Boostrapping : Improving resolution of civil disputes
Proposed administrative procedure - CIVIL.01
Improve resolution of inheritance related disputes
- CIVIL.01.001 --- Inheritance of land/building
- CIVIL.01.002 --- Inheritance of bank accounts/FDs
- CIVIL.01.003 --- Inheritance of shares
- CIVIL.01.004 --- Inheritance of gold etc
- CIVIL.01.005 --- Faster tranfer of land/buildings
- In general . . .
- Draft of the act to create procedure CIVIL.01
The civil courts in India are clogged with crores of cases. There are three main reasons
The CIVIL.01 deals with a small class of civil cases --- cases related with inheritance. The proposes laws/procedures makes it possible for courts to decide speedily as well as fairly. CIVIL.01 consists of several sub-laws, each sub-law deals with specific issue dealing with inheritance. I have specified the detailed proposals below.
- our defunct PM/CM and Law Ministers at Central as well as State level allocate negligible funds to courts, and as a result the State's High Courts find it impossible to spawn new courts.
- the judges are defunct, and too nexused with local lawyers. The judges end up wasting most of their time in catering the demands of lawyers with whom they have nexuses, and so courts proceedings move at sluggish pace
- the laws/procedure are too cumbersome and complicated, making it difficult for resolve the dispute as per laws.
CIVIL.01.001 --- Inheritance of land/building
- At the time of purchasing a property, the State Govt will charge 25% higher transfer tax if buyer does NOT specify the nominees. The buyer can specify upto 5 nominees and their %-shares.
- In addition, the State Govt will charge 25% higher annual tax if the owner has NOT specified a nominee.
- If the owner expires, the property will be transferred in the nominees' names in the proportion indicated.
- If any nominee wants cash for his share of the property, and remaining nominees are unwilling to give the cash or they fail to agree on a value, the Jurors will hold the auction. The money will be split as per their share in the properties. In the auction, a nominee will only have to bid for part that is NOT his share. eg Say a property has 4 nominees A, B C and D with shares say 40%, 30%, 20% and 10% respectively. Say in the auction, a person bids Rs 10,00,000/- as bid. Then A can beat his bid by bidding Rs 600,001/- as he already owns 40% of the property, and B can beat the bid by bidding Rs 700,001/- and so forth.
In case of a land/building, if the nominees are NOT specified, the Jurors will decide nominees as follows : his parents, spouse, sons and married or unmarried daughters will have equal stake.
CIVIL.01.002 --- Inheritance of bank accounts/FDs
- At the time of opening a bank account/FD, the bank will allow the person to specify upto 5 nominees and their %-shares.
- The State Govt will 1% of the principal as charge if there are no nominees, and charge 5% of the interest earned as tax if the account/FD does NOT have a nominee.
- If the account is a current accountv (on which interest is 0%), and it has no nominees, the State Govt will charge Rs 500/yr plus 1% of the average balance as tax.
In case of a bank accounts/FDs, if the nominees are NOT specified, the Jurors will decide nominees as follows : his parents, spouse, sons and married or unmarried daughters will have equal stake.
CIVIL.01.003 --- Inheritance of shares
- In case of Deemat accounts, if the nominee's name is NOT specified at the time of opening the account, the State Govt will charge Rs 1000/- as tax from deemat provider. The deemat provider may pass this burden onto the account holder.
- if the nominees are NOT specified, the Deemat Provider will pay Rs 1000/yr plus 0.1% of year end closing value of the shares as tax to the State Govt. The Deemat Provider can pass the charges to the account holders.
- In case of non-deemat shares, if the nominee on the folder is NOT specified, the State Govt (of the state in which the share holder lives), will charge Rs 100/yr/folder as tax from the share-owner.
CIVIL.01.004 --- Inheritance of gold etc
- If a person owns, over 500gm of gold, and nominee is NOT specfied, the State Govt where he files his income tax return will charge 1% of the gold value (as on closing date of the year) as tax.
- If a person owns, over 5000gm of silver, and nominee is NOT specfied, the State Govt where he files his income tax return will charge 1% of the gold value (as on closing date of the year) as tax.
CIVIL.01.005 --- Faster tranfer of land/buildings
Problem : In a large number of cases, the spouse/children etc of the person who has expired DO NOT transfer his properties in their names for years and sometimes decades. Such "dead owners" owrsen the liquidity of land market and after years/decades when the relatives etc of the expired person come to court over the duspite, it becomes further difficult to resolve the conflicts.
- Every 5 years, the owner of land/building must appear in the local Land Record Office so that the officer can confirm that he is alive.
- If the owner of a perticular flat/plot does NOT appear, the officer in charge will send him summons, and will then try to contact him. He may charge a fee of Rs 100/- to cover the expense.
- If the nominees apply for transfer over 3 months after death, the transfer fee will be 10% higher and there will be 1%/mo interest on the tranfer fee starting 3 months after expiry.
In general . . .
In general, there are 10s and 10s of ways, which make resolution of inheritance related cases difficult, and by making detailed laws, the problem can be solved.
The general stragety is to increase the tax burden on the person iff he does NOT specify a nominee. This tax burden is fair, as not specifying nominee increases financial as well as moral burden on society. Another option is to increase tax burden on relatives/nominees for delay in filing an inheritance related dispute, as delay in filing inheritance related cases also increases financial/moral burden on the society.
Above tow are very general, and albeit vague guidelines. On a case by case basis, one needs to make detailed laws.
Draft of the act to create procedure CIVIL.01
One law needs to be passed in Assembly to enact CIVIL.01. To see the draft, please click here.
Now citizens can ask MLAs to pass this Act. But IMO, it will be wiser for citizens to first enact procedure LM.02 then use LM.02 to pass this CIVIL.01 draft WITHOUT any help from Councilors. To know about procedure LM.02, please click here.
If you have any other question, please mail it to MehtaRahulC@yahoo.com. Thousand thanks in advance.
Next - CIVIL.02 : Improving rent related disputes