The Department of Land Resources in the Ministry of Rural Development has released a draft version of The Land Titling Bill, 2011 on its website. This draft is a major revision of the original draft Bill released in 2010. Public comments on this draft are invited before June 24, 2011. A copy of the draft can be found here. The Bill provides for the registration of all immovable property to establish a system of conclusive, electronically recorded titles. It also provides for a mechanism to invite objections and for the resolution of disputes through special tribunals. The property record will be considered as conclusive ownership by the person mentioned. This will help resolve uncertainties in property transactions. Given that land is a state subject, the Bill is meant to be a model law for adoption by the states individually.  The framework of the bill is explained below. I. Land Titling Authority and Preparation of Records The Bill establishes a Land Titling Authority at the State level. The Authority’s task is to prepare a record of all immovable properties in its jurisdiction. These records will contain (a) survey data of boundaries of each property; (b) a unique identification number for each property, which may be linked to a UID number; (c) any record created by an officer of the state or UT government authorised by the laws of that state to make such records; and (d) a record of Title over each property. II. Title Registration Officer and Registration Process The Bill provides for the government to create Title Registration Offices at various places, and for a Title Registration Officer (TRO) to function under the supervision of the Land Titling Authority.  The TRO will have powers of a civil court and is charged with the task of creating e a Register of Titles. Steps for the registering of titles include: (a) notification of available land records data by the TRO, (b) invitation to persons with interest in such properties to make objections to the data, and (c) registration of properties by the TRO for which no dispute is brought to his notice in writing. In the case the absoluteness of the title to a property is disputed, the TRO will make an entry into the Register of Titles to that effect and refer the case to the District Land Titling Tribunal (discussed below) III. District Land Titling Tribunal and State Land Titling Appellate Tribunal The Bill proposes to set up a District Land Titling Tribunal, consisting of one or more serving officers not below the rank of Joint Collector / Sub Divisional Magistrate of the District. The government may also establish one or more State Land Titling Appellate Tribunals, to be presided over by serving Judicial Officers in the rank of District Judge. Revisions to the orders of the State Land Titling Appellate Tribunal may be made by a Special Bench of the High Court. The Bill bars civil courts from having jurisdiction to entertain proceedings in respect to matters that the TRO, District Land Titling Tribunal, and State Land Titling Appellate Tribunal are empowered to determine. IV. Completion of Records and Notification When preparation of the Record for whole or part of a specific are is complete, it will be notified. Any person aggrieved by the notified entry in the Register of Titles may file an objection before the District Land Titling Tribunal within three years of the notification. Additionally, the person may file an application with the TRO for an entry to be made in the Register of Titles. The TRO shall do so when the application has been admitted to the Tribunal. Minor errors in the Title of Registers can be rectified through an application to the TRO. V. Register of Titles After completion of records is notified by the Authority, the Register of Titles is prepared and maintained by the Authority. For each property, the Register will include: (a) general description, map, and locational details of the immovable property; (b) descriptive data such as a unique identification number, plot number, total area, built up and vacant area, address, site area, and undivided share in the land; (c) detail of survey entry, provisional title record, conclusive title record and status, mortgage, charges, other rights and interests in the property; (d) details of transfer of the property and past transactions; and (e) disputes pertaining to the property. Entries in the Register of Titles will serve as conclusive evidence of ownership. These entries shall be maintained in electronic form, indemnified, and kept in the public domain.

The Finance Bill, 2017 is being discussed in Lok Sabha today.  Generally, the Finance Bill is passed as a Money Bill since it gives effect to tax changes proposed in the Union Budget.  A Money Bill is defined in Article 110 of the Constitution as one which only contains provisions related to taxation, borrowings by the government, or expenditure from Consolidated Fund of India.  A Money Bill only needs the approval of Lok Sabha, and is sent to Rajya Sabha for its recommendations.  It is deemed to be passed by Rajya Sabha if it does not pass the Bill within 14 calendar days.

In addition to tax changes, the Finance Bill, 2017 proposes to amend several laws such the Securities Exchange Board of India Act, 1992 and the Payment and Settlements Act, 2007 to make structural changes such as creating a payments regulator and changing the composition of the Securities Appellate Tribunal.  This week, some amendments to the Finance Bill were circulated.  We discuss the provisions of the Bill, and the proposed amendments.

