Registration of documents opposed to public policy

Registration of documents opposed to public policy

Can a registration of a document be claimed as a right? Indian Registration Act 1908 has under section 17 prescribed certain documents which are compulsorily registrable and under section 18, the documents, the registration of which is optional. As such can anybody claim as a right, the registration of document which are compulsory under section 17 of Indian Registration Act 1908.

Various states have amended the main Registration Act and have framed rules there under Karnataka Government has inserted a new section 22–A, with effect fro 23.10.1976; which empowers the State Government to prohibit the registration of certain documents as opposed to the public policy, by a notifying in official gazettee, and the registering officers shall refuse to register any such document.

Government of Karnataka through Revenue Secretariat Notification No. RD/14/MUNOMV/2005, dated 23/04/2005, has in exercise of powers conferred under section 22-A of Registration Act as amended by Karnataka Act 55 of 1976 has declared the registration of following documents as opposed to the public policy. This is effective from 06/05/2005.
 

Prohibition on registration:

1.    Site with or without building in agricultural land which is not converted for non-agricultural purpose under section 95 of Karnataka Land Revenue Act 1964.

2.    Site described as Gramathana site (form no. 9, 10) or other site declared under form no. 19 under rules framed Karnataka Municipality Act 1964, but not actually converted as such site.

3.    Site on a revenue land described as Gramathana Site or other site or a site with a building on which no layout plan is approved and a release certificate is issued from local planning authority like BDA, BMRDA, BIAAPA, BMIC, etc.

4.    Site on a revenue land described as Gramathana site or other site, flats, industrial site, commercial site, without requisite permission under section 79 A and B read with section 109 of Karnataka Land Reforms Act.

Thus the transfer of only the following properties are permitted.

a.    Properties falling under Bangalore Mahanagara Palike.
b.    Properties allotted by BDA
c.    Properties in BDA approved layouts
d.    Properties in layouts approved by other local planning authorities like BMRDA, BIAAPA, BMIC etc.


In the preamble the notification, it is stated that many properties are registered based on bogus and fabricated documents which do not pass on legally perfect title to the purchaser. In many cases, the agricultural land is transferred by registration as non-agricultural land without actually converting it to a non-agricultural purpose in accordance with Section  95 of Karnataka Land Revenue Act 1964 and Karnataka Land Grant Rules 1989. This has led to haphazard growth of Bangalore and other cities.

Conversion of Agricultural land:

The agricultural land has to be used only for agricultural and related purposes and not for any non-agricultural purpose. If it is be used for any non-agricultural purposes, the agricultural land needs to be converted for non-agricultural purpose under section 95 of the Karnataka Land Revenue Act. The special deputy commissioner is authorised officer to accord for such conversion and prescribed amount of fee has to be paid. The conversion shall be for specific purposes like residential, Industrial, commercial, which has to be utilized in certain period.  If not the permission for extension of time has to be obtained.

Nearly 70% of population of our country depend on agriculture as a source of livelihood. The agricultural lands in and around cities act as lungspaces. The indiscriminate conversion of agricultural lands deprive the agriculturists of the source of their livelihood, convert the lungspaces into concrete jungles, the agriculturists who do not know any other line of livelihood, expend the money on luxuries, and in course of time may have to struggle to make both ends meet. Thus conversion of agricultural land should be on selective basis, based on necessity.  Layouts made in revenue lands are not approved by planning authorities, lack basic minimum civic facilities like roads, parks etc.

Approval of layouts:

Any layout formed have to be approved by BDA, BMRDA, BIAAPA, BMIC etc depending upon their location. None of the local government agencies like village panchayats, city municipal councils, city corporation have powers to approve layouts.  But inspite of this clear provisions, we come across various instances, where layout are approved by village panchayats, city municipal councils, but such layouts continue to be unapproved layouts.  The approved layouts have all civic facilities like roads, parks, sites for Civic amenities confirming to prescribed standards.

Highrise buildings

Village panchayats may approve building plans of ground plus one floor and city municipal councils may approve building plans with ground plus 3 floors.  Anything, beyond has to be approved by BDA.  But in complete violations of this rule, we find gram panchayats, city municipal councils approving building plans beyond their powers leading to unplanned growth.

Gramathana sites 

These are the sites in village limits which are used for residential purposes.  Genuine Gramathana sites are very few and rare, and one may have to verify old village survey maps to identify Gramathana sites.  But many village panchayats issue form no. 9 and 10 to agricultural lands and collect property tax.  But they continue to remain as agricultural lands in revenue records and have to be converted to mean non-agricultural purpose before used for residential purpose.

Section 79-A & B and 109 of Karnataka Land Reforms Act 1961.

