LIMITATIONS TO THE USE OF LAND AS SECURITY

Abstract

The nature of the title vested in the Right of Occupancy has always been a topic for debate these debates have been framed on determining whether it is a lease, a licence, or an absolute right. In Street v. Mountford it was held that for a lease to be valid there must be exclusive possession at a rent and for a term. But a holder of right of occupancy under the Act does not enjoy exclusive possession against the Governor. The Governor or any public officer authorised by him has unfettered access to the land comprised in any statutory right of occupancy or any improvements effected thereon for inspection at any reasonable hours in the day time. The easy revocability and the lack of prospective certainty of duration which are characteristics of a license are absent in the right of occupancy as such it is not a licence because, unlike a licence, it is alienable, transferable and transmissible. The right of occupancy has also been thought of as a freehold; but it is not a freehold because, as already stated above, the Right holder has no exclusive right to possession, and in the case of actual grant of statutory right, it is not indefinite in duration but rather it is for a term of years certain and is subject to the payment of rent to the Landlord (Governor). The intention of the lawmakers in introducing the Right of Occupancy system was to establish an entirely new interest in land.As part of the Right of occupancy system the Act introduced the issuance of a certificate of Occupancy by the Governor of a State. A certificate of occupancy is merely an evidence of a Right of Occupancy and does not on its own confer a title or interest in land. The Act has not provided any conclusive means of proving ones entitlement to a Right of Occupancy.The certificate raises a presumption of title. In Aziv. Registered Trustees of The Evangelical Churches,the court held that the issuance of Certificate of Occupancy in respect of any land would not validate defects, if any in the title of the holder. It, therefore, held that a Certificate of Occupancy granted to one of the claimants who had not proved a better title was invalid.As such a Certificate of Occupancy may be set aside if it turns out that the holder had no right to the land; or in favour of a pre-1978 conveyance or deemed grantee of Right of Occupancy under Section 34 of the Act. Thus a Certificate of Occupancy issued pursuant to the Act only gives the right to use and occupy land, it neither confers nor is it necessarily an evidence of title. The horror and hellish implication of this is that where the Certificate of Occupancy is set aside for any reason, the mortgagee who has accepted it as security realises that the certificate he is holding automatically becomes “a piece of paper having no value.” Thus, where it is shown that another person has a better right to the grant, the court will if asked to do so set aside the grant. In Ogunleye v. Oni, the Supreme Court held that a certificate of occupancy issued pursuant to the Land Use Act only gives right to use and occupy land.