Dambulla rocked by loan scandal using bogus land deeds

Fraudulent business deals initiated with banks using bogus land deeds is an issue that has put Dambulla under the spotlight

Fraudulent business deals initiated with banks using counterfeit land deeds is a frequently discussed issue in Dambulla. In this article, the Daily Mirror attempts to shed light on the execution of fraudulent land deals done through the use of bogus deeds with the assistance of government officials.

If there is vacant land within the boundaries of Dambulla city, it is likely that someone has obtained loans worth millions of rupees by creating fraudulent deeds. For certain lands, deeds and documents have been forged; allowing individuals to secure loans from banks, and these loans have already been settled. Some landowners are unaware that certain individuals have obtained loans through the creation of counterfeit documents for their properties. However, for several lands, fraudulent documents have been prepared, but loans remain unpaid. It is only after borrowers default on payments that banks start to take necessary actions. It is then that landowners discover that loans were obtained after creating fraudulent deeds for their properties. 

It has been reported that certain government officials have allegedly supported this shaky land smuggling venture. The illicit activity is conducted through a fake Land Kachcheri and complaints regarding it have been lodged with the Criminal Investigation Department. Residents of Dambulla maintain that, regardless of the number of complaints filed, the investigation into the illegal Land Kachcheri is progressing at a slow pace.

These land smugglers engage in forging the signatures of every government official required for necessary approvals during land transactions in Sri Lanka. Additionally, they counterfeit the official seal of these officials. The primary target of these smugglers is the vacant land near Dambulla city. Through the fabrication of false documents for these lands, these individuals attempt to secure loans from bank branches which are not situated in Dambulla. They go to locations such as Anuradhapura, Kurunegala, Kandy, and Colombo and approach banks that are not based in Dambulla.

“We issue three certificates: street line certificates and non-acquisition certificates and the certificate of title. We examine the registered deeds before issuing these certificates. We only check whether the deed is registered in the land registrar’s office. We do not check if it is fraudulent or not”
-  S. B.Halangoda, Engineer, Land Division of the Dambulla Municipal Council

There is information suggesting that certain managers of both private and state banks in Dambulla city have allegedly supported the illicit practice of selling land through the creation of fake deeds. These transactions are not a secret to the residents of Dambulla. Information about how some former bank managers earned millions of rupees by creating fake deeds has already been provided to the Criminal Investigation Department. However, people in Dambulla pointed out that the investigations are progressing at a snail’s pace. As a result, some bank managers involved in land scams have managed to leave Sri Lanka. It is against this backdrop that a woman from Dambulla files a complaint at the police headquarters stating that a group of her relatives is involved in selling land for substantial amounts by generating fake deeds; a venture which is facilitated by an illegal Land Kachcheri.

The complaint was lodged by a woman named Yamuna Shanthi, a resident of Dambulla. In her complaint to the police headquarters, she alleged that two of her relatives had fraudulently created deeds for the two-and-a-half-acre land, on which she resides. According to her claim, the land was transferred in the names of these relatives through the illegitimate use of official seals and signatures of government officials. Subsequently, it was mortgaged to both private and government banks, and funds were obtained. According to her, counterfeit deeds were fabricated for vacant lands within the city limits of Dambulla. And by using fraudulent seals these lands were mortgaged to banks to obtain money.

In her complaint, it is stated that 13.3 million rupees has been obtained from one bank and another 15 million rupees has been obtained from a private financial institution in Kandy. Furthermore, her complaint states that fraudulent deeds have been generated for several other lands. These documents have been handed over to banks by both her relatives and those involved in the land fraud, resulting in monetary transactions.

In her complaint, it is mentioned that prior to approaching the police headquarters, she had reported on the land fraud involving fake deeds to both the Dambulla Police and the Grama Niladhari officer of Saluapullana Wewa Village in Dambulla. When no relief was granted, she took the initiative to document her complaint on a sheet and submit it to the police headquarters.

When she went to the police headquarters to file the complaint, she presented several forged deeds belonging to her relatives and counterfeit official seals of the relevant government officials on a blank sheet of paper used for forging documents, starting with deed registration. These included seals of various authorities, such as Grama Niladhari officers, lawyers and notaries, additional land registrars, officials of the Dambulla Pradesha Sabha, commissioner of Buddhist affairs of Kandy, the survey department, assessment officers, and even forged seals of the former mayor of Dambulla.
Her complaint was received by the Criminal Investigation Department on July 7. The Criminal Investigation Department assigned the complaint number 5356. In her complaint, she addresses an illegal Land Kachcheri and of widespread land scams in Dambulla. Despite previously reporting this issue to the Dambulla Police, justice was not granted to her.

