Sunday Times 2
eLand Registry, digitalisation and Bim Saviya: Beware of pitfalls
Significant reforms are under way to computerise the data in land registries and deeds. This article is intended as a guide to those urgently needed reforms that would improve the laws (biometric methods) that identify owners and the laws that secure the records of the identity of owners, thus reducing, if not preventing, forged documents from entering the e-register.
By Kirthimala Gunasekera and Ann Dedigama
We have discussed this topic referring to the World Bank reports, the discussions at the meetings of a committee appointed by the Ministry of Justice for the Implementation of Bim Saviya and the Prevention of Land Fraud, the Australian experience of eLand Registration and the experience we gained working with Justice A.R.B. Amerasinghe.
According to media reports, the digitalisation effort is largely aimed at detecting and preventing fraud and improving data analysis while streamlining the processes in the Land Ministry.
The new law and the eLand Register
We have also read the ‘terms of reference for the eLand Registry’. We find that the Bim Saviya programme will go hand in hand with the digitalisation programme which is a revolutionary step towards changing Sri Lanka’s property law and introducing a new law internationally known as the Torrens Law which originated in Australia.
The Bim Saviya Act (Act 21 of 1998) has codified the Property Law and removed the judicial powers to enquire into land disputes. Under Section 33 of the Act, the registration of title in a register becomes a powerful tool. Once registered, the ownership is considered to be ‘INDEFEASIBLE’. The law of indefeasibility in essence means that irrespective of the validity of the land transactions, whether forged or otherwise, the registered owner acquires title to land, and the ownership acquired by registration is not questionable in a court of law. The real owner may be denied of the ownership of the land and will have no recourse to a court of law. He would have to surrender ownership to the fraudster whose name is recorded in the eLand register. The digitalisation, therefore, will be extremely significant to land owners as they will have limited access to court to resolve land disputes especially when land is affected by fraud.
What will be the remedy for land owner affected by land fraud under the new law?
The Bim Saviya Act 21 provides a new method of insurance through an ‘Assurance Fund’ and the owners will be paid compensation to the value of the land from the fund. Whether the statutory Assurance Fund will be able to provide compensation to land owners is a question that has to be answered.
Managing the integrity of the Bim Saviya and eLand Register depends on the validity of the notarised land contracts and the registrar’s ability to identify owners before making entries in the eLand registry.
In jurisdictions where this law is successfully applied there are modern conveyancing laws and specific laws for registrars to identify land owners to prevent forged and invalid documents from entering the register. Before land transactions are executed and registered respectively, the law requires registrars to perform quasi-judicial functions to identify land owners.
Thus managing the integrity of the eLand Register with law of ‘Indefeasibility’ under the Torrens law will be a difficult task.
In Sri Lanka, statutes governing the process of identification and verification of identification of owners had not been revised and the process operates under the old colonial statues — the Registration of Documents Ordinance of 1927 and the Notaries Ordinance of 1907. Strangely the Torrens law introduced through the Bim Saviya in 1998 is also made to operate with these outdated statutes.
World Bank’s view
The main detractive factor under the old statutes is that land transaction entries would be made in the eLand Register without any specific new laws for identifying owners. The process is completely dependent on ethical rules provided by the old statutes. [This was mentioned in the World Bank report No ICR0000190: Implementation completion and results Report of 22 March 2007. It said ‘The Government has already begun piloting title registration work under Bim Saviya which had brought out the need for new approaches, Sri Lanka however was far from ready for a full scale land titling program’]. The Bank team concluded that the weaknesses in the legal and institutional fronts would need to be resolved before consideration is given to a full land administration project. [Recently the Prime Minister’s Office requested amendments from the Ministry of Justice with regard to the Registration of Documents Ordinance of 1927.]
Given below are the main institutional weaknesses and the reforms recommended by the Committees appointed by the Ministry of Justice for the Implementations of Bim Saviya and Prevention of Land Fraud:
The deed register presently maintained under the Registration of Documents Ordinance of 1927 is the only data provider relating to the owner’s name for the Bim Saviya and the eLand Register. In spite of this obvious lacuna, the old registers remain neglected without any revision; it is an incomprehensive register where the registrar is not responsible to check on the validity of the deeds, forged or invalid. It registers all the deeds that are submitted, irrespective of their validity as provided by Section 7 of the Ordinance.
Further, the statue does not provide for compulsory registetaion of deeds and therefore it is an incomprehensive register.
Examples of fraud under the old statute:
A. An owner may execute an ‘Agreement to sell’ and remain without registering the deed. Bim Saviya will eventually take the data from the deed register to register the owner’s name ignoring the rights of the person who paid the advance under the Agreement to sell. The claimant under the agreement to sell will have no right to seek redress from court under the new law as judicial remedies are not permitted under the new law.
B.Selling land more than once. A person can sell a parcel of land more than once fraudulently; for example an owner can sell the land to A and then again to B if the sale to A is not registered. Bim Saviya will not be able to obtain the information from the deed register. This is possible under the optional registration system available under the old ordinance.
C.The Notaries Ordinance of 1907 also provides a safety net for fraudsters. Section 33 states that deeds executed by notaries are valid for registration even if the rules are not observed by notaries. The future changes to the domain in the eLand Register and the Bim Saviya are made by Notarial documents executed under the Notaries Ordinance.
A disturbing fact pointed out in the World Bank statement with regard to land titling programmes is the admission that nearly all its rural titling programmes in other jurisdictions have achieved poor results. Producing satellite maps and databases had taken place but not the basics of establishing secure and useful registries that would give confidence to the users. (“A Matter of Title” – Economist, December 9, 1995) http://www.prres.net/Papers/Mills_A_Case_for_Torren’s_system_For_Title_Registration.pdf.
Dr. A.R.B. Amerasinghe’s book on Title Insurance – Improving property law without introducing the Torrens Law would be more advantageous for Sri Lanka:
The authors of this article were both pupils of Dr. A R B Amerasinghe and were fortunate to have been closely associated with him till his demise. In his book ‘Title Insurance’, the learned doctor emphasised the need for a great deal of in-depth study and research of property law to escape from our self-constructed kraal of not doing our own thinking to find solutions to our problems. He espoused the need to look beyond our borders to widen our horizons of knowledge but he said if we need to enrich our property law we need to do our own research and constantly revise our laws. When discussing the subject of property rights with him, he would often point out that foreign laws were introduced to developing countries as a prototype on a ‘one-size-fits-for-all’ basis. According to him, ‘Land title’ reform and the process of stabilising ownership of land are for us to mould and develop’. This was his idea that was put forward when the World Bank recommended the Australian property Law – the Torrens system in the 1968, presently introduced as Bim Saviya — as a possible solution to the problems connected with defective titles in Sri Lanka. With his profound arguments, he prevented the Torrens law from being introduced to Sri Lanka. As he had correctly pointed out in his book it violated the fundamental rights of a land owner. His research will be important to those who are genuinely attempting to effectively administer Bim Saviya and the eLand Register.
(Kirthimala Gunasekera is an Attorney-at-Law and Ann Dedigama is a Solicitor in Australia.)