Srinagar, July 23: The Jammu and Kashmir High Court has expressed serious concern over the misuse of Lok Adalats and civil court decrees to facilitate land transfers without registered sale deeds, observing that such practices not only violate the law but also cause substantial loss to the public exchequer.

In a significant judgment, the High Court cautioned that reckless use of Lok Adalat awards and civil court decrees for transferring ownership of immovable property enables parties to evade the mandatory process of executing and registering sale deeds, thereby avoiding payment of stamp duty and registration charges.
The Court observed that such transactions amount to a fraud on the revenue and undermine the legal framework governing property transfers. It stressed that ownership of immovable property can be transferred only through legally recognised modes prescribed under the law, and courts cannot be used as a mechanism to bypass statutory requirements.
The High Court noted that obtaining consent decrees or compromise orders solely to validate property transactions without proper registration defeats the purpose of the Registration Act and causes significant financial losses to the government.
Emphasising the need for judicial caution, the Court directed that civil courts and Lok Adalats must not entertain or endorse settlements that effectively transfer title to property without compliance with mandatory legal provisions.
The Court also observed that while Lok Adalats play an important role in promoting amicable settlement of disputes, their proceedings cannot be misused to legitimise transactions that circumvent statutory obligations or facilitate evasion of public revenue.
Legal experts said the ruling is likely to have far-reaching implications for property transactions, as it reinforces that registered sale deeds remain the only legally recognised mode of transferring ownership in such cases, unless otherwise provided by law.
The judgment is expected to strengthen transparency in land transactions, curb revenue leakage and prevent the misuse of judicial forums for avoiding stamp duty and registration fees.