January 22, 1996
DAR OPINION NO. 04-96
PARO Juan B. Bolaño
Provincial Agrarian Reform Office
E.J. Blanco Drive
Pilapil, Dumaguete City
Dear PARO Bolaño:
This has reference to your letter inquiring on 1) the official stand of the DAR regarding the issuance of clearance for the registration of transactions covering agricultural landholdings foreclosed by banks, in the light of Section 6 of R.A. 7881 allowing the sale, transfer or conveyance of said lands and 2) whether the GFIs can withdraw the properties which they previously turned over to the DAR.
At the outset, please be clarified that the net effect of Section 6 of R.A. 7881 is to allow government financial institutions to dispose of their properties under the General Banking Act. As regards the foreclosed assets of private banking institutions, Section 71 of R.A. 6657 provides that banks may acquire title to mortgaged properties, subject to existing laws on compulsory transfer of foreclosed assets, and acquisition as prescribed under Section 16 of said Act. However, since the properties fall under CARP coverage, the same shall still be acquired by one government through the DAR for distribution to qualified beneficiaries, as mandated by R.A. 6657.
As applied to your specific query, since the transfer by the banks of their foreclosed agricultural lands is allowed, DAR clearance may be issued for the registration of the transfer of said lands. However, the coverage thereof under CARL shall still be pursued.
Anent your second query, it is submitted that GFIs can no longer withdraw the properties they turned over to the DAR pursuant to CARL and E.O. 407, as amended by E.O. 448 before, 12 March 1995 (effectivity of R.A. 7881). Pursuant to the general rule on the prospective application of laws, foreclosed assets which have been turned over prior to said date and determined as falling under CARP coverage are no longer subject to reconveyance in favor of said institutions.
Please be guided accordingly.
Very truly yours,
(SGD.) HECTOR D. SOLIMAN
Assistant Secretary
Legal Affairs Office