In the state of Karnataka, the E-Khata is a computerised property record kept by bodies such as the former BBMP and other municipal corporations and panchayaths. It contains details of ownership, surveys and tax liabilities. The Khata has now received statutory recognition under the Greater Bengaluru Governance Act, 2024.

The importance of the E-Khata for lenders and financial institutions involved in housing and real estate can also be inferred from a decision of the Karnataka Real Estate Regulatory Authority (KRERA) in complaint 632/2025. Urban real estate transactions see the transfer of the E-Khata as a critical step, particularly affecting mortgage creation, enforcement and recovery. Although courts have consistently held that the Khata does not confer title, they have acknowledged its practical importance to lawful possession, financing and transfer.

Promoter ordered to transfer Khata

The complainants purchased a site in a project from the promoter through a deed of sale dated 3 January 2025. At the time of registration, the promoter promised that the Khata would be transferred within 60 days. However, after some 110 days, this had not been done.

During this period, the complainants serviced their housing loan equated monthly instalments and paid rent, causing considerable financial strain. They complained to the KRERA under section 31 of the Real Estate (Regulation and Development) Act, 2016 (RERA).

Although represented by counsel, the promoter filed no statement of objections. The KRERA relied on an indemnity bond dated 6 January 2025, in which the promoter undertook to transfer the E-Khata. Relying on section 17(1) of the RERA, the KRERA held that transfer of title is complete only when these three elements are satisfied: the execution of the registered deed, the issue of the occupancy certificate and the transfer of the Khata. The promoter was directed to complete the transfer within 30 days, paying compensation for default.

Risks arise without an E-Khata

Failure to secure the E-Khata has serious consequences for both homeowners and lenders. Without a change in municipal records, the property has no independent civic recognition. The Karnataka government has made E-Khata mandatory for sales, mortgages, leases and gifts. Its absence prevents registration of further dealings, complicates utility connections and tax payments and significantly reduces marketability. For lenders, collateral value is reduced, and legal and operational risks increase.

E-Khata plays a central role in security creation and enforcement. It supports the creation of valid security. Banks rely on municipal records to verify the existence and identity of mortgaged property. Without a Khata, the property may not be clearly identifiable and due diligence cannot be completed. Enforcement and recovery become more difficult. During proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 and before the Debts Recovery Tribunal, the absence of the E-Khata obstructs valuations, auction processes, transfers to purchasers and the registration of enforcement conveyances. Auction buyers often insist on clear municipal records, and properties without the E-Khata attract discounted bids and reduced recovery value.

Absence of the E-Khata increases exposure to third-party claims in respect of the property. Disputes about assessment, ownership and municipal liabilities may arise at later stages of enforcement, leading to delays and litigation.

Courts stress Khata’s enforceability role

The importance of the Khata is recognised by the courts. In Jayamma v Assistant Revenue Officer the Karnataka High Court held that, although the Khata does not confer title, it is vital for purposes such as utility connections, mortgages by deposit of title deeds, conveyances and construction permissions. More recently, in Renuka Manghnani v State of Karnataka and Ors, the same court held that the Khata is essential for the effective enjoyment of property.

The E-Khata is not a mere administrative formality, but constitutes the cornerstone of lending security and enforceability. Lenders and financial institutions should treat municipal record changes as significant collateral validation. Credit appraisals and monitoring should incorporate Khata verification. Effective security comes through the validation of title, statutory approval and public records, and not merely through the execution of mortgage documents.

Subrata Mukherjee is a partner and Vignesh Kamath is a senior associate at SNG & Partners.