CHENNAI: G Shyam Sunder, a Chennai-based advocate, has travelled to 18 states in India to compile the different procedures and practices followed in the registration, revenue and town and country planning department. In his book titled 'Property Registration, Land Records and Building Approval Procedures Followed in Various States in India', Shyam Sunder points out to the benefits of standardising procedures. Edited excerpts of his interview with ET:
In your travel to most of the states in the country, what are the interesting trends that you observed in the way these three departments function?
The procedures, which are being followed in the three departments - registration, revenue and town and country planning departments - these differ from state to state. There are only a few states which follow very good procedures.
Unfortunately, in these three departments, most states have not accorded public planning measures, which will be useful not only for the people who buy property but also to protect the interest of the bankers. I feel that time has now come for adopting standardised practices all over India.
Institutions like the RBI and the IBA (the Indian Bankers' Association) should step in and ensure that recommendations must be made for improvements in states that are lagging behind.
What are the public friendly measures you suggest state governments adopt?
The revenue department should issue a computerised encumbrance certificate where they need to record everything such as what are the transactions that have taken place on any particular property for, say, x number of years. Another friendly measure should be viewing the value of a property online.
Third, in many states, the website of the registration department, it doesn't mention what is the prevailing stamp duty and what are the prevailing registration fees payable in that particular state. Fourth, any mortgage being created in favour of banks and financial institutions within that particular state has to be either compulsorily noted or compulsorily registered with the sub-registrar office.
This has a three-fold advantage. Firstly, the one who buys the property gets to know that the property is not getting charged or mortgaged anywhere. Second, the advantage from the bankers' point of view is that their interest is secure. The third advantage is that the state gets additional review by way of registration; Unfortunately, only six states in India (of the 18 states which are being covered in my book), follow this practice.
You mention Andhra Pradesh as the best state in your book...
Andhra has two good public friendly measures in the registration department. One, the encumbrance certificate is issued for a very long period from 1.1.1980 onwards and no other state in India has got the issuance of encumbrance certificate for such a long duration.
Two, this encumbrance certificate which is being issued by the registration department in Andhra can be viewed online. Apart from Andhra Pradesh, a similar facility is available in Maharashtra. This is available from 2002 onwards. Apart from these two states, this e-search or e-encumbrance facility is not available in India. This would be a useful measure if it were to be implemented all across India.
So the other states issue encumbrance certificates by hand? How effective is that?
Many states still issue it by hand, which means effectively what happens is you don't ascertain whether the property has been mortgaged or not, you can't really ascertain the authenticity of the certificate which is issued by hand.
In fact, I have seen certain states demanding an affidavit from the owner of the property. They take an affidavit from you, an undertaking from you stating that you are the owner of this property and based on this, they give you a manual encumbrance certificate stating that based on the affidavit given by you, you are the owner of this property, which doesn't really make sense.
Banks in certain states, I am told, don't insist (on encumbrance certificates) because it is as good as waste paper. It has no use at all. This is one thing that has to be changed. I guess it can't be changed overnight but nevertheless, institutions like the RBI should play a very active role in trying to ensure that this is being done.
A number of benami or fraudulent deals happen in the real estate sector. What are your suggestions on preventing such transactions?
As far as benami deals are concerned, these kinds of transactions can be detected in case records are fully computerised. One, any document which is presented in the registration department should be fully scanned. A computerised encumbrance certificate should be issued.
The land records should be made available online for public scrutiny. If these three measures are implemented, then the possibilities of fraud or people getting duped by duplicate or fake documents will be drastically reduced. It is not that only the public is getting duped, even bankers are getting duped because of fake documents.
had been to the offices of the various sub-registrars where these records are maintained in a big registry. The records are given to the advocates for scrutiny and because of continuous scrutiny, the pages are in tattered conditions. I think that may be one of the reasons why the records can't be computerised.
The National Land Records Modernisation programme was introduced in 2008. What has been the progress of this programme in various states?
There are some states that have completed this fully. The full computerisation of land records has been done by Haryana and many parts of Madhya Pradesh and Odisha are covered.
The other states are still implementing it. Of the 18 states I have covered in my book, there are still four states still don't have the facility for online verification. The four are Assam, Kerala, Jharkhand and Gujarat. In Kerala, I am told that the basic land records have not been updated for the last 60 years. Manually it is getting updated.
Some in the industry say that some practices of getting various approvals in India are outdated and are as old as the times when the Britishers were in India...
See, again if you look, in South India, different states have got different practices on this. Now, there is a system called MeeSeva service in Andhra (Pradesh). A similar kind of facility has now been introduced in Punjab.
This effectively means that you don't have to go to a particular government office. Each centre is like a single window, one-stop-shop. But, this means you can't verify the records of the last 3-4 years in Andhra Pradesh online. Punjab has also got a facility where you don't have to go the block level or you don't have to go to the village administrative officer to get any document.
What are your views on the Real Estate (Regulation and Development) Bill?
If the bill is passed, it will ensure a level-playing field. What happens is buyers are at the mercy of the builders. Once they pay the money, upfront or a substantial amount of money, there are inordinate delays in projects and builders come up in the end with some other excuses for delays, then demand additional money.
(Developer's association) CREDAI says the responsibility falls on the builders in cases of project delays but the fact is that approvals from the government take a lot of time...
They are demanding a single-window clearance, agreed. They can demand a single-window clearance only when the entire records are computerised. Until and unless there is a close interaction among various government bodies, it is not possible.
It should be made mandatory that only when clearances are obtained, the builder should be allowed to sell or market his apartment. They can't be any pre-launch or soft launch. I would say that this is a lame excuse by the builders. But, I do agree that there is a delay (on part of the government bodies).