Thursday 5 November 2015

LEGAL SCRUTINY FOR LONG PERIOD



The ownership of land has originated from time immemorial and has changed the hands through series of transactions. It is very important to trace the ownership of the person, who is offering his property as security. One of the most important factors in verification of title is the period up to which the title has to be traced to avoid any disputes. Generally, the tracing has three important steps; origin, flow, and present status. Most of the Advocates trace the title for a period of 13 years only. Many times, not even a single transaction might have taken place within this period. 

The limitation period for redemption of mortgage is 30 years as per Article 61(a) of the Limitation Act. Limitation against Government is 30 years. According to Section 90 of the Indian Evidence Act, any document executed 30 years or before is presumed to be valid, since it is beyond legal claim.

Article 61(b) of the Limitation Act prescribes limitation period of 12 years for filing suit for recovery of the possession of property, who has acquired the mortgaged property from the mortgagee, without the knowledge of the Mortgagor. The following example would clearly demonstrate the situation.


The tracing should always begin with scrutiny of earliest document recorded. If such documents is not made available; the certified copies have to be obtained from registering Authorities, but should not be ignored. Earlier, documents were called as mother or parent documents. The Partition Deed, Gift Deed, Release Deed, Settlement Deed, Power of Attorney are not mother documents.


After examining the flow of the property, the documents of title of the present Owner, through which he has acquired the ownership, has to be examined. This should be further supported by revenue documents like Khatha. Encumbrance certificates, tax paid receipts, Khatha extracts.

Joint family properties / Hindu undivided family:

The property of Joint Hindu family requires extra care. Though the Khatha of the family has right to alienate such properties, it should he only for legal necessities of the Joint family, if not any legal heir may dispute the transaction.


Any transfer of properties of a Hindu minor requires permission of the Competent Court and only natural Guardians or Guardians appointed by the Court have to represent the minor in transactions. Minor may dispute the transactions and assert his right within three years after attaining majority, if the Court has not permitted such transaction.

Properties allotted/granted by Government/Statutory bodies: The tracing of the title in respect of properties granted/allotted by Government, Statutory bodies like BDA, KHB may be done from the date of such grant/allotment.


Only the person having valid marketable title as certified by the Legal Advisor can create equitable mortgage in favour of the Financial Institutions. Legal scrutiny report should clearly specify the name of the persons, who have to create mortgage.

Only original title deeds of the property should be accepted for mortgage copies of which are examined by the Advocate. In case of partition, purchase of flats, certified copies of the partition, development agreement along with original documents like Sale Agreement, Sale Deed, and possession certificate may be accepted for mortgage. Revenue documents like Khatha, tax paid receipts should also be deposited. Legal Advisor should clearly indicate the documents that are to be accepted in original, certified copies or photocopies for deposit.


The following transactions and matters mentioned below will not appear in an Encumbrance Certificate furnished either in Form 15 or Form 16 by the Sub-Registrar exercising relevant jurisdiction.

Oral Tenancy.
Litigation in Courts (Lispendens).
Tax liabilities.
Unregistered mortgage by Deposit of title deeds.
Prior unregistered agreements.
Oral partition/Family arrangement.
Oral gift under Mohammedan Law.
Unregistered Will.
Rights and Interests held through Partnership Firms, Association of Persons, Societies including Co-operative Societies, Companies etc.
Unregistered agreements, M.O.U's, General Power of Attorney etc.,
Rights of third parties not directly recorded in documents.
Orders and Decrees of Courts, Statutory and Tax Authorities.

Rights through possession, Part Performance, Equitable Title under Section 53-A of the Transfer of Property Act 1882.

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