LG-Delhi govt tussle hits investors
Land buyers are caught in the tug-of-war between the Delhi government and the lieutenant governor over circle rates of agricultureure land disadvantages of high circle rates
Dozens of investors who bought agriculture land four t o f i ve m o n t h s ago from farmers in the land pooling zones of north, northwest and southwest Delhi have been unable to get the titles of their land because the sub-registrars concerned have impounded sale deeds in which the land rate declared is less than the rate fixed by the Delhi government on August 4, 2015.
Ramesh Singh (name changed) had bought seven acres in Delhi’s northwest zone where the circle rate was ₹ 3 crore per acre at the actual market rate of ₹ 1.5 crore per acre. “I got the land registered at ₹ 1.5 crore but the sub-registrar impounded my documents after registration and sent them to the collector of stamps or the sub divisional magistrate (SDM) of that area. A number of months have gone by, but he has yet to clear the documents,” says Singh.
According to revenue department sources, the collector of stamps, who is the designated authority to clear these impounded documents, has been unable to deal with the papers because of differences between the Delhi government and the lieutenant governor (LG) on fixing land rates of agricultural land in the land pooling zones of Delhi. The notification related to hike in circle rates of agricultural land is under judicial scrutiny in the Delhi High Court.
“Recently onee ofof thethe sub-subregistrars from thehe northwestnorthwest district of Delhii sentsent 4040 salesale deeds of agricultureture landland toto the collector of stampstamps forfor fixing the right valuevalue of the property,” sayssays source in the revenuenue department on condi-nditions of anonymity.ty.
I n t h e n o r mm aa ll course of things, wheneverwhenever a buyer undervalueses proper-property, the sub-registrarr impoundsimpounds the title deed after registeringregistering itit at the value quoted by the buyer and sends it under Section 47A of the Indian Stamp Act to the collector of stamps. The collector then has to determine the correct value within 30 days and work out the differential sum. The sub-registrar then charges the buyer the remaining sum to complete the registration process.
Things went wrong on August 4, 2015, when the revenue department of the Delhi government issued a notification raising the circle rate of agriculture land of Delhi from ₹ 53 lakh per acre all across Delhi to ₹ 1 crore-to ₹ 3.5 crore per acre depending on the different market rates in different areas of the Captital. Just a week after that, on August 10, 2015 LG Najeeb Jung stayed this notification for further e x a m i n at i o n . Du r i n g t h e Delhi government-LG standoff Congress leader Naresh Kumar filed a public interest litigation demanding interim stay on the notification issued by the Delhi government. Refusing the stay, the Delhi high court agreed to hear the matter.
Now, even though the matter is pending with the high court, sub-registrars, especially those in the land pooling zones, are registering land at rates over and above ₹ 53 lakh per acre.
“Purchasers who are paying stamp duty at the rate fixed by the Delhi government in its August 4, 2015, notification, are getting their sale deeds registered without problems. However, those wanting to pay according to old rate of ₹ 53 lakh per acre find that the subregistrar, after registering the sale- deed, is confiscating the document and sending it to the collector of stamps, or SDM. The SDM does not clear the file because he is waiting for the final judgment in the Delhi High Court. So despite paying for the land, buyers are kept waiting for the title for several months. They are very worried about the standoff continuing for a long time,” says a source at the Kapashera sub-registrar’ office.
Senior officials in the revenue department admit to lack of clarity on the stamp duty charged from land buyers. “What if tomorrow the Delhi High Court sets aside the August 4, 2015, notification of the Delhi government? Then the government can be accused of overcharging land buyers. And in case the court upholds it, then the revenue officer will have to follow the cumbersome process of issuing a notice and recovering the remaining stamp duty,” informs another revenue official.
Why are circle rates higher in land pooling zones? Some property brokers say that the hike in circle rate is highly unrealistic in certain areas because over a period of time the land rates have fallen due to lack of clarity on the land pooling policy (LPP). They also ask that when the government was not taking any final decision on LPP, why had it fixed two different rates for agricultural land for two areas – non LPP and LPP? According to the government notification of August 4, 2015, in northwest Delhi, the circle rate of agriculture land in non LPP zone is R1.25 crore per acre while in LPP zone it is R3 crore per acre. “It shows that Delhi government wants to kill the whole policy. The whole logic behind higher circle rate of LPP area was that the demand of High stamp duty: If circle rates are unrealistically high when compared to prevailing market rate, buyers will have to pay more stamp duty to the state government irrespective of the actual price of the property because stamp duties are calculated on the basis of circle rates Increase in the overall price of the property: Since payment of stamp duty is mandatory to get ownership of a property, any hike in circle rate leads to increase in amount paid as stamp duty charge and this pushes up the overall cost of the property Negative impact on realty market: A high circle rate often impacts the realty market negatively because it becomes a prominent factor pushing up prices. Demand usually from buyers and developers is that rates be kept low Increase in tendency to undervalue a property: High circle rates compel buyers to undervalue the property at the time of registry or drive them to adopt unreliable modes of transfer of properties like notarised general power of attorney etc Undue harassment of property buyers: Sub— registrars or revenue officials demand bribes to register properties which are undervalued because of high circle rates even if stamp duty is paid at par with the circle rate, allege purchaser