Every day some economist or other will suggest changes in lands available for industrial growth or moan our backwardness in the system of landholding. It is time to study seriously what is the present system adopted in various states and whether Torren’s system being suggested by some experts is feasible. Luckily respected Mr. Brij Kumar Agarwal, a brilliant IAS officer for the award of Master of Philosophy in Social Sciences, in Partial Fulfillment of the requirement for the Advanced Professional Program in Public Administration (APPPA), Panjab University, Chandigarh has analyzed the issue with the system prevailing in various countries and whether Torren’s system currently prevailing in countries like Australia, United Kingdom or New Zealand would suit us. His thesis is available online for reference. I am reproducing his publication below and my discussion would be based on this. I also thank him for his brilliant analysis based on excellent academic brilliance and actual field experience as an administrator who actually faced the realities.
Let us analyze the issue as under:
Almost all countries have a system of keeping the records of rights of the people over the property and transfer thereof, in some form or the other. Two basic systems that are in vogue may be classified as viz. Deed Registration4 and Title Registration. Title Registration is also sometimes referred as ‘System of Conclusive Title’ and ‘Torrens System’.
In India, we follow “Deed Registration”. The description of the system in simple words from the thesis sounds as under.
“The deed registration system, in its simplest form provides for execution of a written conveyance deed by the parties in respect of a transaction in property and registration of this deed with some designated authority. The record of registration is evidence of the transaction between the parties and can be referred in case of any dispute later on. The designated authority, generally called a registrar, examines only the formal requirements like identification of parties, signatures of the parties and witnesses, the correctness of formats of deed, etc.”
This system carries the imprint of being followed in many countries like India, the United States, France, and the Netherlands.
After the execution of the deed and registration deed for maintenance of records for future reference, the transaction is reported to be complete. Yes, the legal system provides for record of registry being available to the public for inspection and for receiving the copies, if required after some payment to concerned authorities.
What is so special about the registration of the deed?
It is deemed to be constructive notice to the whole world
In this system generally, the transaction is complete as soon as the deed is executed between the parties and registration is only for the purpose of maintaining records for future reference. The record of the registry is open to the public for inspection and getting copies if required. The registration of a deed is deemed to be constructive notice to the whole of the world in respect of the transaction contained in the deed, meaning thereby that any person intending to deal with that property is supposed to know the existence of the earlier registered transactions and the consequences thereof in respect of that property. Most of the banks, financial institutions, buyers of properties, or the government would invariably refer to the registry for reference or legal purposes. All of them employ lawyers to get legal information on these properties.
When an application for change of ownership or any other right in the property, like lease, mortgage, etc. is submitted to a registrar(under the deed register system), unlike his counterpart indeed registration system, he plays an active role and goes on to examine the legal validity of transaction in detail. He registers the transaction in a public register only if he is satisfied that the transferor has a clear title to transfer his right and there is no legal hindrance in passing the title to the transferee. It indicates that the transferee gets a clear title that will stand the ambit of law for ownership. This system is prevalent in many countries like Australia, New Zealand, United Kingdom, Germany, and Canada.
Let us compare both the systems with their strengths and weaknesses.
Deed register system:
In this system, registration is only the evidence of a transaction and does not confirm the transfer of title in favor of the transferee. The deed registration conforms to the rule of law ‘Nemo dat quod non-habet’, literally meaning ‘no one gives what he doesn’t have’.
Indeed registration system’s actual transfer of title depends on many other factors that are not examined by the registrar at the time of registration. He could not confirm whether the title deed is free of blemishes.
Any defect in the title deed only gets transmitted from the transferor to the transferee.
Let us elaborate on the procedure of how the registration of deed is undertaken. The lawyer of the transferee, before purchasing the property satisfies himself that the seller has an undisputed title over the property. Generally, the lawyer or the buyer goes through all records of transfer deeds, perhaps 12 years in the case of a bank or more in the case of private individuals or corporates who would bear the cost of searching the records to confirm that the seller has undisputed title over the property. The process is to go on to find a “root of title” which may be an undisputed document like a government grant. After getting satisfied with the process, the buyer feels that he/she has an undisputed title over the property and goes ahead with the transaction.
In a basic deed registration system, there is no uniform system of description of property under transfer. As per the convenience of the parties, a variety of markers may be used to identify the property like street names, geographical features, nearby permanent structures, adjacent properties, etc.
Under this system, a deed is registered with reference to the parties concerned to the transaction and not with reference to a particular property. Many properties of different kinds and at different locations can be transacted through a single conveyance deed.
