Mortgage of Immovable Property

 Leading advocate in Bangalore | property lawyers | real estate lawyers in India

Every creditor wants the money lent by him to be secure so that in case of the borrower's failure to repay the amount borrowed, he may rely on the security.

Immovable property is a good security. This is not perishable and not subject to wild fluctuation in the market. Creditor particularly banks and financial institutions insist on immovable property either as primary or collateral security.

The method of taking the immovable property to secure the payment of the money lent is Mortgage.

The Transfer of Property Act (Act IV of 1882) deals with Mortgage. The relevant sections are 58 to 104 of Chapter IV.

The mortgage in simple terms means transfer of the interest in the immovable property to the creditor to secure the payment of money lent. It is essential that both the parties, the owner of the immovable property and creditor, are living persons. The living persons include company or association or body of individuals. They may be incorporated or not.

The immovable property, the interest of which is transferred to the creditor, must be specific in description with boundaries. It should be easily identifiable.

The debt or money lent is an important component of mortgage, It  is the payment of the debt, which is secured.  The debt may be money advanced, or to be advanced, or existing or future debt.

It also covers the performance of an engagement, which may give rise to monetary liability. The purpose of the mortgage is to secure the payment of money lender to be lent.

The person who transfers the interest in the immovable property is Mortgagor. Generally, Mortgagor would be borrower who is the owner of the immovable property. But any other person may also transfer the interest in this immovable property to the lender to secure the payment of money by the borrower.

The person to whom the interest in immovable property is transferred is mortgage, who is creditor or lender. The principal money and the interest, the payment of which is secured, is mortgage money.  The document executed by the mortgager transferring the interest in immovable property to the creditor is called Mortgage Deed.

Persons competent to create a Mortgage

Any person competent to enter into a contract can create a mortgage. This excludes minors and lunatics. Guardian of a minor on obtaining permission from the Court can create a mortgage. Joint owners of property, partners of firm, Kartha of Hindu Undivided Family, can create mortgage.

In case of joint owners, all the co-owners, all the partners in case of a partnership firm, and in case of Hindu Undivided Family all the male members, widows of the deceased male members, and daughters who have been conferred property rights by the state government have to sign the mortgage deed.

Types of Mortgage

1 .        Simple Mortgage 2.  Mortgage by Conditional Sale  3.  Usufructuary Mortgage.  4.  English Mortgage  5.  Mortgage by Deposit  of Title Deeds  6. Anomalous Mortgage

Simple Mortgage and Mortgage by deposit of title deeds are popular types, which are discussed here.

Simple Mortgage

Section 58 (b) of the Transfer of Property Act, defines the simple mortgage/Registered Mortgage

1.            There is transfer of interest in the immovable property to the mortgagee to secure the payment of money lent.

2.            There is no delivery of possession of the immovable property to the mortgagee.

3.      Mortgagor binds himself personally to pay the mortgage money.

4.      Mortgagor agrees expressly or impliedly, that in case of his failure to pay the mortgage money as agreed, the mortgagee (creditor)has right to get the immovable property mortgaged/sold and the sale proceeds is to be adjusted towards the payments secured.

It is to be noticed that the borrower binds him personally to repay the amount borrowed. Only in case of his failure to repay the money, right to get mortgaged money arises.

It is very important to note that the act uses the words "cause to be sold", which means the property can be sold only through intervention of the Court.

The deed of simple mortgage requires to be attested by two witnesses. It also needs to be properly stamped. Registration is necessary if the principal amount is Rupees one hundred or more. Only the principal amount is the criteria and not the interest.

The stamp duty payable on simple mortgage is Ad valorem that is based on the value. It varies from state to state. Stamp duty payable in Karnataka is 3% on the amount secured with a maximum of Rupees three lakhs. Registration charges are 2% of the amount secured with a maximum of rupees two lakhs.

Certain states including the State of Karnataka have exempted/given concession in stamp duty and registration charges in case of agricultural loans.

