Wednesday 29 April 2015

POWER OF ATTORNEY


Power of Attorney


A Power of Attorney means the power or authority given to a person (agent) by an individual (principal) to act on his behalf or on behalf of a group of individuals in business matters or any other matter.

It plays a vital role in transferring the lawful ownership of immovable property like land, building, water source, from one person to another. The person who holds the power is called the Power of Attorney Holder. He is employed by the principal to take care of his dealings with third persons.

A person competent to contract can execute a power of attorney. He can appoint one person or several persons to act on his behalf. Where several persons are appointed as attorneys, it is advisable to mention as to how they will act jointly or independently. If this is not mentioned, then they are at liberty to act jointly.

Power of Attorney, generally speaking, is of two types. Power of Attorney for a single specific purpose is known as "special power of attorney" and the one involving more than one work or transaction is called "General Power of Attorney."

The duration of a special power of attorney may be for a particular period or for an indefinite period until the task is completed. A general power of attorney may continue to be in force until it is revoked or by death of either party. A registered power of attorney can be revoked by a cancellation deed.

Though, in general, a power of attorney is revocable, it cannot be done so in matters pertaining to debt security till the debt is cleared even though the debtor is not alive. It can be revoked if the principal becomes of unsound mind or he is declared insolvent. It cannot be revoked if it is made irrevocable. However it should be registered by paying applicable stamp duty.

Power of Attorney attracts various provisions of The Indian Stamp Act, Powers of Attorney Act, Registration Act, The Indian Contract Act, and Indian Partnership Act, and The Indian Evidence Act.

A power of attorney is divided into ten categories according to the stamp duty payable.

It is significant to note that a power of attorney by a promoter to a builder for construction of apartments under flat ownership scheme, attracting stamp duty according to the value of the property, has been added by an amendment to the Stamp Duty Act. In Karnataka, presently stamp duty is 2% plus registration charges 2% for the promoter GPA.

A power of attorney is given for a court case, for appointing one attorney in place of another, for collection of debts and for admitting execution, and a general power of attorney is given for selling shares, to execute a sale deed, to prepare a layout and sell plots, to raise money through mortgage of property, to recover rents and many other acts.

A power of attorney need not be registered except where an immovable property is involved. According to the Registration Act if, a power of attorney gives power to   present   documents   for  registration, then it must be executed before and authenticated by the Registrar or the Sub-Registrar.
If the Registration Act is not in force at a place where the executants lives, then a Magistrate's authentication is necessary.

If the power of attorney is registered outside India a Notary Public, any Court Judge, Magistrate of that country, or Indian Consul or Vice-Consul or a representative of Central government must authenticate it.

A power of attorney is executed in the form of a legal document generally in the first person and begins either as "Know all men by these presents that I..." or "By this power of attorney I,...".

After a brief introduction, the operative part is brought in. Thereafter, the specific powers given to the person are mentioned in separate paragraphs. After these a general clause is added empowering the attorney to do such lawful acts and deeds, as he deems fit and proper in the performance of his duties.

It is the duty of the agent, the power of attorney holder, to act honestly and faithfully on behalf of his principal, the giver. He is legally bound to perform the tasks according to the wishes of the principal. If the agent acts otherwise and the principal suffers any loss, he must compensate the principal. He is bound to keep all accounts in a proper manner and produce it to the principal on demand.
An agent possessing authority to carry on business has authority to do every lawful thing necessary for the purpose.

Being a legal document, a power of attorney must be strictly interpreted and understood. Therefore special care must be taken while drafting the clauses.
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Monday 27 April 2015

Queries on Property matters


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Certain hidden facts like pending cases, prior agreements, government notifications of the property cannot be traced out easily by verification of the documents.  How can these hidden factors be uncovered, and what should a purchaser do to protect himself against these hidden factors?

Rajan Kalyan, JP Nagar, Bangalore

Generally seller hands over the copies of the property documents to the purchaser to examine the title.  Such documents contain only title documents, which may be cross-checked in the sub registrar’s Office.  But they do not disclose any pending litigations, prior agreements which are not registered and government notifications.  As such, the Purchaser should be very cautious and make arrangements for thorough search of records at the concerned jurisdictional Courts to rule out the possibility of any pending cases and also in offices of Urban Development Authorities such as : BDA, BMRDA, KIADB, KHB, High way and other planning authorities etc., to rule out the acquisition notifications, if any.

