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Key Takeaways

  • A person’s property is important for the owner and it is common that one would like to protect their property.
  • The transfer of property happens in various ways and the registration is done to ensure that the property is safe.
  • After that, mutation is required so that the revenue can be collected and from the right person.
  • Though it is a state list subject, there are a general set of steps to be taken for mutation.
  • This article discusses the process and need of mutation along with the legal position on the same.

Introduction

Land is a state subject, and each state keeps track of real estate transactions. These documents serve as proof of ownership, allowing ordinary people to protect their property assets. Because all information pertaining to land records is recorded, the potential for property-related fraud is reduced. The records show who owns a particular piece of property and what encumbrances it has. To avoid fraudsters, all buyers and investors need to do is examine these records. When a buyer completes the land-purchase process, it is his or her obligation to ensure that the new information is recorded in the revenue records. Land and property mutation also aid the state in resolving its property tax debt. Since property is something that a person cherishes, it is indeed important to ensure that any kind of fraud is avoided and it is properly protected.

Mutation

After a property is registered in the buyer's name, he must go through the mutation process to ensure that the property is also recorded in the local municipal body's records under his name. The necessity to do so also arises in the event of the original owner's death, with the property title passing to another owner via inheritance or succession. The procedure for getting the new owner's name registered in the local government's records is currently known as property or land mutation.

In circumstances involving inheritance, property wills, sales, owner death, or government settlements, a change in ownership may be unavoidable. Any city or district's local municipal authority, through its revenue department, is responsible for keeping a thorough record of property ownership and transfer. It enables the authority to determine the amount of property tax due and to issue relevant tax paperwork. During the process of purchasing a home, filing for a property mutation is an important step. This is necessary so that all property tax and utility bill receipts are issued in the name of the new purchase rather than the former owner.

Property mutation is a long-term commitment. It is critical to keep track of mutation facts and to update the papers on a regular basis in order to protect the property from fraud.As of September 2017, 47% of property mutation was computerized according to the Digital India Land Records Modernization Programme which was implemented to improve the quality of land records accessible to the public.

What is the need to have mutation?

High levels of litigation: According to a 2007 World Bank research, land-related conflicts account for two-thirds of all ongoing court cases in the country. Land disputes can arise over the legitimacy of land titles and records, as well as legitimate possession. According to a NITI Aayog report, land disputes take an average of 20 years to resolve. Land issues add to the Court's workload, lock up land in litigation, and have a negative impact on sectors and projects that rely on disputed land titles.

Agricultural credit: Farmers frequently use land as collateral to get loans. Land titles that are disputed or unclear have been found to impede the flow of capital and credit for agriculture. Small and marginal farmers, who own more than half of all land but may not have legal land titles, are unable to obtain institutionalised credit. Credit to agriculture has been steadily expanding, with the banking sector frequently exceeding the government's credit disbursement targets.

Development of new infrastructure: The country's economy has shifted from agriculture to industry and services during the last few decades. This has prompted infrastructural development and a shift in land use from agriculture to commercial, industrial, and residential uses. Previously utilised for farming, land is currently being used to develop industries, power plants, manufacturing units, highways, residences, and shopping malls. The process is however delayed due to the land related issues such as monetary and legal liability, non-updationof land records, etc.

Types of Mutation

The first is agricultural land mutation, while the second is non-agricultural land modification. The first sort of mutation is critical because without it, the land title cannot be handed to the new owner. In the case of land acquisition, the government will compensate the prior owner because the government's records were not updated, and the new owner will be at a disadvantage. Failure to update the records in non-agricultural land mutations, such as independent houses, flats, and residential plots, may not revoke the rights of the new owner. The owner will not be accountable for power, water, or municipal taxes if she does not mutate.

Procedure

Land and property records are kept by local governments. That is where you must complete the mutation process. Many states have now moved the procedure online, with some even establishing dedicated systems. The owner will, however, need to travel to the municipality to finish the process. Fill out an application form with the owners’ personal information, as well as property information such as address, registration date, kind of property, and type of transfer, and submit it to the local municipal body. The local tax inspector will verify the documentation and may inspect the property once all of the appropriate documents have been presented, after which the application will be completed.

An indemnification bond is sometimes requested, stating that the executant will indemnify the municipal corporation in the event of a dispute stemming from the modification made on his application. A crude site plan depicting the various areas of the structure, together with the names of persons who occupy these areas may also be required.

The current transfer duty rate on the consideration amount, as well as the mutation charge, must be paid. If an entire building or plot has been sold, the mutation may be permitted subject to the payment of current dues. If you sell through an agreement to sell, you'll have to pay transfer duty at the current rate.

