The arcana of buying land

Frequently in rural Tamil Nadu, a farmer needing some money quickly, gets into a legal arrangement with a broker. He signs a document or executes a power of attorney and hands over his documents as collateral. The “Agreement” holder or “Power of Attorney” [POA] holder is then the person you have to deal with. Or the land owner may have taken a loan from a bank or a financier who may or may not have registered the loan deal. If a loan deal, POA or Agreement is registered the EC will show an ‘encumbrance’.
Unfortunately, the registration can have occurred anywhere in the State and will then, not show up in the EC at the local registrar. What do you do then? Your lawyer or his clerk must then physically sight possession of document in the hands of the owner.
Now here’s a delicious turn: there may be no document in the conventional sense.
How can that be? The property may have been inherited from a pater familias, several generations ago and it may have been have been partitioned by verbal understanding, with no thoughts of selling it.
But that is highly unlikely. At some point or the other some sort of legalisation would have occurred. One of the inexpensive ruses is for one cousin or brother to sue another in a ‘friendly suit’ and all legal inheritors approaching the judge with a compromise plan. The plan will detail how they all consent to partition the properties. The court will then decree the arrangement legal. The decree then becomes the starting document for your lawyer to work on.
Usually, each title holder gets a “patta” that is often proffered as conclusive evidence of ownership. But it is not the case. It is only a certificate of holding but not of ‘what’ in detail is held. That is established by a a document known as “adangal” in Tamil , meaning “inclusions or contents”, which you obtain from the Village Administrative Officer [VAO]. The adangal is fairly conclusive proof of ownership. It will list name, survey number, extent, the type of land, what is cultivated and what the tax is. There is another document called “chitta” that comes with it, which lists public assets like lakes, ponds, roads, temples, graveyards etc.
Then there is the FMB [Field Map Boundary] Sketch [-or known as just the “sketch”] which is a scale drawing of the survey numbers involved. This is again obtained from the VAO.
Between, the patta [which describes the borders of the property], the adangal, the chitta, the sketch and the stamped, registered document of ownership [-or a court decree, as we saw], one is getting closer to the required legal package.

5 thoughts on “The arcana of buying land

  1. I think it is an interesting information that I have read. Thanks to let me write a comment in your page.

    HazelI

  2. I have gone thru identical issues in buying land near Denkanikottai. I am also stuck at the last stage where it is taking forever to get the Khata transferred. It has been 2 months since I applied for the same, it is being postponed every day with some odd reason or the other. Am wondering how much longer it will take to get the same.

  3. Hello ira…

    I’d like others to come in on your query with more authoritative expansion with relevant citations. I have only the counsel of my lawyer who is also a Chartered Accountant with many NRI and foreign clients.

    He says, only Indian citizens [which includes NRIs, of course] are allowed to buy land – not just agricultural. Foreigners after a certain number of years residence, and with proof of ‘real need’ are allowed to buy a reasonable size of land for residential purposes only. I further know [-by hearsay] that companies with controlling foreign equity cannot own agricultural land [- industrial, residential land, yes]. That is to say, foreigners can own equity in companies that own non-ag. land.

    Laws are constantly changing and the government in search of the Holy Grail of 10%+ growth may well have thrown open the whole country to all comers.

  4. Nice post.

    Am intrigued by your assertion “One major law to consider is that many states stipulate that ‘outsiders’ may not buy agricultural properties …In Tamil Nadu there are no restrictions as long as one is an Indian citizen.In Tamil Nadu there are no restrictions as long as one is an Indian citizen”

    What is the basis (please cite relevant central or Tamil Nadu law) for the assertion above that it is only Indian citizens that are permitted to buy agricultural land in Tamil Nadu?

    I am familiar with the provisions of a central law called FEMA. Per FEMA, a resident of India, even if he or she is a US citizen, is not prohibited from buying agricultural land in India. However, FEMA prohibits even an Indian citizen who is not resident of India, from buying agricultural land in India.

    I would like to know the source (preferably authoritative and not mere hearsay) of your information that only Indian citizens are allowed to buy agricultural land in Tamil Nadu.

    Thank you.

    Please feel free to send a reply to r2iira@yahoo.com

  5. DV,
    This is really useful , Ramesh and I have been asking around about the modalities of buying land and also restrictions regarding non-agriculturists buying agricultural land etc etc…
    We will wait for the rest of ur article and have many more questions
    devi

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