The remedies available under simple mortgage are personal decree against mortgager and decree for the sale of the mortgaged property. The limitation is twelve years from the date when the mortgage money becomes due (Art. A 62 of Limitation Act).

Mortgage by Deposit Of Title Deeds

This is also known as equitable mortgage. Section 58 Clause (F) defines the mortgage by deposit of title deeds. In this type of mortgage the mortgager delivers the documents of the title to the immovable property to the creditor in notified places with intent to create security thereon. The essential features of the mortgage by deposit of title deeds:

1 .    The debt: The money, the payment of which is secured may be an existing debt or a future one. It may also be a performance of engagement, which gives rise to monetary liability.

3.         There must be deposit of title deeds. The Mortgager (the borrower/owner of the immovable property) delivers the Documents to the title immovable property to the mortgagee (creditor). The delivery may be physical or constructive. The documents delivered should be of title to the immovable property. This refers to the documents, which establish and confer the title of the immovable property to the mortgagor. It is to be noted that copy of a document is not a document to the title. But certified copy of a original document shown to be form is a document to the title. But as far as possible only original documents should be accepted for deposit. If any original document is reported to be lost, proper enquiries should be made. Property documents are of two types : Primary documents and Secondary or Supporting documents.

Primary Documents:

These documents confer title. These documents to the title Sale Deed, Gift Deed, Partition Deed, Exchange Deed, Deed of Grant, Lease Deed, Sale Certificate, Share Certificate or Membership Certificate with allotment letter, in case of Society with no objection letter, Patta of land.

Secondary/Supporting Documents: These documents do not confer any title, but only support the title conferred by the primary documents. Katha Certificate, Tax Paid receipts, Encumbrance Certificate, Revenue Records and Village Records, allotment letters, amount paid receipts, possession certificates, tax assessment order etc., fall in the category of Secondary/Supporting Documents.

Deposit of Documents

Documents must be deposited/delivered in notified centres: The Transfer of Property Act mentions the towns of Kolkata, Chennai and Mumbai as notified centers. In addition, state government may notify any places as notified centers for deposit of title deeds. At present most of places up to the level of Taluk centers are notified centers. This restriction applies only to the places where the documents are to be deposited, but not to the place where the immovable property is situated. Documents of the property located in Mangalore may be deposited in Bangalore. Documents or the property situated in non-notified places may be delivered in notified places.

Deposit must be with an intention that the title deeds shall be security for the debt. The intention is very important. It must be with intention that the title deeds shall be security for the debt.

Documents delivered for safe custody to obtain legal opinion will not establish such intention.  As such a forwarding letter stating that the documents are delivered with an intention to create a security for the debt is to be obtained from the mortgager. Care should be taken not to mention the amount of debt, rate of interest in the letter.   Such letter should be obtained subsequent to the date of depositing the title deeds and dated accordingly. These measures obviate implications of Stamp Duty/ Registration Act.

Deposit must be by a Mortgagor or his agent with the Mortgagee or his agent.

This type of mortgage is treated at par with other legal mortgages and shall have priority over the mortgages subsequently created, and even registered.

This mortgage will be in force so long as title deeds deposited are in possession of the mortgagee. If the mortgagee parts with the possession of the title deeds, the mortgage is extinguished.

Registration

This type of mortgage and the letter evidencing the deposit of title deeds in the nature of forwarding letter, acknowledgement does not attract stamp duty and registration (Sec. 59 of TP Act). However, certain states like Maharashtra, Gujarat stipulate that even the mere deposit of title deeds with forwarding acknowledgement letter needs stamping and registration.

If the terms of the contract or the deposit of title deeds are reduced to writing such memorandum in Karnataka attract stamp duty and 1% of every Rs. 5000/- that is Rs. 50/- with a maximum of Rs. 50,000/- Registration charges are 0.5 % with a maximum of Rs. 10,000/-

Urban co-operative banks have concession of 50% on stamp duty and registration fee. This type of mortgage is popular, as it is easier, quicker, less expensive not subject to stamp duty and registration formalities except in few states and there will not be undue publicity. The concession available to urban co-operative banks if extended to all banks may help many borrowers. The remedies available to the creditor under this type of mortgage are

Personal   decree   against   the mortgagor

•            Right to sale with the intervention of the Court

•            Right to appoint a Receiver with the intervention of the Court.

