Sri Lanka: Amending land laws to help  fraudsters without protecting land owners

By Shenali D. Waduge

The Justice Ministry, the Land Ministry, the AG’s Department and the Cabinet are either drafting new laws, amending existing laws, appointing committees or with one nod eliminating existing statutory laws. This is a new Constitutional procedure even when the Constitution does not allow court to eliminate statutes. How far each is working with each other or consulting legal experts in the area amendments are being proposed is a question to be answered. We have three scenarios that warrant the attention of the decision makers and the general public as they all deal with the core sovereign component of land and necessitates public debate and discussion. 

1. Cabinet nod to annul caveat notices

Cabinet in a single day completely repealed Sections 32, 33, 34 and 36 of the Registration of Documents Ordinance 23 of 1927. These are the statutory provisions relating to caveats.

Caveats are registered by the registrars according to the law given in section 36 (and not according to the way Cabinet had stated) from the Ordinance which grants power to the registrar to adjudicate the rights of the person presenting the caveat before registering. They have no authority under the law to register caveats on any land. Not only has the Registrar the power to refuse registration of caveats, the law is extended for the real owner to obtain damages for registering ‘unlawful’ caveats on lands according to section 34.

How can Cabinet decisions repeal statutory provisions in law? Is it correct to do so and what are the repercussions in doing so? 

There is no problem for sellers and banks as owners know how to remove the caveats under the provisions given in the Registration of Documents Ordinance. 

This new situation will create an ideal situation to steal land specially from those living abroad. These citizens have only the solace of placing a caveat to safeguard their land.

Law of Caveat essential

In other nations law of caveats have been extended to save owners from fraudsters. Registrar sends a message to the owner’s telephone if anyone tries to register any document in the land registry. These modern methods should be adopted in Sri Lanka.

A caveat is a safeguard made available to a land owner to protect his/her land from being sold without his/her permission.

Only the owner can put a caveat.

2. Amending Register of Documentation Ordinance but not amending Section 7

Are we conniving with fraudsters?

The Registrar as per Section 33 of the Documents Ordinance 23 of 1927 is bound to adjudicate only land deeds that has the owner’s interest. 

Nevertheless, anything can be done by bribery and this is the area that any new laws being introduced has to address – not to completely annul a safeguard made available to original land owners seeking to protect their land.

Removal of the caveat is removing the safeguard owners have to protect their land.

Thus, the removal of the caveat completely is a bad and wrong decision.

Didn’t the Minister see the important provisions that require immediate attention —

What is the point in amending the Register of Documentation Ordinance but keeping Section 7?

What is Section 7? 

Section 7 of the Register of Documentation Ordinance does not make the Registrar responsible for registering invalid deeds. He has no authority to refuse deeds or to check the identity of owners. This means the registrar can accept even forged deeds and he is not responsible for accepting forged deeds. 

3. Shortcomings in Notaries Ordinance

As per Notary Ordinance all illegible signatures are valid and once the seal is affixed under section 33 of the Notaries Ordinance all deeds are valid even if the notary did not observe the laws to identify the person who signed the deed!

These are the provisions that are required to be repealed.

Not the only safeguard the poor man’s caveat.

Ex of an actual victim – a Bank Manager

 The bank manager wished to buy a land. The broker and the notary were looking after his interest. The owner of the land was abroad. A forged deed was presented to the bank manager selling the land at Nugegoda for Rs. 4 million and Rs. 160,000 stamp duty with a fee of Rs. 80,000. The bank manager was unaware that the land he bought was not from the original owner.

The forged deed was duly registered as the registrar was not responsible and the notary went scot-free as under section 33 all deeds are valid.

If the overseas owner had registered a caveat, the notary could have known and the person abroad would have been informed that the land was being sold without the knowledge of the owner. The buyer eventually lost his money and the house – part of it was bank loan which he has to pay back monthly. These are scenarios that can arise if immediate measures are not taken.

Now connect the situation – notary is not bound to identify original owner, but his/her seal is valid, the registrar is not responsible for accepting forged deeds and the safeguard provision for the land owner (caveat) is removed.

What is the scenario Sri Lanka is creating for the land owners of Sri Lanka?

Shouldn’t the ministries, the lawyers and others tasked to look at where the malady lies come up with answers and not create more problems? 

Shouldn’t the caveat remain but ensure there is proper mechanism to ensure no one else but the real land owner can put a caveat.

Shouldn’t the registrar be made responsible and accountable for accepting forged deeds and ensure he accepts only original deeds?

Shouldn’t the notary be made to have a means of identification system before placing his/her seal? 

The ministries, ministers, lawyers and public servants who are all living off tax payers’ money must work towards facilitating the citizen and not uprooting the citizen of his ownership of land. 

Attorney General, the Justice Ministry and BASL —Today Bim Saviya law is funded by foreign experts to govern the e-register. According to this law even the rich victims affected by fraud cannot go to court if the land registry registers fraudulent deeds. They cannot get back the lands. 

The Justice Ministry must protect the land of the nation that belongs to both the State and the private individuals. The Justice Ministry can enter history books proposing to repeal Act 21 of 1998 and do away with the Bim Saviya and continue with a modernised deed system.

The e-register allows to register forged deeds in one hour in the future with no caveats. Imagine what this means to the land owners. Registrar and the Notary will not be responsible as said the laws protect them. 

We cannot watch a legal land grab by fraudsters taking place knowing that the Government has all the powers to stop it and the data and information required to do so.