Check for ‘irritants' in encumbrance certificate

K. Srinivas Reddy
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The carelessness with which documents are issued without incorporating all the details pertaining to a particular property is turning out to be a nightmarish experience for citizens, writes K. Srinivas Reddy

GOING ONLINE:A document scanned by an official of the Registration Department in Coimbatore.
GOING ONLINE:A document scanned by an official of the Registration Department in Coimbatore.

Lives depend on property documents. If there is one thing everyone would take extra precaution to preserve and protect, that would be documents pertaining to properties. Based on these documents, transactions are made and lifetime investments are made.

And if such an importance is given by the citizen to these documents, shouldn't the government agency that issues these documents be careful with them?

The answer would be in the affirmative, but in certain cases, the carelessness with which the documents are issued without incorporating all the details pertaining to a particular property is turning out to be a nightmarish experience for citizens.

While everyone would understand the possibility of an error creeping in while preparing a document, such an error of excluding some details about a property transaction while issuing an encumbrance certificate is inexcusable. More so when such erroneous certificates could lead to litigation, not to speak of heavy investments made based on such certificates issued by the Department of Stamps and Registration.

Take the case of this city builder, who bought a piece of land in Osmania University Teachers' Colony near Kapra. He paid the money to the land owner and got the plot registered on his name after he procured an encumbrance certificate from the Sub-Registrar's Office (SRO) concerned. It was only after he began construction work on the piece of land, another person approached him claiming that he was the rightful owner. A quick verification of documents showed that he also had genuine registration documents. It was a case of double registration.

But in this case, the question was how the SRO issued an encumbrance certificate with incomplete details of the transaction. The other peculiarity was that the city builder got the land registered on his name in the same SRO. With all the claims of computerisation of land records, the officials should have found out and refused to register the land as the seller was a different person.

This latest experience of the city builder speaks volumes about the hollowness of Government claims about complete computerisation of land records. Here is what had happened in this transaction.

The piece of land in OU Teachers Colony was bought by a person in 1983 and after his death, his wife gifted it to his son - person ‘A' in 1993. The gift deed was duly registered in the SRO. Subsequently, for inexplicable reasons, the woman sold the same piece of land to person ‘B' in 1999. Person ‘B' had indeed obtained an encumbrance certificate before finalising the transaction and this encumbrance certificate had only showed that the land was bought in 1983 from OU Teachers Colony Society.

It did not mention the fact that the piece of land was given away through a gift deed already to person ‘A'. Person ‘B' went ahead with the transaction and got it registered in the same SRO again.

Person ‘A' continued to believe that he was the rightful owner till 2012 and wanted to sell the plot to the city builder. The city builder obtained an encumbrance certificate from the SRO, which had only mentioned about the plot being given away to Person ‘A' through the gift deed in 1993. Interestingly, it had not mentioned anything about the plot being registered to person ‘B' in 1999.

Believing in the infallibility of the encumbrance certificate, the city builder paid money and got the plot registered again in the same SRO. Strangely, the computerised network did not reject the registration this time too.

Things began happening when the builder started the construction activity on the site.

Person ‘B' approached him and then a quick verification of documents held by him proved that they too were genuine.

It was only sometime later it became clear that when person ‘B' bought it in 1999, the encumbrance certificate he got did not mention anything about the land being given away in gift deed to Person ‘A' in 1993. Similarly, when the city builder obtained encumbrance certificate in 2012, it did not contain the details of it being registered in 1999. It had only shown the gift deed entry in 1993.

The complicated issue was sorted out to some extent, because of the generous nature of person ‘A', who readily agreed to return the money to the builder. But the question remained unanswered as to how could the SRO issue a certificate which did not contain all the details?

And now the issue is whether the government would return the stamp duty paid to the Government for the registration which was done in good faith, based on the faulty encumbrance certificate issued by the SRO?



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