Buying and selling property in India is ‘traumatic’, says Supreme Court

The Supreme Court, in a judgment on Friday, said that buying and selling property in India are “traumatic” experiences, noting that property disputes account for 66% of civil litigation in the country’s courts.

The court asked the Centre to take the lead in adopting Blockchain technology to make the property registration process transparent and easier across the country. It also directed the Law Commission of India to prepare a report on restructuring century-old colonial-era laws governing property transactions, including the Transfer of Property Act, 1882, the Registration Act, 1908, and the Stamp Act, 1899, to align them with modern technology.

“Property purchase has not been easy, it is not difficult to find people grudgingly telling us that it is in fact traumatic,” Justice P.S. Narasimha, who authored the judgment, said.

Justice Narasimha, sitting on the Bench with Justice Joymalya Bagchi, identified fake documentation, land encroachments, delayed verification processes, the role of “intermediaries” in property purchases, red tape at sub-registrar offices, and even the requirement of two witnesses for document verification as some of the factors delaying or hindering property transactions. Registration procedures also vary from State to State, as land is a “State subject” under the Constitution.

“The constitutionally protected right to own immovable property inherently includes the freedom to freely acquire, possess and dispose of it at will. The efficiency and transparency with which immovable property is bought and sold is demonstrative of a nation’s institutional maturity,” Justice Narasimha observed.

A major contributor to litigation and public hardship, the court said, is the “dichotomy” between ownership and registration of property under current laws.

“The registration of a document recording purchase of immovable property does not confer guaranteed title of ownership, instead it only serves as a public record of the transaction having presumptive evidentiary value, but it is never a conclusive proof of ownership,” Justice Narasimha said.

This gap between registration and ownership fuels disputes and places a heavy burden of due diligence on buyers, who must undertake a painstaking title search, sometimes covering more than 30 years, and obtain a no-encumbrance certificate to confirm the property is free from legal liabilities or mortgages.

The Supreme Court advised that Blockchain technology could help integrate the property registration system with conclusive ownership.

“Blockchain technology is said to offer an alternative paradigm by encoding land titles, ownership histories, encumbrances, and by recording transfers on a distributed ledger in an immutable and time-stamped form… This property of immutability could enhance the integrity of title records and strengthen public trust in the ownership framework,” Justice Narasimha noted.

The court observed that a Blockchain-based system could integrate cadastral maps, survey data, and revenue records into a single verifiable framework, creating a transparent audit trail accessible to departments and the public.