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Tuesday, June 29, 2021 | 20:55 WIB

JAKARTA, Public Relations—The Constitutional Court (MK) rejected the entire judicial review petition of the Basic Agrarian Law No. 5 of 1960 (UUPA) for case No. 12/PUU-XIX/2021. The ruling was read out by Chief Justice Anwar Usman alongside the other eight constitutional justices on Tuesday, June 29, 2021. Advocate Rega Felix (Petitioner) asserted that Article 23 paragraph (1) of the Basic Agrarian Law was unconstitutional.

In its legal considerations read out by Constitutional Justice Manahan M. P. Sitompul, the Court held that in order to obtain legal certainty regarding the ownership of land rights (in this case property rights), any legal action involving the transfer or encumbrance voids if it is not registered with the authorized agency. In addition, the provision is mandatory in accordance with the processes and procedures determined by statutory laws and regulations

Also read: Petitioner Challenges Provision Requiring Ownership Transfer of Asset to Be Funded by Sharia Bank

Meanwhile, the Petitioner’s assertion that receipt can prove ownership is inaccurate as it only proves payment or transaction, said Justice Enny. Even sale and purchase deeds made before official certifiers of title deeds (PPAT), she added, cannot be declared as proof of ownership because it was only one of the conditions for the transfer of rights. Proof of legal ownership of land is a certificate of land rights because land registration proves the holder of land rights, when the land rights are transferred, and who the new right holder is, including if the land is encumbered with mortgage rights. If receipts were used as proof of ownership of land rights, it would obscure the legal certainty of ownership of land rights, which in the end would actually harm banks as the party providing loans or credit.

“Therefore, the Petitioner’s assertion that the long and expensive process and procedure of the transfer and registration of land rights are due to the need for documents issued by the competent authorities is not a matter of norm constitutionality. As such, the Petitioner’s question of the constitutionality of Article 23 paragraph (1) of [the Basic Agrarian Law], not excluding Islamic banking, is legally groundless,” Justice Enny explained.

Also read: Petitioner of Agrarian Law Revises Petition

The Petitioner alleged that Article 23 paragraph (1) affected sharia banking where land, its transfer, or its encumbrance can be a transaction object. As such, the provision would apply in sharia banking. He believes he has the right to use sharia banking services following his faith and to apply for financing to a sharia bank using a murabahah contract. However, under the a quo norm, sharia banking requires transfer of asset being financed.

The Petitioner revealed that he applied for murabahah financing to buy land to expand his business. He was required to convert a contract that he had signed before. Consequently, he would have to sell the land that he had bought to the bank, who would then lease it to him with a promise to bequeath it at the end of the leasing term. He observed that the ownership transfer would occur multiple times for a single transaction, even up to four times. This would be a huge burden to him as he would have to contend high costs for a long period.

The Petitioner believes the state has the obligation to ensure that transactions carried out by sharia banking have strong legal bases so that the constitutional rights referred to in Article 28D paragraph (1), Article 28E paragraphs (1) and (2), as well as Article 29 paragraphs (1) and (2) of the 1945 Constitution are not violated by the enactment of the a quo norm.

Writer        : Sri Pujianti
Editor        : Lulu Anjarsari P.
PR            : Annisa Lestari
Translator  : Yuniar Widiastuti (NL)

Translation uploaded on 6/30/2021 16:22 WIB

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian version, the Indonesian version will prevail.

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