Longest Land Law is Outdated
The Transfer of Property Act of 1882 is the oldest and one of the longest laws on Lands in India. This law has more British Manners than Indian Smartness & Speed.
This law has little relevance for reasons below.
[For the rest of the Article the term Top-Law will mean The Transfer of Property Act 1882].
Top-Law does not define Immovable Property.
It still has a vague British definition. Had the legislation clearly defined Immovable Property, it would have saved the time of the Judges. The Judges had to work hard and provide numerous interpretations to this vague definition of Immovable Property. This vagueness was used to define many things as immovable property and claim the benefits available to Land.
Two-Witness-Rule:
Top-Law wants every document to be credited by 2 witnesses, who generally may know nothing about the document. Even for registered documents this rule is blindly followed. For registered documents, where the biometrics of the parties to a document are recorded, the signatures of the Witnesses adds no extra value, to the transaction. To delay in judicial proceedings, these 2 witnesses can be called to the Courts and Judicial Proceedings can be dragged by 1 to 4 years, based on the court-craft of a cross-examining lawyer.
Section 5 restricts
transfers between legal-persons only. In recent times, humans are building trusts and NGOs to protect animals, environment, deities, etc. and the beneficiaries of these trusts are not humans. Top-Law prohibits these transactions but other laws enable such transactions and they continue to happen. If mankind wants such transactions, then a law needs to enable them and provide a legal frame work, than simply prohibit them.
Section 6 of the Top-Law
defines some properties that cannot be transferred. Some of the rights covered under this section include the chance of an heir-apparent succeeding to an estate, easement, right to future maintenance, right to sue. (Oops most of these are not even immovable properties.) Legal Drafting of the human race has outgrown the wisdom of many law-makers and section 6 has become an outdated law today. Smart lawyers know how to transfer them, with skilful drafting, diligence and by doing some legal activities or adopting some other technologies. Human Race has outsmarted this section.
Personal Agreements are empowered to over-write
many sections of Top-Law: Section 110, 116, etc. use the words "in the absence of an Agreement to the Contrary" and this empowers the parties to over-write a law, just by signing an Agreement. Section 8 begins with "Operation of transfer- Unless a different intention is expressed or necessarily implied...". I really wonder, how can a law (for 130 crore Indians) invite unwanted confusion? A law has no purpose, if the parties can over-write a law, by executing documents in a coffee shop. The intrinsic quality of a law is that it cannot be changed by private agreements.
Smarter speculator is more protected than
the bigger investor: The Tenant is generally the darling of all politicians for the last 300 years and this attitude of over-favouring the tenants (who just vote on time) robs landlords who have invested lot to time and money on the property. A tenant is empowered to criminally default on the rent till a suit is filed and then just pay the rents in the court and have the suit dismissed as per Section 114.
Outdated Transactions:
This Top-Law regulates many transactions, that have become outdated in the last 70 years. This law defines 5 types of Mortgages. Never in my life, did I see the borrower and lender choosing 1 out of the 5 types of Mortgages stated in the Top-Law. Indians have outgrown these 5 stereo-type mortgages. British Law makers under-estimated us. As I know, the borrower and lender decide a mortgage based on 4 terms:
- the Sum lent and the rate of interest
- the Security offered and the control over the security offered.
- the payment terms and the recovery procedure.
- Extra Judicial documents exchanged
Many times to secure a Mortgage, the deal is not even called a Mortgage.
When the Top Law was enacted, the human-population was small and Land was abundantly available. So it has made laws for land transactions that can go on for years. But currently Land supply has not changed but the population has multiplied, so most land transfers are settled off much faster ie. in a couple of months or quarters.
The Top Law does not provide any additional safety for developers and for investors of Large Townships that have multiple amenities and where there are recurring costs to maintain those amenities. Sadly all these recurring costs are dumped on the end-user, who does not even choose or does not even enjoy those amenities. This law has no guide lines to customise itself for such complex land developments that will have different current and future stake holders.
Completely dependent on the Civil Procedure Code for its enforcement:-
Top-Law lays no procedure to stop its violation and compensate the victim at the earliest. It is completely dependent on the finding of a judge under the Civil Procedure Code of 1908, which is another outdated law and the judicial-authorities under that law are over-burdened with about 35 lakh pending cases. This factor repels many investors on the lands of India. Indian Real Estate has out grown Top-Law and people of India have innovated many more deals like JDA and Zero-Rent Leases to manage their needs. For a law to live longer, it has to define time-tested scales and formulas to reward its investors and fully repay the losses of its victims. Its strange, the British who used the concepts like Net Present Value, Future Value, Internal Rate of Return, inflation and depreciation in their accounting books, did not add these concepts into this Law. At least Indians need to add them in our Land laws.
Land Revenue Authorities are free to violate this Law
and they only follow their local laws and department guidelines. Top-Law being a Central Statute has no machinery to enforce itself. Even to enforce its basic tenets Writ Petitions need to be filed in the High Court and one has to hope that the Single Bench of the High Court will understand that petition well on that day. The burden of this Law is more on the masses than on the administrative bodies.
