Registration
of all the properties has commenced in all the sub-registrar offices again by
virtue of the judgment delivered by the High Court of Karnataka.
Government
of Karnataka issued a notification on 23/04/2005 thereby classifying certain
documents as opposed to public policy, which includes sites on agricultural
lands not converted, properties coming under BMP revenue area, CMC area having
Katha, Betterment and Tax paid receipts and sites not formed without obtaining
approved layout plan from the competent authority. Further, one more
notification was issued by the Joint Secretary to Government of Karnataka,
Department of Revenue bearing No.RD 174 MUNOMU 2005 dated 23/08/2005 in the
guise of some frequently asked questions.
The
above said two notifications were challenged by one Sri.Pavanesh before the
High Court of Karnataka, Bangalore, by initiating Public Interest Litigation, seeking
quashing of the above two notifications, in WP No.24309/2005.
The
Petitioner contended that the Impugned Notifications are baseless, illegal and issued under the
arbitrary state action for the reason that said notifications have classified
the registration of all the properties coming under the jurisdiction of City
Corporation established under the Karnataka Municipal Corporations Act or
Municipalities under the Karnataka Municipalities Act or within the
jurisdiction of Grama and Taluk Panchayat as opposed to public policy, which
affects the statutory powers envisaged under the statutes and any such
declaration can be done only by the Court of Law.
Deemed Conversion:
The
petitioner has relied on the decision delivered in the case including Special
Deputy Commissioner Vs Narayanappa, reported in ILR 1988 Kar 1398, which has
declared that the jurisdiction of the Deputy Commissioner to convert the land
for non-agricultural purpose is ousted in respect of the lands falling within
the area of the Outline Development Plan or CDP. Further in the case of BDA Vs
Vishwa Bharathi House Building Co-operative Society Limited, reported in ILR
1991 Kar 4401, it is held that lands which come within the jurisdiction of the
Corporation are deemed to be converted for that purpose. In another case, reported
in ILR 2005 Kar 60, the Division Bench has held that the Land Revenue Act would
cease to be applicable to the lands which come within the jurisdiction of the
Corporation.
In
this context, the Petitioner has contended that various layouts in the State of
Karnataka
were formed over hundred years ago and now insisting for obtaining conversion
of such lands does not arise at all. On these grounds, the said notifications
were termed as the one issued without application of mind and only for
extraneous considerations.
Government contention
On
the other hand, the Government, substantiating its stand over the impugned
notifications, strongly contended that the Government has passed the above
notifications under section 22-A of the Registration Act, which empowers the
Government to declare the registration of any document or class of documents as
opposed to public policy by notification in official Gazette. Further, the
public policy of the State cannot be questioned if the same is founded on data,
statistics, factual position and in furtherance of public interest and that the
notifications were issued only to stop large scale violation of the special
statutes resulting in a chaotic situation and disorderly growth of the cities
and towns and affecting the public interest, in as much as poor and hapless
aspirants of sites being victimized and opposed the said petition as hopelessly
misconceived.
Judgement
After
hearing the arguments, the High Court considered the law laid down by Apex Court ,
wherein, it was held that the Executive, acting upon the powers vested on them
under section 22-A of the Registration Act, cannot sub delegate the powers
which would control the transactions which fall out of its scope. The Court
further held that the essential functions of the legislature cannot be
delegated and that the subordinate legislation, which is not backed up by any
statutory guideline under the substantive law and opposed to the enforcement of
a legal right, would be invalid. It is also held by the Apex Court that so long as the statute
itself is not amended, any notification issued by the Government prohibiting
few of the documents from registration, is not sustainable. The High Court,
relying upon the ratio laid down in the case mentioned above, held that a transaction
between two persons capable of entering into a contract, which does not
contravene any of the statute would be valid in law and such transactions
cannot be illegal. Consequently, the impugned notifications were quashed.
Revenue loss to the Govt
Consequent
to the issuance of the above said notifications, the Government has suffered
huge loss of revenue, wherein direct loss to the department by way of stampduty and registration charges, is estimated nearly 600 crores in addition to
indirect income which will be multiples of 600 crores. For the investors who
plan to invest in Karnataka to start their business will have to firstly
acquire the property and subsequently have to construct the building which
requires cement, steel and other construction materials apart from labour
skill, which again attracts sales tax, service tax, excise duty and cess, which
are some of the sources of revenue to the government. Due to issuance of the
said notifications, various projects have been dropped since the investors were
not able to acquire the property for the development in Bangalore and Karnataka. Infact the investors
are now avoiding to invest and are not ready to take any kind of risk to invest
in Karnataka due to constant changes in the rules by way of circular and the
Government is not taking proper decision on such important aspects. Various
developers and industrialist who had planned to start their project earlier to
issuance of the said notifications have been forced to shift their place of
business to other States.
Public problem
Because
of the ban on the registration, the public incurred lot of inconvenience. The
purchaser, who had already paid advance sale consideration, could not complete
the transactions due to the ban. Further, the Banks are reluctant to release
money due to the ban on registrations. The vendors who want to sell the
property for urgent necessity, such as to meet their medical, marriage expenses
or expenses incurred for construction of alternative house, had to suffer. The
public also had to suffer since the demand for land was increasing along with
the prices due to scarcity of land and the people belonging to middle class
could not cope up with the mounting prices made them owning a house as an
unfulfilled dream.
Powers of the Registering Officers
The
Registering Officers act in the ministerial capacity and have no power to
decide the title of the executor. The
Sub-Registrar is entrusted with a duty of registering the documents in
accordance with the provision of the act and do not have power to probe into
the genuiness or legal aspects of the documents presented before him. If the
documents are bogus or false, the party affected by it will have the right to
initiate proceedings in the court of law, which is the competent authority to
decide and declare the validity of the title.
Approved layouts
Of
course the said ban on registrations has enlightened the public about the legal
impediments involved in buying the sites formed in agricultural or revenue or
converted private layout without approval or Residential sites formed in the
layout not approved by BDA or BMRDA. After this notification, public has
starting thinking twice to purchase any revenue land or Gramathana land, which
is available as form no.9 and 10 Village Panchayat Khatha and also apartment
constructed on the property approved by
the Village Panchayat.
Purchaser duty
Generally,
the purchasers are investing the money for owning a property once in their
lifetime from the money saved during their life time or borrow from the
financial institutions. So abundant caution will have to be exercised by purchasers while purchasing the
property since valid and marketable title of the property is very important,
which can be verified with the help of an Advocate, having very good experience
in such matters.
Selection of the property
No one can give a
better title than what they themselves have. This is the basic principle
envisaged in Transfer of Property Act. The vendor having a valid title can
transfer his title by way of sale deed and register in the office of
Sub-Registrar in favour of the purchaser. Even if the document is registered,
the vendor who do not have marketable title cannot transfer proper title.
Generally, site
allotted by BDA, KHB is the safest property to invest. However, BMP revenue
jurisdiction properties, converted land in the municipal area having proper
Khatha and tax paid receipt is also comparatively good properties.
Nevertheless, in any such properties, title should be traced with the proper
care.
Revenue sites
formed in the agricultural land without conversion or site formed in the
converted land without proper sanction of the layout is a dangerous area to
invest.
While buying
Flats, it is advisable for the purchaser should select the property which comes
within the limits of BMP, BDA Layouts, CMC areas with approval of the BDA or
BMP or CMC. The apartments coming on the revenue belt with the sanction of the
village Panchayat is not advisable to buy. Further, it is advisable for the purchasers
to probe into the previous history of the promoter in the field of construction
in person and then to decide, in addition to tracing the title of the property.
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