Tamil Nadu attempts to tackle scams in land registration

The State government hopes that a new amendment to the Registration Act will curb corruption.

People waiting outside the Registration Office at Mahal in Madurai. | Photo Credit: MOORTHY G

In July 2022, a major registration scam was unearthed in Tamil Nadu, in which around 60 officers were found to have been involved in the registration of 6,892 acres of land, all of which were in violation of an order from a Supreme Court-appointed panel that had barred the registration of these specific assets.

A total of 237 sale deed registrations, pertaining to 5,300 acres of land, were carried out illegally in 38 Sub-Registrar offices across the State. Nine officers were suspended in the action that followed the discovery.

Such fake document registration has been rampant in Tamil Nadu after the sweeping real estate boom it experienced a few decades ago. The Inspector General of Registration has periodically issued circulars and advisories in an attempt to insulate the process from malpractices associated with title deeds, guideline values, encumbrance certificates, and revenue records such as mother documents, pattas, and chittas.

Despite these measures, however, the State has not been able to curb the scams, due mainly to the complex nature of land distribution and ownership patterns spanning many decades. And due to rampant corruption in these departments.

Many loopholes

A senior officer told Frontline that digitisation had indeed minimised the volume of corruption, but people continued to find loopholes in the system. Unscrupulous elements could exploit the absence of a fool-proof verification mechanism in the registration process. Registration offices soon emerged as major centres of corruption in the State.

Finally, the Tamil Nadu government decided to amend the Registration Act,1908 (Central Act XVI of 1908). It had sent the Bill for presidential assent a year ago, after the Tamil Nadu Assembly passed it in September 2021. It recently received President Droupadi Murmu’s go-ahead, making the amendment law.

The statement of objects of the Bill on amendments specifically notes that despite the government’s efforts, fraudulent registrations through forged sale deeds are being done regularly. This is despite the fact that the Registration Department issued a rule mandating the affixation of a scanned copy of photos of either the document writer or the advocate representing the stakeholders on the last page of the document to prevent impersonation. The fake transfers have continued unabated.

As recently as March this year, it came to light that a piece of land belonging to the Meenakshi Sundareswarar Temple in Madurai was registered with forged documents and under fictitious names to a private owner.

A judicial intervention by the Madras High Court, made after a spate of petitions against forged registrations, set the tone for this major amendment to the registration law. The Madras High Court had then asked the government to give statutory accordance to circulars and advisories issued by the Inspector General of Registration regarding registrations and had, in fact, mooted the idea of forming a quasi-judicial appellate tribunal on such transactions.

When the State Minister for Commercial Taxes and Registration, P. Moorthy, tabled the Bill on amendments to the Registration Act, 1908, Tamil Nadu Finance Minister P.T.R. Palanivel Rajan told the Assembly that the government had identified thousands of fake land registrations that needed to be cancelled with retrospective effect. He said that the State exchequer stood to lose heavily due to these forged transactions. The amendments, he hoped, would set the system right.

Nature of amendment

The amended legislation, which is applicable only to Tamil Nadu and is hailed as a game changer, now empowers the State government’s Department of Registration to cancel the registration of properties if they are found to have been forged or faked or if signatories have been impersonated.

Sections 77-A and 77-B of the amended legislation authorises the Registrar to first issue a show-cause notice to those suspected of malpractice asking them why the registration should not be cancelled.

If the Registrar is not convinced with the replies, he is authorised to cancel the registration. Section 77-B of the amended Act allows the aggrieved to approach the Inspector-General of Registration within 30 days of cancellation to get any grievances redressed.

The amended Act says that if anyone, including government officers, registers documents in violation of norms, they shall be “punishable with imprisonment for a term which may be extended to three years, or with fine or with both”. Besides, transactions prohibited by any Central or State Act cannot be registered.

Prior to these amendments, the Registration Act did not empower the registering officer or any other authority to cancel the registration of documents, even if it was prima facie established that the registration was executed with mala fide intentions of fraud, impersonation and so on. This caused grave hardship to the general public, especially genuine sellers and buyers at large.

Once registered, land fraud victims had no option but to take legal recourse in civil courts, which in turn caused not only inordinate delays but also opened them up to other difficulties.

The present government believes that the amendment will discourage fraud to a great extent by not forcing victims to go to court but by cancelling fake registrations immediately. The government has also set up a special investigation team to probe land deal irregularities, besides forming a high-level committee to restructure the guideline value of properties as and when required.

Meanwhile, however, an advocate has approached the Madras High Court with a public interest litigation against the State’s amendment to the Registration Act. The advocate, T. Arockia Dass, told Frontline that the amended Act would only increase the harassment of genuine buyers and sellers by bureaucrats and politicians involved in the real estate sector.

“The State has no right to bring in amendments to the parent Act. It is ultra vires the Constitution. In fact, as per the parent Act of 1908, the registration authority has no power to re-look at the registration once the process is complete. The aggrieved have to go to court to get their grievances redressed. The judiciary alone can decide the genuineness and validity of documents and parties. These amendments infringe upon the domain of the judiciary,” he said.

Arockia Dass further said that arming bureaucrats with such “unbridled powers” would cause further injustices. “Bureaucrats can form a cartel along with politicians and landsharks to loot the general public. It would lead to intimidation and blackmail whenever high value transactions take place. In fact, many judgments both in the Supreme Court and in the High Courts have emphasised that once the document is registered, the responsibility and duty of the registration authorities become functus officio,” he said.

The Madras High Court has sought the State government’s response to Dass’s affidavit.

Despite these issues, the Tamil Nadu exchequer has seen revenue from registrations record a robust increase. According to a policy note from the department, the number of properties registered has increased from 26,95,650 in 2020-21 to 29,98,048 in 2021-22. Registration revenue has shot up to Rs.13,913.65 crore in 2022, from Rs.10,643.08 the previous year. According to an officer in the department, the present reforms will show results shortly.

The Crux

• Fake document registration is rampant in Tamil Nadu after the sweeping real estate boom.
• In July 2022, a major registration scam was unearthed in Tamil Nadu, in which around 60 registration officers were found to have been involved.
• In order to curb this, the Tamil Nadu government has amended the Registration Act,1908 (Central Act XVI of 1908).
• The amended legislation, which is applicable only to Tamil Nadu, now empowers the State government’s Department of Registration to cancel the registration of properties if they are found to have been forged or faked or if signatories have been impersonated.