Supreme court
NEW DELHI: Observing that sale or purchase of immovable property is a distressing and traumatic task fraught with risk of fraud as it is still regulated by colonial laws, Supreme Court on Friday said the time has come to reform the procedure to make it simpler, transparent and fraud free by use of technology and making property registration a conclusive proof of ownership.A bench of Justices P S Narasimha and Joymalya Bagchi said property laws have long witnessed dichotomy between registration and ownership as registration does not confer ownership and this leads to massive litigation, which is 66 per cent of all civil disputes in the country. It said the problem could be addressed by achieving convergence of conclusive titling with registration, which is now possible due to technological advancement.Writing the judgment for the bench, Justice Narasimha said more than a century has passed and the country must dare to think and look for alternatives. The efficiency and transparency with which immovable property is bought and sold is demonstrative of a nation’s institutional maturity and a testament of the confidence and trust its citizens repose in the integrity of its legal framework, he said. The judgement can be a turning point in bringing much needed reform in transaction of real estate properties SC passed the order while quashing the Bihar govt’s decision to make ‘jamabandi’ — holding allotment — of a land mandatory before its transfer or sale. The court appreciated the intention of the state to synchronise the registrable document with real-time land holding but said the process of mutation and the process of survey and settlement are nowhere near completion.“Under these circumstances and considering the nascent stage at which the empirical data is translated as mutation into the relevant records, and the fact that for this purpose survey and settlement are to be conducted, interlinking and restraining registration till jamabandi is effected would be illegal, as it has a direct impact on the right and freedom to purchase and sale property,” the bench said.SC said the present legal framework for purchase and sale of immovable properties suffers from several systemic deficiencies that undermine reliability, transparency and efficiency. It asked the Centre and the Law Commission to examine use of technology such as Blockchain in sale or purchase of property as it would address the problems related to fake and fraudulent property documents, land encroachments, role of intermediaries etc.“Fortunately, due to technological advancement this process is duly and more accurately achievable. We have incorporated emerging technologies as instruments of institutional reform. Blockchain technology has garnered particular attention for its potential to transform land registration into a more secure, transparent and tamper-proof system,” the bench said.“It is suggested that adoption of the technology would ensure immutability, transparency and traceability, thereby minimising fraud and unauthorised alterations. The technology is said to offer an alternative paradigm by encoding land titles, ownership histories, encumbrances, and by recording transfers on a ‘Distributed Ledger’ in an immutable and time stamped form,” it said.SC said each entry, once validated into the ‘Distributed Ledger, becomes part of a cryptographically linked chain of information that cannot be retroactively altered without detection, and this cryptographic immutability could perhaps address the structural fragility of the Indian record keeping system. “The Blockchain design could integrate cadastral maps, survey data and revenue records into a single verifiable framework, which, while maintaining a transparent audit trail, is accessible to multiple departments and the public,” it said.
