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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