•            Right to take possession with the intervention of the Court.

Limitation available is 13 years under   the   Article   62   of   the Limitation Act 1963. When the mortgage is created by a limited company over its property such mortgage must be registered with the registrar of companies within 30 days of its creation irrespective of the type of mortgage.

Right of Mortgagor (Sec 60 of TP Act)

Mortgagor after fulfilling his part of the Contract, that is by paying the money secured, may require the mortgagee to deliver the mortgage deed, all documents relating to the mortgaged property,

•               If the mortgagee is in a position to deliver back the possession and execute required document.

•               At the cost of the mortgagee. This right of the mortgagor is called Redemption of Mortgage.

However, such right of redemption can be invoked before the mortgagee files a suit for enforcement of mortgage.

Limitation period available is 30 years from the date on which the mortgager performs his part of the contract, paying the money secured. (Article 61 (a) of the Limitation Act, 1963.

Tips on House Purchase

senior advocates in Bangalore | Best advocate to verify property legal documents in Bangalore

                                                

House is the place where we spend most of our lifetime. A married person after securing a job or settled in business thinks about having his own house. What aspects he should consider to have his own house is discussed in this article.

The first thing that comes to his mind is whether to have an independent house or a flat in an apartment building. Advantages and disadvantages of an independent house or a flat is to be considered by him and a decision taken.

If he decides to have an independent house, several points are to be considered.

IndependentBuilding

In the earlier days and even now many people prefer to have independent house according to their own requirements, and do not like to live along with others in an apartment building. If we want a BDA site, it takes many years to get a site. Also, the site allotted may be far away or in a place not liked by the applicant. It may not be in the area where we are working or the school where our children are studying. Some people may think that a BDA site is an asset and will fetch good value later. Such people make application to BDA for a site as an investment. The other source to have a site is to become a member of a housing society which is developing or proposing to develop a layout in a suitable location. Scandals in housing societies is common and the price of the site, compared to BDA site, will be higher. Whether the site to be allotted is an approved site, or site formed in a civic amenity site illegally, or in area not approved by BDA, is to be carefully verified. If BDA site or housing society site is not considered, a resale authorized site will have to be purchased .for which market price is to be paid.

If an hereditary house or portion of a house or site comes to their share, whether it is suitable to their present status is to be seen. If not, he has to take another site to build his own house. Some people get a residential site as dowry from in-laws and if it is suitable for them they may decide to construct the house in that site.

ApartmentBuilding

If it is decided to take a flat in an apartment building, it is to be decided whether to buy a flat in an apartment in a central area or a new apartment far away from the central area. The apartment in the central area will be costlier, but will be convenient for reaching the work place with good civic amenities.

One more aspect to be considered is whether the plan for the apartment building is sanctioned by the competent civic agency, whether it is built without deviations from the sanctioned plan, and whether it is more or less according to their requirements. The monthly maintenance charges to be paid, whether the apartment is maintained well are the other aspects to be considered.

Location

 Location of a site or flat is to be decided according to the nearness of the work place, or if the children are studying in reputed schools nearness to the school is an important consideration to be kept in mind. The parents like that the school to be nearer to the house to leave the children to school and bring them from school. If the children are sent in a school bus, a lot of time is wasted for picking up or leaving the children living in various places. Some people who attend recreation club regularly may select the house nearer to their club.

Status of the locality in which they require house and the area without criminals, are the other points for deciding the location of house.

