8.2 The problems relating to the legal structure.

32. Rather strangely these legislations have long sustained dichotomy between ownership and registration. While Transfer of Property Act provides substantive legal framework for purchase and sale of immovable property and the Stamp Act imposes a fiscal charge on the transferable property as a precondition for registration, the Registration Act institutionalizes the process of registering documents to create a public record of immovable property transactions. The Registration Act mandates registration of documents, not the title and this distinction is the fundamental character of our country’s presumptive titling system through registration. Thus, registration of a document recording purchase of immovable property does not confer guaranteed title of ownership, instead it only serves as a public record of the transaction having presumptive evidentiary value, but it is never a conclusive proof of ownership. The presumption is rebuttable and can always be challenged in a court of law. This system has therefore placed a significant burden of due diligence on a prospective buyer who must undertake a painstaking title search, examining the chain of ownership through a series of past deeds, sometimes going beyond 30 years or more, to ensure marketable title. The uncertainty also compels obtaining a no encumbrance certificate from the sub registrar’s office to confirm that the property is free from legal liabilities or mortgage. Property purchase has not been easy, it is not difficult to find people grudgingly telling us that it is in fact traumatic. The present system of presumptive title through registration is also the primary contributor to high volume of land related litigation in India. Property disputes account for an estimated 66% of all civil cases. More than a century has passed by, and we must dare to think and look for alternatives.
33. The legal framework for purchase and sale of immovable properties suffer from several systemic deficiencies that undermine reliability, transparency and efficiency. There are problems relating to i) fake and fraudulent property documents, ii) rights and liabilities, iii) land encroachments, iv) delay in verification processes, and v) role of intermediaries etc. In addition to these, there are also administrative problems at the office of the sub-registrar of registration, involving the statutory and regulatory requirements of the presence of the buyer and seller along with two witnesses for document verification, legal authentication collection, and official recording, all of which require coordination, synchronization, and our experience has shown us that this process is cumbersome and time consuming. Moreover, land being a state subject under the Constitution, these procedures vary from state to state and are highly fragmented.