Further, it would be difficult to verify any existing prior agreements or arrangements which are not registered.  As such, proper enquiries with owner of the property, and also with neighbours may be helpful.  It would always be better to register the sale agreement and get the property registered at the earliest.  Above all, Paper publication of the intention of the Purchaser to buy particular property would help the purchaser to a certain extent.  

What is Paper publication? How does it benefit the purchaser
Shenoy, Rajajinagar, Bangalore

Though the Paper Publication may not be a statutory requirement, yet the idea of getting a notice published in the widely circulated newspaper in the locality, is to elicit the information from the general public that a bona fide purchaser is intending to purchase the property from its owner.  Besides this, the paper notification also invites objections from various interested persons with documentary evidence in support of their claim within the specific period.

Even after issuance of such paper notification, a person said to have his claim to the property does not lose his rights just because he could not disclose his rights in response to such paper notification within the given time. 

I am not able to understand the difference between Khatha Certificate and Khatha extract.  Would you please enlighten me on this ? Could you also brief me about the importance of Encumbrance Certificate?

Veeresh, Uttarahalli

Khatha is a revenue record maintained by the municipal authorities in respect of a property standing in the name of a particular person for purposes of assessment and collection of property tax.  As it is a secondary document in the absence of primary documents like Sale Deed, Gift Deed, Partition Deed, Release Deed, Will, Grant etc., however it does not establish the title in its totality. 

Khatha Certificate is a Certificate issued by the Municipal authority Office confirming that the Khatha of a particular property stands in the name of a particular person/s.

Khatha Extract is an Extract of the tax assessment register maintained at Municipal Office giving complete details of the property like: Area of the site, building, property tax levied, cess and total tax payable, name of the previous and present owner of the property, etc. 

Encumbrance Certificate is issued by Sub Registrar Offices for a specific period as required by the applicant.  It contain the details of the property like: Sy. No. House No. boundaries, and encumbrances on such property like: Sale, Gift, transfer, mortgage, if any, which are registered at the said sub registrar’s office. However, the Encumbrance Certificate do not reflect the encumbrance transactions of deeds which are not registered. 

What is the procedure for Khatha transfer and how do we know that the Khatha transfer Certificate is genuine and original?

Sreenivasa Prasad, Jayanagar, Bangalore

Transfer of Khatha of property to your name is to be done by the concerned jurisdictional revenue authority under whose jurisdiction the property is situated.  For this purpose, you have to apply for transfer of khatha in a duly filled Khatha Transfer application duly signed by both the Seller as well as Purchaser i.e., yourself, and enclose a copy of the registered Sale Deed, latest tax paid receipt and up to date encumbrance certificate along with the necessary fee. 

Thereafter, the authorities do acknowledge receipt of the application and indicate the date by which the process will be completed; however, the entire process is to be required to be completed within 45 days.  Meanwhile, the authorities may also call for certain additional information / document etc., if felt necessary for verification and confirmation.  Thereafter, the Khatha of the property would be transferred into your name and an endorsement will be issued in your name to this effect.  Thereafter, tax paid receipts on such property would be issued in your name, which show that the said property stands in your name. 

As regards ascertaining whether the Khatha Certificate issued is genuine and original or not, the Khatha Certificate is usually issued by the concerned jurisdictional Corporation Office and as such you may directly visit such office and obtain the same to confirm its genuineness and originality.      

Do the financial institutions permit the transfer of loan from one institution to other and what is the fee charged for such transfer and whether it would be better to transfer from one institution to other ?

Sadashiva murthy, Hosakote

Financial Institutions allow the transfer of loan from one institution to another even though they don’t want their existing loan accounts to be taken over by other institutions.  However, such institution which allow transfer of loan account may charge foreclosure charges for such transaction in order to minimize such transfer of loan accounts.  It is left to the customer as to when to transfer the loan from one institution to another taking into consideration various factors of which the major point is to look into the rate of interest besides other benefits which he would get from other institution on such transfer.  After obtaining in-principle approval from the taking over institution or bank, such transfer of loan account is possible. 
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Saturday 25 April 2015

Under – Valuation of Property


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The word under valuation is most frequently used in transfer of property, which is linked to stamp duty and registration charges. It is necessary to understand, the constitutional provisions of stamp duty before embarking on under-valuation. Articles 246, 265, 268, 269(I) are relevant to stamp duty. The Article 246 refers to the powers of Parliament and State Legislature to make laws. The Constitution has union list, state list, and concurrent list. The Parliament has powers to make laws in case of union list, and state legislature has powers to make laws in case of state list and both have powers to make laws in case of concurrent list. The article 265 makes it very clear that no tax shall be levied or collected except under authority of law. Stamp duties are listed in all three lists; with clear demarcations.