Size of the House/Flat

The requirements in an independent house or flat is to be decided before investment. The number of bed rooms required, sizes of the rooms, children's room, guest room, etc and whether they can afford to have bigger built up area, etc are to be decided. If it is decided to get returns from an independent building in addition to their living, whether it should have more than one dwelling unit to let out to tenants, or whether to provide commercial space in the front portion of ground floor or entire ground floor is to be decided. If more than one residential unit is proposed access to the rear unit or to the upper floors through a common / independent staircase, is to be decided while designing  the building.

People, who have only one house and more than one children, will have to think about the sub-division of the room for the children. Whether the portions are to be front and back, or floor wise, or width wise is to be decided. The building design will be according to these requirements.

Architect / Draughtsman

After working out requirements, whether to engage an architect or a draughtsman to prepare the house design is to be decided. Architect's design will be with good elevation, better arrangements of rooms for good internal appearance, no wastage of space, etc. Many people hesitate to pay professional charges to architects. The draughtsman, who may be a retired draughtsman / lower level engineer of PWD or architect's office prepares simple designs according to the requirements of the property owner, and will revise the plans several times till the client is satisfied. Revision of designs several times is not easy when architects are entrusted. The architects feel that the clients are ignorant of architectural principles and try to argue. The charges to be paid to a draughtsman is very less compared to the architect's fees.

Some of the architects do not agree to prepare working plans for deviations from the sanctioned plans or give concurrence for making violations as they are bound by professional ethics according to the bye-laws and regulations of the Council of Architecture. There is the risk of cancellation of registration as an architect and blacklisting by the City Corporation if a complaint is proved for involvement of the architect in violations made not conforming to sanctioned plans.

Ventilation

Provision for natural ventilation is an important requirement in the design of buildings. Of late this requirement is ignored and artificial ventilation is provided in the form of air-conditioning or use of electrical lights during day time. When there is shortage of electrical energy due to heavy demand compared to supply from conventional sources, ignoring natural ventilation in building design is bad. Architects may have to realize this aspect and provide for natural ventilation in buildings.

Privacy

Privacy is required in a house from road side and neighbouring buildings. Within the house also privacy is required. In the common designs, entry to the bed rooms and kitchen is provided from the living room. It is awkward for anyone to go to a bed room when guests are present in the living room. Providing windows of bed rooms towards living rooms is also not correct as they are forced to close the window through out or cover with curtains. Above the eye level ventilators are to be provided in bed rooms towards living rooms. Windows on the outer walls should not be just opposite to the windows of the neighbouring buildings for privacy.

Parking

A garage is to be provided in the back or right side of the building according to Building Bye-laws, or as a part of the building.  In a corner site, it is to be provided in the diagonally opposite side of the road junction. The building promoters get different ideas in the location of a garage. Some want it on the front side to convert it for commercial use to earn rent. Others do not want to provide car parking within the site to utilize maximum floor space, and they are prepared to park the vehicle in front of their house on the roadside. It is common to see vehicles parked on the road side. Required parking space in the ground floor on stilts is the best way to provide car parking space safely and to provide for additional parking space in the future, or for use of tenants.

Vaasthu

In the earlier days, religious minded people used to follow vaasthu principles in the design of houses. Nowadays, vaasthu principles are not relevant as BDA sites do not conform to vaasthu principles like sites should face roads on east or north. Since about two decades, vaasthu principles are being insisted on in the design. Now, every astrologer feels he is a vaasthu expert and is advising his client. This is providing the astrologers additional scope for practice. They create an impression that the house dwellers will have peace of mind and will lead a good life if vaasthu principles are followed. One may like to ask the vaasthu experts whether all those whose houses are not according to vaasthu are suffering, and whether all those who have followed vaasthu are happy. Are not people living happily in developed countries and Islamic countries, where they do not follow vaasthu. But, some people feel when they are in trouble, that for not following vaasthu such a thing has happened.

One Commissioner of Karnataka Housing Board, who is still in service, directed the panel of architect firms to design KHB houses conforming to vaasthu principles. He himself had no belief in vaasthu. But his problem was that many of the buyers of KHB houses verify whether the houses are according to vaasthu. The Commissioner felt that if vaasthu principles are followed KHB will be able to sell more houses.

