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Government moves towards registration of title to immovable property - International Law Office

International Law Office

Real Estate - India

Government moves towards registration of title to immovable property

November 04 2011

Introduction
Deeds system
Conclusive title
Principal features of the bill
Effect of registered title
Comment


Introduction

With a view to establishing an effective and transparent land title and management system, and as an extension of its ongoing efforts to update, streamline and digitise India's land record system, India's central government has proposed the introduction in Parliament of the Land Titling Bill 2011. The bill is presently under review and may undergo further change.

In its current form the bill seeks to implement a system of conclusive titles to properties through electronic registration. As land is a state subject under the Constitution, states will have the discretion to adopt the bill with state-specific modifications.

Deeds system

India, as opposed to other developed jurisdictions, follows the deeds system of registration of title (rather than the Torrens system, which is an indefeasible title system). State registries constituted under the Registration Act 1908 therefore operate as mere repositories of documents or assurances registered with them and do not endorse or certify the validity or legality thereof, resulting in presumptive titles. Further, revenue records are often the only evidence of presumptive titles, particularly in rural areas.

The deeds system is flawed and presents various difficulties, as buyers and lawyers must satisfy themselves on the nature and marketability of title through a complex due diligence process encompassing:

  • searches in registries spanning three or more decades;
  • searches of government, land and revenue records; and
  • publication of public notices inviting claims, administering requisitions on title and obtaining detailed warranties from titleholders.

Despite this and the necessary standard of care being exercised, it is not always possible to conclusively determine that a titleholder holds a marketable title free from encumbrances. This has therefore led to qualified certification of title and delayed the entry of title insurance.

Conclusive title

Unlike a previous draft bill that contemplated the Torrens system, the current bill provides for a hybrid system of 'conclusive property titling' under which registered titleholders will be deemed to hold conclusive evidence of ownership or interest over their properties on the expiration of three years following registration, except in case of fraud. However, there is no state guarantee of title and authorities constituted under the bill are immune from acts carried out in good faith.

Principal features of the bill

When a state adopts the bill, it must:

  • constitute a land titling authority;
  • establish title registration offices; and
  • appoint a title registration officer, a district land title tribunal and a state land titling appellate tribunal.

The appellate tribunal will hear objections, if any, to orders passed by the tribunal. Civil courts will have no jurisdiction to hear proceedings on matters under the jurisdiction of these authorities, other than state high courts, which will be empowered to hear appeals from orders of the appellate tribunal.

Initially, a record or register of properties in notified areas must be drawn up, containing:

  • survey data and boundaries;
  • a unique property-specific identification number, which may be linked to the unique identification number (for individuals) under implementation in India; and
  • a record of titles.

Each property will ultimately be allocated a distinct biometric identification or identity.

After determining and recording entries of titleholders through a transparent process including inviting objections and examining documents and records, officers will record entries of titleholders in registers of titles as well as any charges, covenants, easements or encumbrances affecting them. If a title is disputed, an officer may make an entry thereof and refer the dispute to the tribunal.

The bill mandatorily requires concerned persons (including the government) to notify officers of the following matters that concern immovable properties in notified areas:

  • civil suits or appeals;
  • proceedings under land acquisition laws;
  • government transactions;
  • equitable mortgages (not being compulsorily registrable under Indian law);
  • statutory charges;
  • pending actions; and
  • family settlement agreements, powers of attorney and testamentary orders including letters of administration and probates.

The authority must publicly notify the register of title once it has been generated for a notified area or part thereof. The register will include:

  • general description, map and location details;
  • descriptive data (eg, a unique identification numbers, plot numbers, site, built-up and vacant areas, addresses and undivided shares);
  • details of survey entries, provisional title records, conclusive title records and status, mortgages, charges, other rights and interests;
  • details of past transfers and transactions; and
  • details of any disputes.

After the register has been notified, any transfer of registered property must be undertaken in accordance with the bill. Specifically, alienations, extinguishments or alterations of rights, will require compulsory registration, failing which the transaction will be void.

Persons objecting to entries in the register have three years from the date of notification in which to file their objections with the tribunal. They may also apply to the officer to enter their objections in the register.

Provisions are also contained with respect to succession and registration of title of legal heirs of a deceased titleholder, unless a substantive dispute exists regarding succession, which would be referred to the concerned civil court for adjudication.

Effect of registered title

Unless reversed, an entry in the register will be conclusive evidence of ownership or interest of the titleholder and will not be open to question in a court of law. Accordingly, registration of title will grant ownership of the registered property to the titleholder, together with all rights and privileges thereto and subject to any subsisting interests and encumbrances disclosed therein. Section 41 of the bill further provides that title recorded in the register will be considered as evidence of the marketable title of the titleholder.

Comment

There is little doubt that the bill will revolutionise the entire concept of property ownership in India, safeguard owners and consumers, set the stage for title insurance and accelerate real estate development. The bill will also protect poorer agricultural landowners that have little or no evidence of title or ownership.

It is imperative that the bill is finalised and state governments make concerted efforts to implement it. Implementation will certainly be a lengthy and challenging process in light of various issues - these include a conflicted land record system, multiplicity of land record authorities and land records not being in electronic form, and often poorly maintained. State governments must also engage suitably qualified and experienced officers and professionals not only with expertise in land records but with an in-depth understanding of the plethora of laws, customs and practices that impact property rights, including personal laws governing India's diverse communities.

For further information on this topic please contact Viren Miskita or Mani M Miskita at MT Miskita & Company by telephone (+91 22 2204 4238), fax (+91 22 2282 8456) or email (viren@miskitaco.com or admin@miskitaco.com).


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