Stamp duty and registration charges are a major source of  income to the States. The department of registration and stamp duty in Karnataka is ranked among the top five revenue earners to the State.

The revenue so earned from different sources is utilized for development, administrative expenses of the state. Thus every state aims at increasing its revenue and also to plug any leakage. 

The stamp duty and registration charges are payable on advolerem basis, that is based on the value. There are no maximum stipulations. They increase with the amount of consideration of conveyance of property, higher the consideration, more the stamp duty and registration charges. These charges are to be met by the purchaser unless there is a contract to the contrary. Apart from purchase price, stamp duty, registration charges; the purchaser has to spend to get revenue records mutuated in his name and for transfer of power and water connections to his name. All these expenses work out to about 15% of purchase price. To avoid such heavy expenditure, the parties, disclose value of the property less than its actual market value, thus pay less stamp duty and registration charges. But the purchaser will pay the actual market value to the seller. This process is called under valuation. This modus operandi has two implications;

1.  Loss of revenue to the state.
2. The circulation of unaccounted money.

Both have adverse effects on the National Economy. In order to avoid under valuation, the State Government has come out with a legislation. In fact Karnataka Stamp Act 1957 has certain sections dealing with under valuation. The Section 45-A was inserted in the Karnataka Stamp Act 1957, during 1975 and 45-B  in  1991.

The Section 45-A deals with the procedure to be adopted for dealing with documents, where the properties are undervalued. The parties producing documents for registration have to file the market value of the property calculated in the prescribed Form I. If registering officer has reasons to believe that the market value of the property in the document, which is produced for registration is not truly mentioned, he may arrive at the market value of such property and inform the parties to pay the stamp duty and registration charges according to the market value arrived by him. He may proceed with the registration, if the party pays the stamp duty / registration as arrived by him. If not he may keep the process of registration pending and refer the matter to the Deputy Commissioner along with a copy of the document for determination of the market value of property and proper stamp duty payable there on. For arriving at the market value, the registering officer will use the guidance value published by the committee constituted for estimation of market value under Section 45-B. The registering authority informs the market value as arrived by him in Form 1-A. This gives options to the parties to contest the valuation done by the registering authority, or to agree or to withdraw the document from registration.

The deputy commissioner after hearing the objections of the parties during the course of enquiry shall determine the correct stamp duty payable. The parties have to pay the difference amount.

Many times, the parties agree to pay the stamp duty based on the market value as determined by the registering officer and get the document registered. Inspite of this the parties receive notice to pay the increased stamp duty. The Deputy Commissioner has some special power called suomoto powers; this means on his own. Here the deputy commissioner acts without any reference to him. The time limit is two years from the date of registration. Within two years he may examine any document, and if he has reasons to believe that the correct market value of the property is not set forth in the document, he may determine the correct market value call the parties to pay the proper stamp duty. That is how the parties get notice even after registration process is completed.

In case, the parties are not satisfied with the market value and the proper stamp duty, as determined by the deputy commissioner, they may appeal to the Divisional Commissioner, but have to deposit 50% of the difference amount of the stamp duty as determined by the Deputy Commissioner. In the appeal to the Divisional Commissioner if the stamp already paid by the parties is found to be correct, excess amount deposited (50%) will be refunded. If the determined market value is found to be higher and the stamp duty paid is less, the parties have to pay the difference amount with 12% interest from the date of execution of document. The Karnataka Stamp (Prevention of Under Valuation of Instruments) Rules 1977 deals with the procedure to determine the market value of the property, and the procedure to be adopted for conducting enquires.