Top-Law does NOT define a Marketable Title
to a land or Structure: Many Financing Entities have no option but to rely on the opinion of the Lawyers. Opinions of Lawyers on title are based on documents provided to them and on the intentions to consult them. Opinions also depend on Legal Concepts trusted by a lawyer. Some lawyers understand that a fact cannot be changed by a hundred laws and rely on a fact, than an outdated law. Some lawyers stick to laws that have no procedures, no resources or no authorities for enforcement, just because the law looks very attractive on Paper. They are sure that some Judicial Officer will uphold their opinion someday. A piece of Land that has 2 contradictory opinions, from 2 popular lawyers gets discounted badly in the Market.
The RERA Law was enacted to compliment the Top Law. Many potential first-time apartment buyers became victims of unethical builders. The RERA law was enacted to protect such victims. I also have my free course on RERA Law on my youtube channel. But as I read about RERA law, I find that it was mostly proposed, drafted and finalised by lawyers and not the victims who knew the ground reality. I find that RERA law does not empower the victims but empowers the authorities under it. RERA fixes the statutory fees to be paid to the Authorities, when a project is to be registered. RERA also fixes the stiff penalty a defaulter has to pay to the Authorities under RERA. But RERA law does not even fix the compensation its victims have to get under the law and the time-frame under which the compensation has to be paid off. So I think RERA confirms that cash will flow to the authorities, but leaves the victims unattended on a Taarikh-pe-Taarikh mode. [I mean it leaves them with only dates of judicial hearings.] Finally I wonder who are the beneficiaries of the RERA Law? RERA compliances are only increasing the cost of home-buyers without guaranteeing any confirmed protection to them.
India needs an effective law that will enable its large population to use its huge land-reserves, in a sustainable manner. Currently there are too many laws on Lands and we need a single consolidated law across India, to enable Land investments to move freely into India. Many Lands fail to get their fair market value from Investors and the owners holding the lands miss their rightful prosperity. I think the new law of the land, has to make land investment as simple and secure as buying cryptocurrency. This can attract more investors and the poor land-owners of India can get the best returns on their lands. These land owners got paltry returns for holding lands for decades. Whereas brokers and politicians who speculated on land comfortably multiply their investments in just 5 or 10 years.
The topic of the Article ends here. A piece of (un-proven) wisdom that can address this problem is shared in the following paragraphs.
(My Personal View is) During the Victorian Era, the British ruled most parts of the world. 99% of the world population was illiterate, crowd-driven and culture-driven. To dominate and control all its colonies, and to ratify and legalise all the inhuman acts of its officers, British rulers needed a favourable law and a skewed judiciary. In simple words, it wanted a Legislature that could make any law, an executive that could enforce any law and a judiciary that would silently support this inhumanity. In more simple words, the British Lords wanted dominating laws and an impotent judiciary to hold and control its colonies. Most British-classic books of Black, Salmond, Hart, etc., on Jurisprudence has a very beautiful language, a very intoxicating style and many confusions that is visible in many of their laws. Its most funny that many lawyers cannot even think of any Legal System that is not British!! They want only British. They quote and refer views of the British Privy Council even today. The more funny part is coming in the next para.
Almost all colonies of the British like India, Singapore, China, African Countries, America, etc. fought bloody wars for centuries to escape the British Domination and the British Rule, or what they called the British Slavery. The common men who shed their blood, went to prison and sacrificed their lives were convinced that their children will be Independent and free from any form of dominating slavery. Now what happened when British Rule ended? Firstly most of these countries, including India adopted the same British Laws, because they did not invest in framing new liberal laws, as they had promised to their people before getting Independence. So the masses got betrayed massively. Secondly all the authority and freedom which had to be returned to the People, was never returned, and the authority was actually distributed among the 3 wings of the Administration [Legislature, Executive and Judiciary]. So the people who got freedom from the British, got enslaved to new administration, under the same old British Laws. Sadly centuries of war and struggle for Human Rights and Human Freedom gained very little for human-race. Thirdly drafting of New Laws is left to Legislators who were never victims of Bad Laws. To enjoy the vast lands of this Nation, the people have to rely on their due diligence more than the force of the laws. More than the ballot box, People's focus on their wallet can save their future.
Fourthly Due Diligence comes naturally if people know the basics of finance very well. They need to understand the concepts of Finance like Time Value of Money, Future Value, Present Value and Internal Rate of Return. Once upon a time these calculations were very tricky, but today a spreadsheet tool like Excel has made it very simple and can be downloaded on most mobiles. A simple exercise most people can do is find the Present Value of all taxes they paid to Central and State Governments and Local Bodies in the last 20 years. Next they can find the Future Value of all taxes they will pay to the Central and State Government and Local Bodies in the next 20 years. These 2 numbers can make a normal person restless and shrewd enough to plan his future. This 45min exercise is worth its time.