NEW DELHI: Noting systemic flaws in colonial-era property laws, the Supreme Court on Friday called for a nationwide reform by asking the Law Commission to prepare a comprehensive report and examine the use of Blockchain technology to restructure the property registration process.Blockchain technology creates a secure, transparent and immutable digital ledger for all real estate transactions, making it tamper-proof and reducing fraud. It also provides a single, verifiable source of truth for ownership history, making it easier and faster for buyers to verify a property’s title and for the system to process transactions through smart contracts.
The direction was issued in a landmark judgment by a bench comprising Justices Pamidighantam Sri Narasimha and Joymalya Bagchi, which dismissed the 2019 Bihar Amendment, which allowed the registering authorities to refuse registration of sale or gift deeds without proof of mutation or ‘jamabandi’ assignment.“The constitutionally protected right to own real estate inherently includes the freedom to freely acquire, own and dispose of it as one sees fit. The efficiency and transparency with which real estate is bought and sold is an example of a country’s institutional maturity and a testament to the confidence its citizens have in the integrity of its legal and transactional framework,” said Judge Narasimha, who wrote the 32-page judgment.
The judgment referred to the “long-standing dichotomy between registration and ownership” in property laws, saying “the time has come to evolve towards a system in which the sale and purchase of real estate becomes easier, and registration serves as conclusive proof of ownership, guaranteed by the state.”
On dichotomy, it said that the Registration Act mandates the registration of documents, not titles, and this distinction is the cornerstone of our country’s presumptive title system.
“Since this presumption is rebuttable in a court of law, there is a significant burden on the potential buyer, who must undertake a diligent investigation into title. There is no doubt that this uncertainty has been unsettling for those seeking to purchase real estate,” the report said, adding that real estate disputes account for nearly 66 percent of all civil lawsuits.
Noting that the existing laws, the Transfer of Property Act, the Stamp Act and the Registration Act, reflect colonial-era constructs, the judgment noted that the country continues to operate under a system of ‘presumptive titles’, where registration serves as evidence of a transaction but not conclusive evidence of ownership.
It emphasized the need to move towards a “decisive system of property rights, guaranteed by the state”, which would simplify real estate transactions and reduce the number of lawsuits.
In a way, it suggested that the Center explore the use of Blockchain technology to create a tamper-proof, transparent and unified digital land registration system.
It noted that Blockchain’s immutability and traceability could help prevent fraudulent and multiple registrations and ensure public confidence in ownership frameworks by maintaining verifiable, time-stamped records of ownership transfers, encumbrances and cadastral maps.
“Blockchain technology could address the structural fragility of India’s registration system,” the report said, adding that the technology could integrate cadastral maps, survey data and revenue records into a single, publicly accessible framework.
The judgment said the legal panel should include existing legislation to recommend a regulatory and technological framework for the integration of Blockchain into land registration.
The impugned Bihar rules gave registration officers the power to refuse registration of sale or grant deeds unless the seller could produce proof of ‘jamabandi’ or assignment, registrations of land mutations under the Bihar Land Mutation Act, 2011.
The judgment held that these requirements were arbitrary, unreasonable and impossible to fulfill as the mutation and land survey processes in Bihar remain incomplete.
The evidence shows that 80 percent of the ‘jamabandis’ in Bihar are registered in the names of ancestors, many of whom are long dead, making compliance practically unworkable.
“The process of mutation and examination is far from complete. Linking registration with jamabandi or possession of allotment would illegally hamper the right to buy and sell property and effectively deprive citizens of property,” the report said.
The judgment came on a plea filed by a person named Samiullah, represented by advocate Athenam Velan, against a Patna High Court ruling that refused to quash the 2019 rules that allowed registration authorities to refuse registration of sale or gift deeds without proof of mutation.
The judgment reiterated the well-established principle that mutation does not confer ownership but merely serves as an input for tax purposes.
It emphasized that the assessment of property titles falls under the jurisdiction of the civil courts, and not of the registration officers, and therefore, by making registration dependent on the mutation certification, “registration offices are turning into title tribunals”, contrary to the intent of the Registration Act.
Apart from the judgment of the Patna High Court which had upheld the Bihar Amendment of 2019, the appeal was allowed and the notification dated October 10, 2019 was quashed.
“We are of the view that the requirement of mentioning and producing jamabandi allotment or maintaining allotment as a condition for registration of a lawfully presented document under sub-rules (xvii) and (xviii) of Rule 19 is arbitrary and illegal and as such is liable to be set aside,” the report said. PTI
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