The Karnataka Stamp (Prevention of Under Valuation of Instruments) 1977 provides guidelines to Deputy Commissioner, Divisional Commissioner to arrive at the correct market value. The guidance values are general in nature and are for guidance only. The Deputy Commissioner / Divisional Commissioner have to determine the market value of the particular property. They may call for information from any Public Office, Officer, Authority under government or local authority, examine and record statements of Public Officer / Authority under government or local authority. They may inspect the property in question after due notice to the party. Rules provide definite parameters to arrive at the market value, depending upon the nature of property, land, house sites, buildings and other properties.

In case of lands, the nature of land, such as dry, garden, wet, nature of soil, revenue assessment, other factors which influence the value of the property, value of the adjacent lands, annual yield for five consecutive years and nature of crops raised on the land are considered. In case of house sites, general value of house sites in the area, proximity to the railway station, bus terminus, approach roads, market, shops, amenities available, developmental and industrial improvements in the vicinity, property tax valuation, any other factors influencing the value of site, and special features of the site as represented by the parties are the guiding factors. In case of buildings, area of the land, plinth area, built up area, age of the building, materials used, locality, amenities provided, depreciation, property tax, how the building is used, rents received are examined. The appeal should contain, original or certified copy of the order against which appeal is made, original or certified copy of the documents in question and memo of grounds of appeal.

The parties may after exhausting the appeal to the Divisional Commissioner, may prefer an appeal in civil court.

Guidelines Value

The Government constitutes committees to prescribe certain guidance values for the properties located in different areas. These committees are called committees for estimation of property. The values published by the committee are guidelines values for registering offices to determine the market values. They are the average values also. If the value of the property purchased is lower than the guidelines value, the stamp duty and registration charges are payable on the basis of guidance value. If the market value of the property is more than the guidelines value the stamp duty is payable on market value.

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Thursday 23 April 2015

RISKS IN REVENUE SITES


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Agricultural land cannot be directly put to use for residential purpose. It needs to be converted by paying conversion charges. The Special Deputy Commissioner is the competent authority to grant permission for conversion of agricultural land to non - agricultural purpose.

Revenue site is one that is situated in the layout formed on the agricultural land for a non-agricultural purpose without proper approval under the relevant law i.e., Karnataka Land Reforms Act, Karnataka Land Revenue Rules and other provisions of law. 

No building can be constructed on agricultural lands without obtaining conversion orders and layout and building plan approvals from the concerned authorities. Residential layouts can be formed only in the residentially converted land where such a land should be in the residential zone as per the zonal regulations for getting the residential conversion. The Village Panchayath is not the competent authority to approve the layout plans.

ZONAL REGULATIONS

As per zonal regulations of the comprehensive development plan, green belt area is meant only for agricultural activities. Non converted land continues to be agricultural land and there are various restrictions on sale and purchase of agricultural land. In Bangalore Urban Agglomeration, Bangalore Development Authority (BDA) is the competent authority to approve layouts and through this approval road width, residential area, civic other amenities are to be provided as per law. The Bangalore Metropolitan Regional Development Authority (BMRDA) is the regulating authority to approve layouts on the outskirts of the Bangalore. 
All around Bangalore, it is a very common practice for people to buy piece of agricultural land, popularly known as “revenue site”, without being aware of the hassles involved in buying such sites. Sites such as those formed in the agricultural land without getting the layout approved by the competent authority are generally referred to as “Revenue Sites”. Small time promoters misguide the buyers and motivate them to buy the revenue sites. 

MIDDLEMEN RULE

Generally, a nominal sum is paid by the Small Time Promoter as a token advance to the landlord and a General power of Attorney is obtained and thereafter search for the innocent purchasers begins. The middle men like double edged razors hike the price of the land and at the same time do not properly settle the accounts with the illiterate and ignorant land owners. These Small Time Promoters form layouts on agricultural lands without approval of the layout from the competent authority. To increase the saleable area of the “sites” they provide narrow roads. These layouts generally do not have civic amenities and other facilities since the promoters generally do not have any intention of providing them.

MARKETING STRATEGY

The Small Time Promoters know the art of marketing make colorful brochures with photographs of certain parts of Bangalore and paint an attractive picture to attract the people to buy sites in these layouts. Some of them even download foreign photographs of houses from internet for their brochures. Better the presentation deeper the deceit which very few people understand. After The Small Time Promoter gets his money, the purchaser will have the bitter experience. 