An application is to be filed first before the Tehsildar, including a non-judicial stamp, along with the following details:

  • The territory over which the right has been gained
  • Description of the acquired right
  • Name, parent's name, and residence of the person who has obtained the right
  • The manner in which the right was obtained
  • The individual who has gained the right's name, parent's name, and address
  • When did the right become yours?
  • A copy of the document on which the mutation is requested

A proclamation is made inviting objections to the proposed mutation and giving a deadline, not less than 15 days from the date of the proclamation, during which any objections will be considered. The Patwari gives his report according to the guidelines. The parties' statements are recorded. The contents of the documents are compared to the audio recordings. It is sanctioned if no objections to the proposed mutation are received. Any person who is aggrieved by a mutation ruling has 30 days to file an appeal with the Additional Collector (or Deputy Commissioner) concerned.

The following documents are to be presented considering the mutation in case of sale, will or power of attorney:

  • Sale Deed Copy
  • Death Certificate (In case of Will)
  • Copy of Will (In case of Will or Power of Attorney)
  • Certificate of Succession (In case of Will)
  • Copy of Power of Attorney (In case of Power of Attorney)
  • A Court fee stamp affixed to the application for mutation.
  • Indemnity bond on stamp paper of requisite value
  • Affidavit on stamp paper with the required amount
  • Receipt of the most recent payment of property taxes
  • Payment receipt recorded with a sub-registrar (In case of Power of Attorney)

An indemnification bond is sometimes requested, stating that the executant will indemnify the municipal corporation in the event of a dispute stemming from the modification made on his application. A crude site plan depicting the various areas of the structure, together with the names of persons who occupy these areas, might be required.The current transfer duty rate on the consideration amount, as well as the mutation charge, must be paid. If an entire building or plot has been sold, the mutation may be permitted subject to the payment of current dues. If you sell through an agreement to sell, you will have to pay transfer duty at the current rate.

What to do if the property mutation is not completed? Buyers frequently continue to postpone the process because the penalty is not particularly significant (states normally charge Rs. 25 to Rs. 100 as a penalty for delays) and they are free to get the property mutation done whenever it is convenient for them. However, it is recommended that the property mutation process be done after all other aspects of the purchase have been completed. When you plan to sell the property in the future, you'll need confirmation of the mutation. Even from the standpoint of ownership transfer, it is legally safer if a property mutation is done soon after the purchase.

Legal Position

In a series of cases, the Supreme Court has previously concluded that a land's mutation in the revenue records does not create or extinguish the title, nor does it have any presumptive value on the title. The Supreme Court's ruling in Sita Ram Bhau Patil v. Ramchandra Nago Patil (dead) by LRs and Ors has explicitly stated that there is no abstract notion that whatever appears in the record of rights would be presumed to be correct, unless the entries are demonstrated to be incorrect by proof.

The Supreme Court in Sawarni (Smt.) v. Inder Kaur stated that a property’s mutation in the revenue record does not create or destroy title, nor does it have any presumptive value on the title and only allows the person, whose mutation has been ordered to pay the land revenue in question, to do so.

Similar observations were made by the Supreme Court in Balwant Singh &Anr. v. Daulat Singh & Ors., where it was decided that a party is not deprived of his title in the suit property as a result of mutation entry. It was held in Narasamma & Ors. v. State of Karnataka & Ors. that the entries in the revenue record cannot constitute any title to the land in question.

In Smt. Bhimabai Mahadeo Kambekar v. Arthur Import and Export Company, the Supreme Court decided that mutation entries in revenue records do not create or extinguish title to land, nor do they have any presumptive value. In Suraj Bhan and Ors. v. Financial Commissioner and Ors., the Supreme Court applied the same principle. In Jattu Ram v. Hakam Singh and Ors., the Supreme Court declared that the Jamabandi entries are exclusively for fiscal purposes and do not constitute any title.

Mutation entries, it was decided in State of U.P. v. Amar Singh and Others, are purely for the purpose of allowing the State to collect land income from the person in possession, and do not convey any title to the land. An instrument executed by the owner in favour of an alienee would give rise to the title. In Jitendra Singh v. State of Madhya Pradesh, the Court based its decision on various earlier decisions, concluding that mutation entry is solely for the purpose of collecting land revenues, and that it does not confer any rights on the person, and that mutation should be sought through an appropriate court.

Conclusion

It is evident that entry in revenue records is not a document of title, and mutation does not create or extinguish title in any property, which the Apex Court has time and again reiterated in several judgments. These entries are solely for the purpose of allowing the state to collect revenue from the individual listed. They do not impart any property rights or titles. The mutation order can't be represented as a document likely to produce or extinguish title because mutation entries aren't considered papers of title. The Courts have held numerous times that the mutation entries are exclusively kept for fiscal purposes, to verify that the land revenue is paid by the person whose name is stated on the document.


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