Gardening

Environment conscious people feel to provide space for gardening in the house. Some of them get good landscape done and enjoy sitting outside in the lawn. In these days of global warming problem such houses with greenery will help in improving the environment. Water available from rain water harvesting may be used to maintain the garden.

Balcony

 Open balconies were not considered for FAR calculations according to earlier master plans. But according to Zoning Regulations of Master Pan -2015 open balconies are also included in the FAR calculations. FAR is calculated by multiplying plinth area and number of floors including balcony and staircase which were excluded in all the earlier zoning regulations. To compensate for deletion of balcony and staircase, additional FAR of 0.25 is given in the Master Plan -2015. The intention for this revision is to simplify FAR calculations, and to stop the violation of covering open balconies and including them as part of adjoining rooms.

Security

Apartments are safer compared to individual houses. Twenty four hours security is provided in the apartments. Concentration of many people in the apartment will provide support to a family in case emergency. The height of the apartment with open space all round will avoid the entry of criminals. Independent houses are risky nowadays as Bangalore has become a large city and housebreaking and thefts are taking place every day according to news paper reports. It is also being mentioned that Bangalore is becoming a crime capital. It is safer to provide strong doors in the outer walls with more than one locking arrangement. Metal grills to the windows and ventilators is a must.

Kitchen and Bath Rooms

In most of the apartments we see dark kitchens and bath rooms without proper natural ventilation. Natural ventilation is required in kitchens to avoid suffocation to house wives during cooking. Bath rooms require good ventilation for healthy conditions. One wall at least of kitchen and bath rooms should be an outer wall where ventilation could be provided. 

Plumbing

Plumbing system requires careful planning to avoid frequent repairs due to corrosion of the G.I. pipes. If the pipes are embedded in the floor or walls with tiles, it is costly to repair the floor and walls and replace the tiles and fittings. In case of apartments this is more complicated in view of the procedure that the lower flat owner has to get the repairs and replacements done in the upper flat where the repairs are necessary. If this is not done, the roof and walls of the lower flat will have dampness which is unhealthy. Many a time the upper floor flat owner delays taking a decision to get the repairs done and will insist that the work should be done as it was before. Misunderstanding between the flat owners concerned is common. It is therefore desirable to use P.V.C. pipes in the new buildings and avoid embedding of pipes.

Conclusion

People should consider all the above facts before having an independent    house or a flat with  good appearance, comfortable, and safe.

Investment in immovable property

property lawyers in Bangalore | lawyers in Bangalore | senior advocates in Bangalore

Man does not live only for food, cloth or shelter or for himself. He has certain social responsibilities to provide for his family and also for himself in his old age. This naturally makes him save some portion of his earnings and invest in lucrative portfolios. After the basic needs of food, cloth and shelter are fulfilled he strives to improve his standard of living and to enjoy the fruits of his hard earned money.

Investment avenues are many. But, the Investor should be prudent enough to select a proper area, which is safe and secure, with assured reasonable returns. Earlier, the Bank deposits, stocks, mutual fund, insurance policies and bullion were most opted. With increased business, globalisation of economy has unfolded many more areas. The investment has become very complex which has led to the emergence of specialised investment Advisers.

Bank deposits, insurance policies and mutual funds have become unattractive because of low returns and failure of many companies. Stock market is unpredictable and volatile. Moreover, these investment avenues are for short-term which need close monitoring. Further, the quantum of investment is generally small.

In recent, past real estate has emerged as a safe and high yielding investment opportunity. Investment in real estate is a long-term invest­ment and needs a considerable amount. It is not only financial, but also a sentimental and emotional investment.

The liberalisation initiated by the Government has opened up the hitherto dormant Indian economy and many Multi-National Companies have set up their offices in major metros. The improved pay packets of vast middle class population have opened many investment routes. The desire to own a roof over their head as early as possible and the migration of rural people to urban centres in search of assured income jobs has further expanded the real estate market.