These promoters / agents in league with brokers will register some imaginary sites at the sub-registrar’s office using their clout. There are many instances where the lands bearing Khaneshumari number without any link to the old survey number are being registered in the Sub-Registrar’s office by the owners in connivance with the Brokers either by creating or manipulating the existing documents since it is not the duty of the Sub-Registrar to verify the legality of the documents.


In the recital of a sale deed, it is customary to mention how the seller has acquired his title, interests and rights to the immovable property from origin to the end. In the case of revenue sites, the brokers at the office of various sub-registrars have devised a very ingenious method to hide out this fact. They merely mention in the recital that the property is the “ancestral property” of the seller. In this way, the brokers pass on the defective title of the property to the innocent purchasers. 

There are several instances where the land notified for acquisition and the land granted for schedule caste people have been made into sites, where the purchaser of such a site would not get title of the property. 

GPA TRANSACTION
Generally, brokers will take GPA from the landowner for the entire land. Most of the revenue sites are registered on the strength of GPA. Only a very few people take care to check up the legality of the GPA executed by the original vendor. Nobody bothers to find out whether the GPA is registered or not and whether the executor of the GPA is alive or not. 

If the executor of the GPA is not alive, the GPA transaction is totally invalid. A Joint GPA executed by two or more owners would become invalid if any one of them dies. 

Form 9 and 10 

Originally, property falling under the village Panchayath area alone has the genuine site status. Form No.10 is for a house situated within Gramathana area and Form No.9 is for a vacant site situated within Gramathana area. Middlemen and some revenue officials make bogus Forms No.9 and 10 and register immoveable properties in favour of innocent purchasers. 

When the Urban Land Ceiling Act was in force, thousands of revenue sites were registered by merely mentioning in the sale deed the description as one square asbestos sheet house. This was mentioned just to avoid getting the relevant clearance under the said Act after the Urban Land Ceiling Act was abolished the term one square asbestos sheet house was also removed from the real estate agents’ dictionary.

It is not legal to form layouts and sell sites in the agricultural land / green belt area. Even after selling all the sites, RTC (Record of Rights, Tenancy and Crop Inspection) will be in name of the original landowner. 

The Agent being a GPA holder will sell the sites, as “ancestral properties” to the innocent purchaser. The numbers assigned to these sites will never match with the survey numbers assigned to these lands by the government. The purchaser of the revenue site doesn’t get the title of the property. What is purchased is an imaginary site only. If, however, the original owner is good then the purchaser can enjoy the property, till the government regularizes such revenue sites.

LOAN CLEARANCE 

If the title deeds are not clear and does not establish marketable title, it is difficult to obtain bank loans for construction by mortgaging these sites. Generally, these sites are situated on the city outskirts. There will be no proper roads, electricity or water supply. There is no scope for immediate development of the locality. With all this, if the prices of the sites appreciate over a period of years, the original landowner will appear from nowhere and start cultivating the area. He will remove all the boundary stones laid by the broker/small time promoter making it difficult to the purchaser to identify his property. In certain cases the GPA holder sells the same sites to several persons and collects money from all of them. Consequently, marathon litigation awaits the purchaser. The laws are so complex that they give rise to multiple interpretations.

In recent times, litigations pertaining to property transactions are increasing. Common problems involved are that the property might have been sold by one of the Co-owners without arraying the other Co-owners as parties to the sale. After the death of the person, who sold the property his Legal heirs / representatives and the surviving co-owners with an intention to take advantage of the rising prices of their property may approach courts with suits.
The buyers may, therefore, consult a legal expert in property matters before investing their hard earned money.

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Wednesday 22 April 2015

ORAL PROPERTY TRANSACTIONS


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While dealing with properties, you may come across many types of transactions, and encounter documents like Koorchit, 'Memorandum Recording Ear­lier Oral Partition,' 'Memoran­dum Recording Family Arrangement,' Baagappirivinai Kathu and so on.

You will find that large properties have been transacted orally. Such transactions could have taken place in the case of proper­ties owned by you or properties which you intend to purchase. How valid are these transactions? Are these docu­ments valid? Let us see what the law says.

A partition means division of a property. It can also be a specific determi­nation of shares held by co-own­ers. A family arrangement, on the other hand, is a settlement of issues or an arrangement on the basis of claims that may arise regarding the property.

