Value Proposition for Property Registration

2Property Registration in India provides the property owner with legal sanctity for the purchase transaction executed on the property during transfer of ownership. The registered sale deed document protects an individual’s ownership rights over the property and is a vital “proof of property transaction” that is accepted by the Indian Court of Law in the case of property related disputes.

However, over the years, several instances of document forgery, duplication and faking have led to illegal property transactions and false claims on property ownership, resulting in many legal disputes and several bonafide property investors across the country being duped. Producing fake property/title documents is also a common method used by fraudsters to deceive banks/HFCs into providing property loans on illegally acquired/non-existent property, or to get multiple financing on the same property.

The risks associated with such counterfeit title deed documents are significant and have direct implications on the property transaction eco-system in the country, and in securing the ownership rights of bonafide property owners. Document security and integrity is absolutely essential for the effective governance of property transactions and to uphold the sanctity of the registered document as an authentic “proof of ownership”.

This paper outlines how Bilcare’s nonClonableTM capability can be leveraged to deliver an innovative “Document Security and Authentication” solution that comprehensively addresses these very critical issues of counterfeit title documents, property transaction frauds and resulting government revenue leakage.

  1. PROPERTY REGISTRATION: Introduction

Property Registration in India is governed by the Indian Registration Act, 1908, and the Indian Stamp Act, 1899. The state-wise Registration and Stamps Department is entrusted with the responsibility of administering these acts through collection of the Registration Fee and Stamp

Duty (as stipulated in the state-wise Stamp Acts) and executing the sale/transfer of property/title deeds.

Property Registration provides protection of ownership rights to citizens, at the same time as constituting a major revenue stream for state governments.

(A) State Revenue Earner

The Registration and Stamps Department is typically one of the top 2 or 3 revenue earners for any state

Property Registration constitutes nearly 70–80% of revenues for any state government‟s Registration and Stamps Department

With Property sales booming in many Tier 1 and Tier 2 cities across India, the collection of Registration charges and Stamp Duty is growing exponentially both in terms of volume and value.

(B) Legal Ownership Rights

Provides the owner of the property with legal sanctity of the purchase transaction on the property he/she owns

A registered property is the only document that is accepted as “proof of transfer of ownership” in Indian Court of Law in the event of property-related disputes

Accepted by banks as a required collateral to sanction home loans or mortgages or cash credits

A registered property document serves as validation for the buyer that the seller genuinely owns the property in question.

Thus, registration of a property becomes the most important legal formality of any property transaction and any non-compliance with this process (avoidance of registration and evasion of stamp duty) and/or falsification of documents/information while executing the transaction (fake stamp instruments, falsification of property details/ownership) results in violation of the Registration and Stamp Acts and is a potentially punishable offence according to law.

  1. FAKE PROPERTY DOCUMENTS: Reasons for property transaction fraud

The process of registration of a sale/transfer deed has in itself legal sanctity that assigns new ownership of the property to the buyer. However, the lack of authentic property related documents that are used in otherwise legally valid registration transactions, has given rise to fraud in property transactions.

There are frequent false claims of ownership involving the use of fake/forged property documents to illegally occupy properties and execute transfer/sale transactions with gullible buyers. Says Rajiv Rai, Vice President – Corporate at Assotech, “Anyone who wants to enter into an immovable property transaction is expected to investigate its title themselves. If one unknowingly buys a defective title, the only remedy is litigation as no guarantee is offered by the state.” ReadMore

 

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