Analyzing Fictitious NOCs in Real Estate: Dera Bassi Case, Registration Act, IPC Consequences, and Judicial Precedents, Emphasizing Accountability in Indian Property Transactions.

Housing Society Law

Posted by Aditya Pratap Law Offices on 01 Mar 24

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The recent incident in Dera Bassi where an estimated 175 properties were registered with fake No Objection Certificates (NOC’s) is the latest in a spate of similar cases. As of this date, four of the culprits have been arrested. Upon the Executive Officer of the district summoning all the property registrations issued in 2023, around 175 were found to be on the basis of fake NOC’s.

A NOC is a document that lists specific details about a property and can be issued by banks, local governments, government agencies, or even private citizens. A NOC is proof that the NOC provider won’t run into any legal problems if the transaction closes in real estate transactions. Getting a NOC is now a requirement for land registration and property transfers because it enables the government to keep an eye on the growth of unauthorized colonies. Transferring land or developing a colony requires obtaining NOCs from the appropriate departments.

Provisions of the Act dealing with NOC?

Section 17 of the Registration Act, of 1908— specifies the documents required to be registered for immovable property. This includes instruments of gift, instruments that create, declare, assign, limit, or extinguish rights, titles, or interests in immovable property, leases, and instruments transferring or assigning decrees or orders of the court. Sub-section (1-A) provides that agreements for sale used to claim protection under Section 53-A of the Transfer of Property Act, 1882 must be registered. Sub-section (2) excludes certain transactions under clauses (b) and (c) of sub-section (1) of Section 17, which apply to agreements for sale entered into after 24-9-2001. This ensures that all immovable property transactions are registered and compliant with the Registration Act.

Section 21 of the Registration Act of 1908 lays down the provision for description of property and maps or plans. The words No Objection certificate are not explicitly mentioned in the provision however it provides a need for a non-testamentary document during the registration of a property containing material sufficient to identify the property in question.

The timeline for registration is given by section 23 of the act which states that No document other than those listed in section 23 of this Act may be registered unless they are submitted within four months of the date of execution. The document must be provided for registration and re-registration within four months of the date of each execution if it has been signed by multiple people at various periods.

Section 28 of the Registration Act outlines the location for registering land-related documents. All documents pertaining to immovable property as specified in Section 17 sub-section (1) clauses (a), (b), (c), (d), (f), and (g) as well as Section 18 clauses (a), (b), and (cc) must be submitted for registration to the office of a Sub-Registrar, whose sub-district includes all or a portion of the property to which the document relates.

The presentation of documents by an individual for registration is covered in Section 32 of the Registration Act, 1908. With a few exceptions, each document that needs to be registered under the Act’s provisions must be presented at the appropriate registration office by either the individual requiring registration (a) or the representative or agent of that person who has been duly authorized in accordance with Section 33 of the Registration Act, 1908, whichever applies.

Suraj Lamp and Industries Private Limited v. State of Haryana and Anr. (2009 SCC OnLine SC 1165), clarified the purpose of laying down the Registration Act and the importance of registering the documents therein mentioned. The Court stated that the act was enacted with the intention of providing orderliness, discipline and public notice to transactions relating to immovable property and protection from fraud, forgery of documents of transfer. It lists the liabilities, if any on the property and the other relevant information.  It ensures transparency and accountability in the process and ensures that every person dealing with registrations can rely on the register as containing full and complete information relating to a property.

Engaging in such acts leads to the attraction of provisions of the IPC relating to cheating and forgery, with criminal conspiracy depending on the number of people involved. Even the exception of public servant as mentioned  Section 177 of the IPC does not apply. This was upheld by the Karnataka High Court in the recent decision. Here, The petitioner-Accused contended that only an offence under Section 177 of the IPC is attracted, as the document was registered based on purportedly false information (proceedings for which can be instituted only by a public servant in terms of Section 195 CrPC). However, the Court rejected this argument.

According to the court, in so far as it concerns providing false information to a public servant, Section 177 of the IPC is a separate and distinct offense from those under Sections 419, 420, 468, and 471 of the IPC. Therefore, the person who feels wronged in this scenario is the public servant, who has the option to take action if he so chooses.

The No Objection Certificate (NOC), which guarantees legal compliance, is a crucial document in real estate transactions, to sum up. To ensure accountability and transparency, the Registration Act of 1908, specifically Section 17, requires that documents pertaining to immovable property be registered. To improve property identification, Section 21 mandates comprehensive property descriptions and maps or plans. While Section 28 designates the Sub-Registrar’s office for land-related document registration, Section 23 establishes a four-month registration period. Section 32 describes the registration procedure and encourages the use of appropriate paperwork.

The case of Suraj Lamp and Industries Private Limited v. State of Haryana highlighted the importance of proper registration and the goal of the Act, which is to protect against fraud in property transactions and to promote orderliness and discipline.

The Indian Penal Code (IPC) contains harsh penalties for using fictitious NOC certificates in real estate transactions, including forgery, fraud, and possible criminal conspiracy. In Y.N. Sreenivasa & Anr. v. The State of Karnataka, the Karnataka High Court made it clear that giving false information to a public servant is not the same as other IPC offenses, and that the public servant is entitled to file a lawsuit if necessary.

In conclusion, the integrity and transparency of real estate transactions depend on compliance with the Registration Act and related legal requirements. Fraudulent activities, like using fictitious NOCs, can have major legal ramifications, emphasizing how important it is to strictly abide by the law in all real estate transactions.

Aditya Pratap is a lawyer and founder of Aditya Pratap Law Offices. He practices in the realm of real estate, corporate, and criminal law. His website is adityapratap.in and his media interviews can be accessed at http://www.youtube.com/@AdityaPratap/featured . Views expressed are personal.

This article has been assisted by Aabhas Jindal, a 3rd year student pursuing B.A.,LL.B. from Maa Vaishno Devi Law College, Lucknow.