Certain Tribunals to be replaced

Amendments to the Finance Bill seek to replace certain Tribunals and transfer their functions to existing Tribunals.  The rationale behind replacing these Tribunals is unclear.  For example, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) will replace the Airports Economic Regulatory Authority Appellate Tribunal.  It is unclear if TDSAT, which primarily deals with issues related to telecom disputes, will have the expertise to adjudicate matters related to the pricing of airport services.  Similarly, it is unclear if the National Company Law Appellate Tribunal, which will replace the Competition Appellate Tribunal, will have the expertise to deal with matters related to anti-competitive practices.

Terms of service of Tribunal members to be determined by central government

The amendments propose that the central government may make rules to provide for the terms of service including appointments, term of office, salaries and allowances, and removal for Chairpersons and other members of Tribunals, Appellate Tribunals and other authorities.  The amendments also cap the age of retirement for Chairpersons and Vice-Chairpersons.  Currently, these terms are specified in the laws establishing these Tribunals.

One may argue that allowing the government to determine the appointment, reappointment and removal of members could affect the independent functioning of the Tribunals.  There could be conflict of interest if the government were to be a litigant before a Tribunal as well as determine the appointment of its members and presiding officers.

The Supreme Court in 2014, while examining a case related to the National Tax Tribunal, had held that Appellate Tribunals have similar powers and functions as that of High Courts, and hence matters related to their members’ appointment and reappointment must be free from executive involvement.[i]  The list of Tribunals under this amendment includes several Tribunals before which the central government could be a party to disputes, such as those related to income tax, railways, administrative matters, and the armed forces Tribunal.

Note that a Bill to establish uniform conditions of service for the chairpersons and members of some Tribunals has been pending in Parliament since 2014.

Inclusion of technical members in the Securities Appellate Tribunal 

The composition of the Securities Appellate Tribunal established under the SEBI Act is being changed by the Finance Bill.  Currently, the Tribunal consists of a Presiding Officer and two other members appointed by the central government.  This composition is to be changed to: a Presiding Officer, and a number of judicial and technical members, as notified by the central government.

Creation of a Payments Regulatory Board

Recently, the Ratan Watal Committee under the Finance Ministry had recommended creating a statutory Payments Regulatory Board to oversee the payments systems in light of increase in digital payments.  The Finance Bill, 2017 seeks to give effect to this recommendation by creating a Payments Regulatory Board chaired by the RBI Governor and including members nominated by the central government.  This Board will replace the existing Board for Regulation and Supervision of Payment and Settlement Systems.

Political funding

The Finance Bill, 2017 proposes to make changes related to how donations may be made to political parties, and maintaining the anonymity of donors.

Currently, for donations below Rs 20,000, details of donors do not have to be disclosed by political parties.  Further, there are no restrictions on the amount of cash donations that may be received by political parties from a person.  The Finance Bill has proposed to set this limit at Rs 2,000.  The Bill also introduces a new mode of donating to political parties, i.e. through electoral bonds.  These bonds will be issued by banks, which may be bought through cheque or electronic means.  The only difference between cheque payment (above Rs 20,000) and electoral bonds may be that the identity of the donor will be anonymous in the case of electoral bonds.

Regarding donations by companies to political parties, the proposed amendments to the Finance Bill remove the: (i) existing limit of contributions that a company may make to political parties which currently is 7.5% of net profit of the last three financial years, (ii) requirement of a company to disclose the name of the parties to which a contribution has been made.  In addition, the Bill also proposes that contributions to parties will have to be made only through a cheque, bank draft, electronic means, or any other instrument notified by the central government.

Aadhaar mandatory for PAN and Income Tax

Amendments to the Finance Bill, 2017 make it mandatory for every person to quote their Aadhaar number after July 1, 2017 when: (i) applying for a Permanent Account Number (PAN), or (ii) filing their Income Tax returns.  Persons who do not have an Aadhaar will be required to quote their Aadhaar enrolment number indicating that an application to obtain Aadhaar has been filed.

Every person holding a PAN on July 1, 2017 will be required to provide the authorities with his Aadhaar number by a date and in a manner notified by the central government.  Failure to provide this number would result in the PAN being invalidated.

The Finance Bill, 2017 is making structural changes to some laws.  Parliamentary committees allow for a forum for detailed scrutiny, deliberations and public consultation on proposed laws.  The opportunity to build rigour into the law-making process is lost if such legislative changes are not examined by committees

[i] Madras Bar Association vs. Union of India, Transfer Case No. 150 of 2006, Supreme Court of India, September 25, 2014 (para 89).