Due to this real situation developing in many situations, searching the history of the title of a particular property is obviously, very cumbersome in a deed registration system.
To obviate this issue, the registrar maintains the grantor – grantee index as well as the tract index.
In a tract-index individual property is supposed to be arranged in a logical sequence with details of the grantor, grantee, and reference to the copy of the deed mentioned against them.
It is equally true that an effective tract-index can be maintained only when there is a uniform system of identification of properties. Such a system exists in countries like India, France, and the Netherlands, where there is the practice of maintaining cadastre on the basis of the cadastral survey.
Let me quote the definition of cadastre on the basis of the international federation of surveyors.
“A Cadastre is normally a parcel based, and up-to-date land information system containing a record of interests in land (e.g. rights, restrictions, and responsibilities). It usually includes a geometric description of land parcels linked to other records describing the nature of the interests, the ownership or control of those interests, and often the value of the parcel and its improvements.”
Title Registration system:
Ruoff lays down ‘mirror’, ‘curtain’ and ‘insurance’ principles as defining features of a title registration system. The mirror principle means that the register accurately reflects all the material facts relating to the title, curtain principle implies that for ascertaining the title no investigation beyond the register is necessary and the insurance principle requires the state to guarantee the correctness of the register and compensate a bona fide claimant suffering a loss due to an incorrect entry in the register. Hogg has classified those systems as registration of title systems where land is used as a unit of property, transactions are registered with reference to the land, registration of transaction is essential for its validity and registration acts to some degree as a warrantee of the title of the person registered as the owner. The indemnity by the state has not been included by him as an essential characteristic of the title registration system.
The following matter as revealed is very disturbing from a buyer’s point of view:
Now with the dwindling interest in the title registration system and addition of insurance and study of family history of the title deeds by competent lawyers to pinpoint the origin of the property, if possible, to make efforts to ensure unhindered one, the system in India gets a reawakening in spite of some experts jumping to decry the system as totally useless.
But the author of the thesis, a well known I.A.S.officer with field experience has given the following solutions which are worthy of discussion and arrive at some solution.
India actually has two systems of maintaining a record of ownership of property, being operated by separate authorities under a separate set of laws. While documents relating to the transfer of rights in the property are registered with the registrar under Registration Act 1908, land parcel wise ownership records and cadastral maps are maintained by the Revenue Departments in each state. Unbridled corruption has raised its heads at almost all states except those where computerized maintenance of records has been introduced very successfully.
It should be made mandatory to attach a copy of record-of-rights with the deed of transfer. A deed should be accepted for registration only when the name of the transferor appears in the record-of-rights.
Transfer of part of property many times leads to disputes later on. To prevent this situation, it should be provided in the law that a sale deed in respect a part of the property will not be registered unless new map showing the clear division of property between the seller and purchaser is attached with the sale deed. With Indian satellites around the sky at any point of time, mapping of land should be done by all state governments.
Under the Registration Act 1908- a large number of documents are exempted from registration. Our Indian way of providing exemption flows from the British who never wanted full enactment of any laws so that Indians fight among themselves. Ruthlessly, no exemption has to be made.
There is a need to make amendments in the Registration Act 1908 providing for the registration of the notice of pending litigation. The Law Commission and Supreme Court have also recommended such amendments in the law.
The record-of-rights can be made reliable by not allowing any alteration in the record except on the application of a right holder, application of a person claiming to be the right holder, or court order.
I echo the feelings of respected research scholar Mr. Brij Kumar Agarwal when he has opined as under:
“Under the National Land Records Modernization Program, computerization of record-of-rights and deed registries has been taken up throughout the country. This work should be completed at earliest. Computerization will further reduce the relevance of title registration in India.”
This has been done in many states to gain an important position among ease of doing business ranking.
In my view, all recommendations enumerated by me from Chapter-7” Relevance of Title Registration for India” on pages129-135 are worth implementing without involving further academic/administrative heads who would never allow any changes in-laws. Thousands of court cases running into lakhs over the past 7 decades cry for reforms and only states can take lead to implement the rudimentary changes like computerization, total removal of corruption, and engaging top lawyers at a young age and allow them to manage the technical matters rather than appointing government servants with least inclination or vigor to merge India into 5 Trillion US D economy. Land reforms with the least delay and with the most efficient records duly computerized with the least judicial intervention will allow the nation to sail smoothly.
Disclaimer: Loss of family property on account of poor land records maintenance by the state government, forced me to write this article. The views are my own and not intended for legal advice. Neither taxguru.in nor any government is responsible for my views. Our land laws are very complex and consult an expert lawyer for guidance.