Vacant lands targeted 

Therefore, she had to go to the police headquarters to disclose information about a significant scheme where money was obtained through the creation of fake deeds for vacant lands in Dambulla, subsequently mortgaging them to banks. However, this does not seem to bring justice to her either, due to a legal issue affecting the complaint made by Yamuna Shanthi. This is confirmed by the letter signed by Superintendent of Police of the Criminal Investigation Department Mohan Siriwardena instead of its director. The letter, bearing the number PA/DCI/V/6185/2021, was sent to Yamuna Shanthi on 11-01-2021, indicating the legal background.

The letter says (excerpt), “Your complaint dated 07-07-2020 concerns the offense of the preparation of false documents. The complaint should be initiated by the mortgagee. Consequently,

the matter should be referred to the Special Crime Investigation Division of the area, and I kindly inform you that this department will not handle it.” Beyond that, no inquiries have been conducted.

After that incident, those who were involved in holding fake Land Kachcheri and creating fraudulent deeds focused their attention on Yamuna Shanthi. Following her complaint to the Criminal Investigation Department regarding these scams, individuals responsible for creating fraudulent deeds, as well as certain bank officers and many others involved, have departed from the Dambulla area. Individuals holding high-ranking positions in some banks have even left the country.

Furthermore, according to residents of Dambulla, those involved in the scam have arranged accommodations and other provisions for Yamuna Shanthi. Even at the time of going to press writing the whereabouts of Shanthi was not known. When questioned about these developments, her other relatives did not offer a clear response to our queries about Shanthi.
Meanwhile, another plot of land situated in the centre of Dambulla city and owned by a well-known local business has been mortgaged to a bank and millions of rupees has been obtained. The person behind this questionable deal is another businessman from the same area. He has forged the signature of the rightful landowner of the land and created fake documents. The owner of the land came to know of the fraud when receiving a letter from a bank in Kandy, notifying of the pending auction due to non-repayment of the loan.

“Most of the lands in Dambulla are sacred lands. When a loan is secured by mortgaging a plot of land we rely that information by examining the land extract. The lending institution is responsible in verifying the accuracy of the relevant documents”
- R.M.K. Rajapaksa, Chief Engineer Matale Urban Development Authority

The businessman has taken legal action against this fraudulent land deal. An analyst’s report on the forged signature has been submitted, indicating that the signature is not of the actual landowner. “I can’t say much because the court proceedings are in progress. However, in Dambulla, land fraud is occurring on a large scale. This involves high-ranking officials as well as some politicians,” the businessman stated. S. B.Halangoda, Engineer of the Land Division of the Dambulla Municipal Council, said the following when questioned about how the Dambulla Municipal Council approves documents related to the sale of land under fraudulent deeds: “Generally, before obtaining a loan, the ground plan of the land in question should be approved. Subsequently, we issue three certificates: street line certificates and non-acquisition certificates and the certificate of title. We examine the registered deeds before issuing these certificates. We only check whether the deed is registered in the land registrar’s office. We do not check if it is fraudulent or not. If there is a proper plan and extract related to the land, we are obligated to grant approval. We cannot determine whether the deed is genuine or fraudulent. We lack the means to identify it.”

This newspaper also forwarded some queries to R.M.K. Rajapaksa, Chief Engineer of the Matale Urban Development Authority regarding these land issues. He said the following: “Most of the lands in Dambulla are sacred lands. When a loan is secured by mortgaging a plot of land we rely that information by examining the land extract. The lending institution is responsible in verifying the accuracy of the relevant documents. If the documents submitted to them are deemed correct, we grant approval. There is no mechanism for us to verify whether the documents are genuine or not. Our role is to provide the requested information when asked, and we do not have the means to confirm the accuracy of the information provided. The verification of a deed’s authenticity is only possible through the examination of the available documents. After reviewing these documents, if they are deemed correct, approval is possible.”
“Land smuggling is prevalent across Sri Lanka and this illegal business activity has been prevalent in Dambulla for a considerable period. I don’t know how those deeds are forged,” he added.

The Land Registrar of the Matale Land Registry Office, R. M. K. Rathnayake, provided the following statement:
“Typically, we register a land by examining the land extract. We focus solely on the factors considered during the registration of a deed. If the provided information aligns, we proceed with registering the deed. In cases where someone creates a fake deed and registers it based on submitted documents, we do not physically inspect the land. Consequently, we may not identify it as fake. During the deed registration process, we rely on the documents presented to us. We register deeds by reviewing the provided extract, and we do not extend our examination beyond that. If the information provided to us aligns the annexure, we proceed to register the deed,” said Rathnayake who added  that there have been instances of lawsuits related to fraudulent deeds in Dambulla.

Police confirm receiving complaint

When inquired about this matter with the Dambulla Police, a spokesperson there mentioned of receiving a complaint regarding a land Kachcheri involving fake deeds. The spokesperson added that no information about the progress of the investigation is available.