However, as the demand exceeded supply, many fly by night operators appeared on the stage and indulged in speculation and an artificial price spiral, which resulted in crash of real estate market in latter half of 1990. But now, the market has regained its potential. Only serious Vendors and Endorsers are operating in the market.

The yield in the realty market has to be calculated on the capital invested and the annual rental returns less property tax, income tax and annual maintenance charges. This return varies according to the type of property i.e., residential, commercial or office space. In Bangalore, the returns are about 8% for residential, 12% for office space and for commercial space 12 %. There are certain determining factors, which play a crucial part in the property invest­ment.

Where to invest? In other words it is location. There is equal demand for all types of space in metropolitan cities and market trends are more transparent on an account of competi­tion and frequency of dealings. But, smaller towns have potential of increased returns because of dearth of space. Local politics also plays its role in determining the returns in small towns.

Huge Investment:

Investment in real estate needs higher amount and the minimum entry level will be in multiples of lakhs, it would be about Rs. 20 lakhs for residential and much more for office and commercial space.

Time factor:

The sale of property requires long time for finding a suitable Purchaser and for comply­ing with the legal requirements. Further, the appreciation of capital value of the land is slow but, will be certain and stable unlike in stocks and shares.

Local Laws:

The realty investment calls for more discretion and involves complicated processes like title verification, land  use according to Local Laws, Floor Area Ratio (FAR), restriction on sale for some period and many more Laws and rules depend­ing upon the political environment.

­Tax factor:

Uncertain tax rules and rates which vary every year need to be considered. Property tax is an annual commitment, in which it is being increased every year by self-assessment or capital based assess­ment. Rental income also attracts income tax to be paid annually; sale of property attracts capital gains and purchase invites Stamp Duty and Registration charges. Property tax & Stamp Duty varies from State to State.

Type of property:

As stated earlier, the type of property is also very important. It may be residential, commercial or office space. The demand and supply position of each sector needs to be carefully exam­ined. Residentialproperty calls for smaller investment. Commercial and office space needs higher investment.

Type of returns:

Real estate sector offers two types of returns namely:

(i)                 Monthly return in the form of rentals and the returns on the lease amount invested in the Bank securities or in business and

 (ii) The other type is the sale consider­ation on sale of the property. The amount to be invested also depends on the mode of returns expected. Generally, leasing of property is attractive only for business people. Lease amount does not attract interest. Commercial property and office space yield high returns to the extent of 15% whereas the residen­tial property yield is about 8%.

Risk Factor and Limitations of Legal Scrutiny:

Tracing the title of the property is the most important step in purchasing the property, which has to be done by an Experienced Advocate who is well-versed in Property Laws. Property Laws are very complex and vary from State to State. Further, many times the age-old records needs to be examined which may not be available with the parties or even in the Jurisdictional Sub-Registrar's Offices. Further, Legal Scrutiny is based on the documents that will be produced for the verification. However, it is not the duty of the Advocate to certify the genuineness of the documents from the concerned departments. Honesty and integrity of the Seller is very important. Certain hidden facts like pending cases, prior agreements and Govern­ment notification of the property cannot be traced easily by verifica­tion of the documents. However, paper notification about purchase of property would help to unearth some claims.

Liquidity:

Investment in real estate cannot be immediately converted into cash unlike stocks, deposits. However, the property is most sought after security for Bank loans and rents may be securitised by obtaining loans from the Banks.

Maintenance charges:

Property needs periodical maintenance, which involves a considerable amount.

Landlord Tenancy problem:

Most of Indian Laws are pro tenant offering maximum protection to the tenants. But, gradually they are being amended to strike a fine balance and even now, it takes much time to evict a tenant, who has defaulted in payment of rents or who has violated the terms of agreement.

Political Environment:

Government has maximum control on real estate sector. Sale or purchase of agricultural land has many restrictions in Karnataka. Land use restrictions exist in many towns. The major source of revenue to the Government is from the immov­able properties in the form of Stamp Duty and property tax. In case of acquisition by the Government, the compensation paid is much lesser than the market value.

