Property mutation is not proof of ownership
Mutation in the records of municipal or revenue authorities ascertains who is liable for tax payment
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.