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 Property Rights
Mafia dealing the land in Bangalore
India Thursday, December 4, 2008

In the tech city - Bangalore,

Scott Carney of an online portal Weird.com writes about The Godfather of Bangalore: ex-don Muthappa Rai. In the tech city, thanks to the convoluted rules regarding land ownership, where 85% of the population lives on land occupied illegally, the claim to any property can made by erasing the owner’s nameplate and putting a claim that it is indeed yours. Adding to this problem, due to Bangalore being the hub of the IT companies, property prices have sky rocketed. And the demand for land is high. So, if you want to buy land in Bangalore, how do you go about it?


With the courts tied up in knots, gangsters offer to secure deeds in days rather than years. "Businesspeople like to do their business, but many times the system does not permit them to do it," says Gopal Hosur, the city's joint police commissioner. "Because of escalating land values, unscrupulous elements get involved. They use muscle power to take control of the land." Some 40 percent of land transactions occur on the black market, according to Arun Kumar, an economist at Jawaharlal Nehru University. Often the local authorities facilitate these deals. A World Bank report rated the Bangalore Development Authority, which oversees urban planning, as one of the most corrupt and inefficient institutions in India.


Here, enters the self-proclaimed ex-don: Muthappa Rai. Muthappa will solve any conflict regarding land. Two conflicting two parties take their pleas to him, he hear them in his own court, and decides which has a more legitimate claim on the land. He then gives 50% of the price of the land to the winner and 25% to the other party and bags the remaining 25% by selling the land to his client. With the growing visibility of Bangalore in the world financial market, Muthappa Rai’s intervention is constantly needed, making Muthappa rich along the way.


At Rai’s residence, two burly men carrying shotguns guard the gate of the fortified compound. The mansion is situated on a hill top, a giant white building surrounded by a 20-foot-high concrete wall. The home is immense and gaudy, replete with gold ornaments and crystal chandeliers. In the garage sits a bulletproof Land Cruiser. An attendant tells me Rai outbid Nawaz Sharif, the former prime minister of Pakistan, for it. The vehicle is built to withstand AK-47 bullets and rocket-propelled grenades.


On any given day, he says, 150 people make their way to his opulent mansion to seek his help. He declines to name clients but he lets slip that he recently acquired 200 acres of land for the titanic Indian conglomerate Reliance. "There's no question of American companies coming to buy land," he says.


Paradoxically, Rai's strong-arming may be helping to curb violence in Bangalore. With a system in place — even a corrupt system — everyone knows how the game is played. As a result, fewer people get hurt. Or, as Rai would have it, "ultimately, everyone wants to settle. No one wants to go to the courts."

Scott Carney has traveled to some of the most dangerous and unlikely corners of Asia. He has written about skeleton traders, kidney brokers, an all-out auto-rickshaw race in Tamil Nadu and explored Chennai's e-waste junkyards where old computers are reduced to gold. He divides his time between India and the United States

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