised for do­ing so have had their sus­pen­sions re­voked from the court as the ex­ist­ing law favours them,” says a for­mer in­spec­tor gen­eral (rev­enue) from the Delhi govern­ment on con­di­tions of anonymity.

Apart from amend­ments in the Reg­is­tra­tion Act, there’s need for a sys­tem that pro­vides for in­di­vid­ual rights and the abil­ity to trans­fer these rights. In such a sce­nario, what is needed is a guar­an­teed ti­tle cer­ti­fi­ca­tion sys­tem that pro­tects rights to land and property.

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