Karnataka HC: Kaveri-2.0 glitch cannot block sale of valid perpetual leasehold rights; manual registration ordered if mapping is not fixed

The petitioner, a builder and developer, acquired property held under a Nirantara Patta/perpetual lease and constructed a 34-flat residential apartment known as “Krish Jeevan Apartment” after obtaining the requisite local-authority permissions and completion certificate.

Sale deeds for 21 flats had previously been accepted and registered before implementation of the Kaveri-2.0 portal.

Registration of the remaining 13 flats was obstructed because the municipal/e-property records reflected the original lessor as “Owner” and the petitioner only as “Holder/Tax Payer”; consequently, the Kaveri-2.0 system did not recognise the petitioner as competent to convey the property.

The authorities’ communications acknowledged that this was a recurring API/data-mapping problem affecting Nirantara Patta/perpetual lease properties in Belagavi and requested technical modification of the system.

The petitioner sought a writ directing registration of the sale deeds, an alternate manual mode of registration pending rectification, and modification of the portal to recognise his leasehold interest.

Whether the respondents could refuse to process and register the petitioner’s sale deeds merely because the municipal/e-property records and Kaveri-2.0 portal reflected the original lessor as “Owner” and the petitioner as “Holder/Tax Payer,” despite the petitioner claiming a transferable Nirantara Patta/perpetual leasehold interest.

Whether a permanent/perpetual leasehold interest created by the Nirantara Patta constituted a legally recognisable and transferable proprietary interest capable of being conveyed without first being converted into freehold ownership.

Whether the authorities were required to modify the municipal/e-property and Kaveri-2.0 mapping mechanism, and provide manual registration if the technical defect remained unrectified.

The Court applied Section 105 of the Transfer of Property Act, 1882, which defines a lease as a transfer of the right to enjoy immovable property and recognises that a lease may create an interest in the property.

Section 108(j) recognises, subject to the contract and local usage, the lessee’s right to transfer, mortgage or sub-lease the whole or part of his interest.

The Court held that the legal character of a Nirantara Patta depends on the terms of the grant and the chain of title, not merely its nomenclature, relying on Provash Chandra Dalui v. Biswanath Banerjee, (1989) 4 SCC 495.

It relied on Smt. Marembi v. Jiyauddin Safisab Khatib, RSA No. 205/1990, for treating registered Nirantara Patta documents as legally significant title documents concerning permanent leasehold rights.

It relied on Dr. V.M. Kerudi v. Principal Secretary, Urban Development Department, W.P. No. 105498/2022, for recognising perpetual leasehold as a continuing and enforceable proprietary interest.

It relied on Sri Rajaram S/o Jyotiba Melage v. Assistant Director of Land Records, W.P. No. 104052/2015, for the distinction between revenue or municipal entries and substantive title.

It relied on State of U.P. v. Lalji Tandon, (2004) 1 SCC 1, regarding the recognition and incidents of perpetual leases.

The Court also applied Article 300-A of the Constitution, holding that a lawful proprietary interest cannot be rendered illusory by executive action or software limitations absent authority of law.

Administrative software is only a mechanism to implement law and cannot create a prohibition not found in statute or the governing lease documents, consistent with the statutory approach emphasised in Raghunath Rai Bareja v. Punjab National Bank, (2007) 2 SCC 230.

The Court examined the Nirantara Patta and connected title documents and found that they disclosed a permanent/perpetual, heritable and transferable leasehold interest rather than a revocable licence or mere permissive occupation.

The petitioner was not required to establish absolute ownership of the underlying land; it was sufficient that he possessed a legally recognisable interest competent to be conveyed.

The original lessor’s continued description as owner represented ownership of the reversionary interest and did not negate the petitioner’s separate leasehold title.

The prior registration of 21 sale deeds from the same title chain, absence of any order cancelling those registrations, and the respondents’ failure to allege termination, forfeiture or statutory prohibition reinforced the conclusion that the refusal resulted solely from Kaveri-2.0’s technical mapping defect.

Although the State retained power to scrutinise title, transferability, stamp duty, registration fees and other statutory requirements, it could not substitute an automated software rejection for that statutory scrutiny.

Since the problem affected similarly situated perpetual leaseholders, the Court considered a systemic correction necessary rather than relief limited to the petitioner’s flats.

The writ petition was allowed, and the Director of Municipal Administration, in coordination with the Urban Development Department and municipal authorities, was directed to amend the Form No. 2/e-property/API mapping within two months so that the holder of a valid Nirantara Patta/permanent lease is separately identified and transmitted to Kaveri-2.0, without disturbing the original lessor’s reversionary ownership.

If the mapping was not rectified within that period, the jurisdictional Sub-Registrar was directed to receive, process and manually register the petitioner’s sale deeds conveying the permanent leasehold rights, subject to verification of title, transferability, identity, stamp duty, registration fee and all other statutory requirements.

The judgment did not declare the petitioner absolute owner of the underlying land; it recognised only his transferable permanent/perpetual leasehold interest.