Price cycle:

It has been observed that, the real estate has regular ups and downs where the prices go on increasing for some period and slide down for some time. But, this cycle is a long-term trend. Though the investment is huge, the Investor needs to be in patience to have a good return which takes a long time. It would be suicidal to expect appreciation in short run. Two components, the building and the land move in opposite directions, the building value gets depreciated and the land value gets appreciated.

Other factors:

Some factors are remotely linked to this sector and play a crucial role in determining the price. Introduction of one-way traffic and construction of flyovers near the property decreases the value of the property. Vaastu, nowadays, has become important. Another area of concern is want of information in the property market. The available information is too insufficient and often contrast­ing. Even the transactions recorded in Registrar's Office will not reveal the real price of the property as the amount other than what is mentioned in the document might have been paid.

Rental Income:

The rental income from the properties is in the range of 0.5% to 1% p.m. on the investment. Apart from this income, the value of the property appreciates regularly, whereas in the case of Bank deposits, the value of the money deposited gets eroded on account of inflation. The investment in agricultural properties and farm houses are not remunerative. The income from the agricultural property is seasonal and depends upon the weather and climatic conditions. Further, the sale of agricultural properties has many restrictions. The farm house demands good maintenance which proves costly and many times the income from there may not even meet the maintenance charge. The investment in real estate is a better option.

Real estate is the only sector which yields better returns apart from capital appreciation provided the Investor is prudent and has taken necessary precautions.

PROPERTY POSSESSION RIGHTS

Advocate Selvakumar | property advocates in Bangalore | advocates in Bangalore

Possession In essence means holding an immovable property in possession with or without title of ownership. It is a continuous act of claiming exclusive use of the property as if the holder owns the property to which he may or may not be having right of ownership. Possessions are of various types. Adverse possession, symbolic possession, possession under an irrevocable power of attorney, possession under lien and possession under part-performance of a contract are a few important ones.

A person in actual possession of an immovable property has certain right and interest in the property he is holding. The possessor has such a strong control over the immovable property that he can keep others out from occupying it. Unless otherwise proved, possession may be taken as title of ownership. Mere possession of an immovable property does not mean that the person is the real owner of the property.

Holding a property after a decree is passed for vacating it, even after enough time is given for vacating the premises, is illegal and cannot be termed as permissive possession, ownership are not one and the same. Possession means not only physical possession (or constructive possession) of a property but also full control over it. Occupation means the right to hold and occupy a property. Ownership means lawful possession of a property which may not come with actual physical possession of property.

A landlord gives his agricultural land to a tenant for cultivation. Though the property is the same, the rights enforced are different. The landlord possesses the land without occupation and the tenant cultivates the land without possession. The mere right to cultivate does not confer the right of possession on the tenant.

Similarly, In a mortgage, the tenant as the mortgagee is in actual physical possession of an immovable property and the landlord as the Mortgagor is the true owner of theproperty. Here the mortgagee possesses the property without ownership and the Mortgagor owns the property without occupation. Possession is temporary. Ownership is permanent.

Adverse Possession means a person possessing an immovable property which is unfavorable, unhelpful or harmful to the interest of the rightful owner. Adverse possession is possession of a property by a person on his behalf or on behalf of some other person on which the true owner has a right of immediate possession. If, however, the true owner does not enforce his right within the time limit stipulated under Law of possession of the property becomes adverse to the true owner. The result is that the true owner not only loses his right, title and interest in the property but also cannot maintain a suit in a court of law.

Possession must be hostile in total denial of the title of the true owner. The Possessor must be in actual possession of the property under a claim of right. The property must be in his continuous possession and the people in the neighborhood must know that he has been staying on the premises peacefully and continuously for a long period of time and paying taxes in his name so as to show that the title of property is adverse to the true owner. It must be open and hostile enough for the interested parties to come to know of it.

