Monday, 24 February 2014

THE LEGAL SCRUTINY REPORT MUST BE FOR A LONGER 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 upto 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.  This period would only remove the possibilities of adverse possession, where a person other than real owner would have been in actual, peaceful, open, continuous and exclusive possession of immovable property for a period of twelve years or more in total denial of title to the true owner, in such situations, such occupant of the property would get title to the property by adverse possession. Apart from adverse possession, there are other situations which have to be examined to arrive at the title.

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 limitation period for redemption of mortgage is 30 years.The mortgagee transfers the mortgaged property to another person after 29 years without the knowledge of the mortgagor. Subsequently the mortgagor comes to know of this transaction.He has right to file a suit for recovery of the mortgaged property from the purchaser and the limitation period is 12 years.The mortgagor may prefer such suit within 42 years after the date of mortgage (30+12).

By examining the title and encumbrance certificates for 13 years, advocates would not be in position to trace the mortgage created earlier to 13 years, or any document executed earlier, or the claim of the Government.  As such it would be preferable to trace the title for a minimum period of 42 years. This is only a minimum period and depending upon particular case tracing has to be done for more period.

Origin or First owner
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 are called as mother or parent documents.The partition deed, gift deed, release deed, settlement deed, power of attorney are not mother documents.

Flow of the property
Subsequently, the property generally changes hands by various modes like sale, gift, partition, inheritance.Each change of the ownership has to be traced with the help of transfer document.The sequence should be in chronological order continuous and unbroken. Any missing link has to be carefully scrutinised by referring to the records at registering offices,revenue records and recitals in other documents and if possible by ascertaining from the parties concerned. Nothing should be presumed and left to chance.The flow should be up to the ownership of present owner. The right of each intermediate owner to transfer the property should be thoroughly checked.

Present status / Current owner
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 properties of joint hindu family requires extra care.  Though the Kartha 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.

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.

TRANSACTIONS NOT REFLECTED TO IN AN ENCUMBRANCE CERTIFICATE
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.

1. Oral Tenancy.
2. Litigation in Courts (Lispendens).
4. Unregistered mortgage by Deposit of title deeds.
5. Prior unregistered agreements.
6. Oral partition / Family arrangement.
7. Oral gift under  Mohammedan Law.
8. Unregistered Will.
9. Rights and Interests held through Partnership Firms, Association of Persons, Societies including co-operative societies, Companies etc.
10.Unregistered agreements, M.O.U’s, General Power of Attorney etc.,
11.Rights of third parties not directly recorded in documents.
12.Orders, and Decrees of Courts, Statutory and Tax Authorities.
13.Rights through possession.Part Performance, Equitable Title under Section 53-A of the Transfer of Property Act 1882.

THE DOCUMENTS LISTED BELOW ARE REQUIRED IN GENERAL FOR LEGAL SCRUTINY REPORT
(A) B.D.A PROPERTY:

1. Amount paid receipt issued towards the payment of value of site by B.D.A. to the allottee.
3. Lease cum sale agreement.
4. Possession certificate
5. Absolute sale deed
6.Khatha Certificate
7. Latest tax paid receipt
8. E.C. from date of allotment till date
9. Khatha extract
10. Building Plan (if any)

(B) CONVERTED LANDS:
2. Conversion Order
3. Zonal regulation map
4. RTC from 1967 till date
5. Relevant mutation records.
6. I.L. & R.R. records
7. Nil tenancy certificate
8. Nil acquisition certificate from the competent authority.
9.Endorsement from Tahsildar confirming that there is no case pending under sec.79(a) and (b) of KLR Act.
10.Village map/Survey map/Tipny/ Akar Bandh/Atlas
11.If the sites are formed, approved layout plan to be obtained and  sketch fixing the sites on the survey map to be obtained.
12.If the converted land falls within the purview of C.M.C. OR B.M.P., betterment charges to be paid
13.Khatha from the concerned authority to be obtained.
14.Latest tax  paid receipt.
15.E.C. for the relevant period till date.

(C)B.M.P. LANDS:
 1. Mother deed to trace the origin of property / All other relevant conveyance deeds.
2. Betterment charges paid receipt (if applicable)
3. Khatha certificate
4. Khatha extract
6. Latest tax paid receipt.
7. E.C. for the relevant period till date
8. If it is basically a converted land, the documented listed in (c) above are required.
9. City Survey records;
a.    P.T. sheet
b.    Field book register
c.    P.R. Card
d.   City survey enquiry report
 FLATS:
1.Mother deed to trace the origin of property / All other relevant conveyance deeds.
2.Betterment charges paid receipt (if applicable)
3.Khatha certificate
4.Khatha extract
5.Sanctioned Building Plan from competent authority.
7.E.C. for the relevant period till date
8.If it is basically a converted land, the documents listed in (c) above are required.
9.Commencement and occupancy certificates.

Other than tracing the title of the property, if the property is held by a Company, Partnership firm or Trust, the following documents are required:

 COMPANY:
 1.Memorandum & Articles of Association of the company.
2.Incorporation certificate.
3Resolution passed by the company for sale / purchase of property.

PARTNERSHIP FIRM
 1Partnership Deed of the firm.
3.Acknowledgement of registration of firm.

TRUST
 1.Regd. Trust deed

2.Resolution / Authorization letter among trustees authorising members for
sale and purchase of property.

For more details,

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