Supreme Court Urges Blockchain for Secure Property Transactions

In a set of observations with far-reaching implications for property law in India, the Supreme Court has called for a fundamental reform of the country's land registration and titling system. The Court noted that the existing legal framework, based on colonial-era statutes, has perpetuated confusion, inefficiency, and massive litigation.

A Bench comprising Justice PS Narasimha and Justice Joymalya Bagchi examined the “dichotomy between registration and title” and urged the Government of India to take the lead in modernizing the real estate transaction system using emerging technologies such as blockchain. The Court also requested the Law Commission of India to conduct a comprehensive study and submit a report after consulting the Union and State Governments, experts, and stakeholders.

The Court observed that India's property transaction system continues to operate under a colonial framework governed by three century-old statutes: the Transfer of Property Act, 1882, the Indian Stamp Act, 1899, and the Registration Act, 1908. While these laws were designed for a different era, they still form the backbone of India's real estate system. However, the Court noted that they have long sustained a dichotomy between ownership and registration.

“The Registration Act mandates registration of documents, not of title. Registration of a sale deed does not confer guaranteed ownership; it only serves as a public record of the transaction having presumptive evidentiary value,” the Bench observed. This means that even a registered sale deed is not conclusive proof of ownership, leaving property buyers dependent on a long and painstaking title search across past transactions to establish marketable title.

Highlighting the hardship faced by ordinary citizens, the Court said that the current system based on presumptive title through registration has made property transactions cumbersome, uncertain, and litigation-prone. “Property purchase has not been easy. It is not difficult to find people grudgingly telling us that it is, in fact, traumatic,” the judgment authored by Justice Narasimha noted. According to the Court, property disputes constitute an estimated 66 percent of all civil cases in India, making land conflict one of the largest sources of litigation in the country.

The Court said the outdated legal structure has created systemic deficiencies, including fake documents, land encroachments, delays, the role of intermediaries, and fragmentation of rules across states, all of which have undermined public confidence in land transactions. The legal framework for purchase and sale of immovable properties suffers from several systemic deficiencies that undermine reliability, transparency, and efficiency.

While acknowledging steps such as the Digital India Land Records Modernization Programme (DILRMP) and the National Generic Document Registration System (NGDRS), the Court cautioned that digitization alone cannot resolve the underlying problem of unclear titles. “If the original record is inaccurate, incomplete, or subject to dispute, the digital version will simply perpetuate the flaw,” the judgment said.

The Court pointed to blockchain technology as a transformative possibility for ensuring secure, transparent, and tamper-proof land records. “Blockchain technology can transform land registration into a more secure, transparent, and tamper-proof system. Each entry, once validated into the Distributed Ledger, becomes part of a cryptographically linked chain that cannot be altered without detection,” the Court noted. Such a system could integrate cadastral maps, survey data, and revenue records into a single, verifiable, and accessible digital framework, thereby reducing fraud, improving traceability, and enhancing public trust in land ownership.

Recognizing the magnitude of reform required, the Court urged the Government of India to lead an inter-governmental initiative with participation of States to restructure property laws in light of technological advances. It proposed that the reform process should examine and possibly amend or align the following statutes: Transfer of Property Act, 1882; Registration Act, 1908; Indian Stamp Act, 1899; Evidence Act, 1872; Information Technology Act, 2000; Data Protection Act, 2023.

“We must dare to think and look for alternatives,” the Court remarked, calling for India to move beyond its colonial presumptive title regime toward a conclusive, technology-enabled property ownership system.

The Court made these remarks while striking down Rule 19 of the Bihar Registration Rules, 2008, which empowered registering authorities to refuse registration of documents if proof of mutation of the property under sale in favor of the vendor is not produced along with the registering document. The Court held that these provisions were ultra vires the Registration Act.