A person, who exclusively holds an immovable property physically, openly, peacefully and without interruption by the true owner for a period of 12 years or more, is considered to have acquired the ownership and title of the immovable property by adverse possession. The expression adverse possession indicates a hostile or unfriendly possession, which is either expressed or implied by open denial of the title of the true owner.

Adverse possession is a one- sided act. Therefore, it cannot be documented. A person holding a property for a long time does not mean that title of the property can be denied to the true owner. Possession turns adverse only when the rights of the possessor and the true owner do not match. The person holding possession of the land should hold the same on his own behalf or on behalf of some person other than the true owner, while the true owner all along has a right of immediate possession of the property.

Further possession to constitute adverse possession should be exclusive and actual physical possession. It is not at all necessary that the true owner should have actual knowledge of the adverse possession so long as it is open and the interested parties have knowledge of it. Also, it is not necessary that the person claiming the title of adverse Mr. A, who claimed to be a 'thika tenant' since 1966 was renting out the property to tenants. However, he had all along been claiming to be the attorney of Mr. B. It was only since 1975 that Mr. A started depositing rent in his own name. Mr. A filed a suit in 1982 for permanent injunction seeking to restrain the owner from taking over the property from him. The court heard Mr. A's case and held that Mr. A had been a trespasser on the property, but started asserting his rights only from 1975 and not earlier. The court held that the suit filed in 1982 was pre-mature, as at the time when the suit was filed, Mr. A. was not in adverse possession of theproperty for 12 years.

REGISTRATION OF DOCUMENTS OPPOSED BY PUBLIC POLICY­­

Advocate Selvakumar | property advocates in Bangalore | advocates in Bangalore

Can a registration of a document be claimed as a matter of right? Indian Registration Act, 1908, has under section17 prescribed certain documents which are compulsorily registerable and under section 18, the documents, the registration of which is optional. As such can anybody claim as a matter of right, registration of a document which is compulsory under section17 of Indian Registration Act 1908.Various States have amended the main Registration Act and have framed rules there under.

Karnataka Government has inserted a new section 22-A, with effect from 23.10.1976 which empowers the State Government to prohibit the registration of certain documents as opposed to public policy, by notifying in official gazette, and the registering officers shall refuse to register any such document.

Government of Karnataka through Revenue Secretariat Notification No. RD/141

MUNOMV/2005, date.23/04/2005, has in exercise of powers conferred under section 22-A of Registration Act as amended by Karnataka Act 55 of 1976 has declared registration of following documents as opposed to the public policy. This is effective from 06/05/2005.

1.   Site with or without building in agricultural land which is not converted for non-agricultural purpose under section 95 of Karnataka Land Revenue Act 1964.

2.   Site described as Gramathana site (form no. 9, 10) or other site declared under form no.19 under rules framed under Karnataka Municipality Act 1964, but not actually converted as site.

3.   Site on a revenue land described as Gramathana Site or other site or a site with a building on which no layout plan is approved and a release certificate is issued from local planning authority like BDA, BMRDA, BIAAPA, BMIC.

4. Site on a revenue land described as Gramathana site or other site, fiats, industrial site, commercial site, without requisite permission under section 79A and 7B read with section 109 of Karnataka Land Reforms Act.

Thus the transfer of only the following properties is permitted.

a)Properties falling under Bruhat Bangalore Mahanagara Palike.

b) Properties allotted by BDA

c) Properties in BDA approved layouts

d) Properties in layouts approved by other local planning authorities like BMRDA, BlAAPA, BMIC etc.

In the preamble the notification, it is stated that many properties are registered based on bogus and fabricated documents which do not pass on legally perfect title to the purchaser. In many cases, the agricultural land is transferred by registration as non-agricultural land without actually converting it to a non-agricultural purpose in accordance with Section 95 of Karnataka Land Revenue Act 1964 and Karnataka Land Grant Rules 1989. This has led to haphazard growth of Bangalore and other cities.