Prop­erty mu­ta­tion is not proof of own­er­ship

Mu­ta­tion in the records of mu­nic­i­pal or rev­enue au­thor­i­ties as­cer­tains who is li­able for tax pay­ment

HT Estates - - NEWS - Su­nil Tyagi

For in­di­vid­u­als who have re­cently ac­quired or in­her­ited an im­mov­able prop­erty, ap­ply­ing for mu­ta­tion of prop­erty is an im­por­tant pro­ce­dural re­quire­ment. Such mu­ta­tion takes place at the lo­cal mu­nic­i­pal au­thor­ity’s of­fice, un­der whose ju­ris­dic­tion the ac­quired/in­her­ited prop­erty is lo­cated. Mu­ta­tion of prop­erty with the lo­cal mu­nic­i­pal au­thor­ity es­sen­tially refers to the record­ing of a trans­fer or de­vo­lu­tion of ti­tle of a prop­erty for the pur­pose of pay­ment of mu­nic­i­pal taxes. The ap­pli­ca­tion pro­ce­dure and fees payable vary across states.

For in­stance, in Delhi, both Mu­nic­i­pal Cor­po­ra­tion of Delhi (MCD) and New Delhi Mu­nic­i­pal Cor­po­ra­tion (NDMC) un­der­take mu­ta­tion of prop­erty records for the pur­pose of pay­ment of prop­erty taxes of prop­er­ties within their ju­ris­dic­tion.

As per the Delhi Mu­nic­i­pal Cor­po­ra­tion Act, 1957, when the ti­tle of a prop­erty — the owner of which is pri­mar­ily li­able for the pay­ment of prop­erty taxes — is trans­ferred, the trans­feror and the trans­feree are re­quired to give no­tice of such trans­fer in writ­ing to the com­mis­sioner within three months from the ex­e­cu­tion/reg­is­tra­tion of the in­stru­ment.

In the event of death of any per­son pri­mar­ily li­able for the pay­ment of prop­erty taxes, the per­son on whom the ti­tle of the de­ceased de­volves is re­quired to no­tify the com­mis­sioner within six months from the date of death of the de­ceased.

From the per­spec­tive of an in­di­vid­ual who is plan­ning to pur­chase an im­mov­able prop­erty, check­ing mu­nic­i­pal records is an im­por­tant part of the due dili­gence process. This helps in ver­i­fy­ing whether full and timely pay­ment of prop­erty taxes has been made. How­ever, many buy­ers er­ro­neously be­lieve that check­ing mu­ta­tion of prop­erty records of the mu­nic­i­pal au­thor­ity is con­clu­sive proof of ti­tle of own­er­ship of the seller.

Nu­mer­ous judg­ments by the apex court have set­tled the law on the is­sue whether mu­ta­tion en­tries in the records of mu­nic­i­pal/rev­enue au­thor­i­ties are valid proof of le­gal ti­tle of own­er­ship. In the case of Sawarni vs In­der Kaur and Oth­ers (1996), the Supreme Court held that mu­ta­tion en­tries in the rev­enue records nei­ther cre­ate nor ex­tin­guish ti­tle of own­er­ship in a par­tic­u­lar im­mov­able prop­erty. It does not raise any pre­sump­tion of ti­tle of own­er­ship. More re­cently, in the Su­raj Bhan and Oth­ers vs Fi­nan­cial Com­mis­sioner and Oth­ers (2007) case, the Supreme Court ob­served that an en­try in rev­enue records does not con­fer ti­tle on a per­son whose name ap­pears in record of rights.

Fur­ther, the court held that it is set­tled law that en­try in the rev­enue records or Jam­a­bandi serves only a ‘fis­cal pur­pose,’ ie for the pay­ment of land rev­enue. How­ever, no ti­tle of own­er­ship in the agri­cul­tural prop­erty is con­ferred on the ba­sis of such en­tries on a per­son whose name ap­pears in the records. Own­ing of agri­cul­tural prop­erty and get­ting the name en­tered in the rev­enue record are two dif­fer­ent and dis­tinct things.

Thus, one must keep in mind that mu­ta­tion of a prop­erty in the records of mu­nic­i­pal/rev­enue au­thor­ity, does not by it­self con­fer ti­tle of own­er­ship in a prop­erty. In other words, such mu­ta­tion by it­self does not amount to cre­ation or recog­ni­tion of ti­tle of own­er­ship in the prop- erty. The pri­mary pur­pose of mu­ta­tion in the records of mu­nic­i­pal/rev­enue au­thor­i­ties is to up­date prop­erty records for as­cer­tain­ing the per­son pri­mar­ily li­able for pay­ment of land rev­enue/mu­nic­i­pal taxes. The ti­tle of the seller will have to be as­cer­tained by a thor­ough in­spec­tion of chain of ti­tle doc­u­ments of the prop­erty.

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