Government notifications prohibits the registration of  Sale, gift, exchange, mortgage, agreement to sell, lease or assignment or otherwise of the properties described as Gramathana site or other sites, flats, industrial site, commercial site without requisite permission, under section 79 A and B read with section 109 of Karnataka Land Reforms Act

Section 79 A, prohibits the acquisition of agricultural lands where assured annual income is Rs. Two Lakhs or more from non-agricultural source.

Section 79 B disallows the holding of agricultural land by persons other than persons cultivating the land personally.  Further, it also prohibits the holding of land by educational, religious, charitable, institutions or society or trust other than institution, society, trust referred to in sub-section 7 of section 63 of Karnataka Land Reforms Act , a Company, and association , or other body of individuals not being a joint family, a co-operative society other than a co-operative farm.

Section 63, deals with ceiling on holding of agricultural lands, and sub section 7 prescribes that any educational, religious, charitable institution, society, trust of a public nature is entitled to hold agricultural land to the extent of the twenty units, provided that the income from the land is appropriated solely for the institution, society or trust.

Section 109 of Karnataka Land Reforms Act empowers the state government to exempt any land in any area from the provisions of sections 63, 79-A and B or so subject to the provisions of Karnataka Town and Country Planning Act 1961, and prescribes limit for such exemptions for various categories.

Impact

The government notification disallows the registration of certain documents of some categories of property without following prescribed process which are against law. Though there are various laws, which disallow alienation of some category of properties without following prescribed process certain vested interests were circumventing the process and the documents were registered.  This has been prohibited now as opposed to public policy.

Government should have done this much earlier, but though one should welcome the action of the government as it protects the interest of purchaser, farmer and ensures orderly growth of the city.  The persons who suffer are middlemen, land sharks and exploiters.

Agreement holders

Many end users who are not aware of the prevailing laws might have paid considerable amount of advance and have entered into sale agreements to purchase the properties.  Many might have paid the advances against receipt only without executing sale agreements.  Most of them belong to middle class.  It would be difficult to get the refund of  advance amount paid.  The limitation period also operates against such agreement holders.  Hard earned money is blocked, as such they may not afford to purchase alternative property because of shortage of funds.  So in most of the cases the money may be lost.

Unapproved layouts

There are many layouts which are approved by Village panchayats, City municipal councils, but not by BDA, BMRDA, etc.  The developers have invested huge amounts in developing the lands.  Many developers have borrowed from banks.  As the registration of sale of sites, buildings in such layouts are not allowed the developers have to incur heavy expenditure by way of interest on loans apart from their investments getting locked.  Even financial institutions which have financed such projects may not be in a position to enforce the securities.

Part Performance of Contract

Some vendors might have delivered the vacant possession of properties to the purchaser in part performance of Contract.  As the registration of Sale deeds are prohibited the vendors cannot demand the balance consideration amount, from purchaser, unless the sale deed is registered nor the purchasers be evicted.

Financial Institutions

The position of financial institutions which have financed the formation of layouts purchase of houses, flats is also very delicate.  Though the accounts are classified as NPA, they cannot enforce the security.  There are instances where the securities are enforced, properties are auctioned, sale certificates are issued but cannot be registered.  The successful bidders who have parted with substantial amounts are left in a lurch.

Sale deeds executed but not registered

In many cases the sale deeds are executed by expending substantial money on stamp duty, consideration amounts are paid to the purchasers, here the sale deeds could not be registered because of government notification.  The purchasers are exposed to much inconvenience.

Property rates 

As the supply is very much restricted the property rates are likely to soar and the market will be sellers market.  The rates may reach unaffordable level, also and it may become difficult to find purchasers.

Existing structures
 

Many buildings have come up in revenue sites and unapproved layouts. Such properties are assessed for tax by village panchayats, city municipal councils, Kathas are also issued. Many such properties have changed hands and the sale deeds are registered. But such properties cannot be sold, leased, even in case of dire necessities.

Impact of Home Loans

Home loans form major chunk of loan portfolio.  The sale and purchase of properties are more in outskirts of the city, which fall under City Municipal Councils.  But many  of the layouts, house grouping schemes, buildings are not approved by authorized agencies.  The registration of such sale deeds of such properties is not allowed. So home loan sector will suffer.

Remedy:

The government may impose penalty on constructions, which have come up in revenue sites, gramathana sites, and also on unapproved layouts, and regularize them. Within some stipulated date. There should not be any regularization of unauthorized constructions, layouts after the stipulated date.

The corporation, City Municipal Councils, Village Panchayats should operate within their powers, have to co-operate with planning authorities. The officials of these local bodies who violate the rules should be made accountable. The government should provide sufficient staff, infrastructure to the planning authorities like BDA, BMRDA to approve layouts, building plans, and to penalize, the violators. The present prohibition on registration of documents of transfer of certain properties should not be diluted on the grounds that the income to the government has reduced.