At times, this claim can be no­tional. However, the claims must have a basis. The family arrangement may combine the elements of a partition.
You will find that the docu­ments are not usually stamped and registered. Whether such documents require be stamping and registering is an im­portant issue.

OWNERSHIP TRANSFORMED

Partition is a process by which joint ownership is transformed into enjoy­ment in severalty. Each one of the sharers will have had a prior title. In other words, all the owners are already owners of the share concerned.

The process is determina­tion of the specific share or iden­tification of his or her share by metes and bounds. Therefore, this is not regarded as a con­veyance and there is no conferment of a new title.

One also has to understand as to what is meant by a 'Family' for the purposes of a family ar­rangement. This is vital as the word 'Family' will be interpret­ed depending on the nature of the document and the transac­tion.

For example, the word 'Family' for the purposes of a settlement under the Indian Stamp Act, will mean, father, mother, husband, wife, son, daughter and grandchild. In the case of any one whose personal law permits adoption, 'father' shall include an adoptive father, 'mother' an adoptive mother, 'son'  an  adopted son, and 'daughter' an adopted daugh­ter.

The same concept is extended to transactions like 'Release' and 'Partition’. However, in the case of a fam­ily arrangement, the word 'Family' has to be understood in a wider sense so as to include not only close re­lations or legal heirs, but even those who may have some sort of antecedent title, a semblance of a claim or a pos­sible claim. The reason for this is that it ensures that future disputes are settled permanently.

The members of a family, in­stead of fighting amongst themselves, and thereby wasting time, money and energy on fruitless litigations, can devote their attention to things more con­structive.

In this background, we have to un­derstand as to when the family ar­rangement can be effected. It is now well settled that all that is necessary is that the parties must be related to one another and has a claim or a possible claim or even a sem­blance of a claim to the property. This ground could be something like "affection," "legal claims," "claims that have arisen," "claims that could arise in fu­ture," etc. These claims need not have strict legal backing or validity.

FAMILY ARRANGEMENT

If such a situation arises and members of the family feel that in order to maintain peace or to bring about harmony or to avoid future dis­putes, it is necessary, a family arrangement can be made.

In an oral arrangement, the parties con­clude the terms of the arrange­ment or partition orally. The parties also implement the ar­rangement by tak­ing possession of their respective shares.

The parties may subsequently reduce this to a mem­orandum or execute, stamp and register a document. Both types of documents are val­id.

The legal position as far as these transactions are concerned is as follows. 
A partition or a family ar­rangement can be made orally. If made orally and there being no document, the question of stamping or registration does not arise.

STAMPING NECESSARY

However, if the family arrangement or partition is re­duced to writing and it purports to create, declare, assign, limit or extinguish any right, title or interest of any immovable prop­erty, it must be stamped and registered as per the Indian Stamp Act and the Indian Registration Act.

Wheth­er the terms have been documented is a question of fact in each case to be determined by the nature of phrase­ology and the circumstances in which and the purpose with which it was writ­ten. However, a document like a memorandum, evi­dencing a family arrangement or a partition which had already been entered into and had been prepared merely as a record, in order that there are no hazy no­tions in future, need not be stamped or registered

If the division takes place under the terms of the document, then the same re­quires be stamping and registering. In other words, if the transaction is contemporane­ous, the document would re­quire stamping and registration. If the transaction has already taken place, and is merely recorded as a past transac­tion, then stamping and regis­tration may not be required.

If the family arrangement or partition is stamped but not reg­istered, it can be examined by courts for collateral purposes. Whether the purpose is a collat­eral purpose, is a question of fact depending on the facts and circum­stances of each case.

A person cannot claim a right or title to a property under the said document, which can be considered only for collateral purposes.

If the wordings are such that the family arrangement or partition re­quires stamping and registra­tion, then a person cannot get a valid title under such a document. It will not be accepted as evidence in Court.

Mere usage of the past tense will not, by itself, indicate a prior ar­rangement or transaction. The document has to be read as a whole. Therefore, the wordings in the document and the facts and circumstances relating to the oral transactions are crucial.

All these factors will have to be considered in determining whether the document is valid or not. It would be better to check the documents in the light of the above position and take remedial ac­tions wherever needed.

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Tuesday 21 April 2015

Loss of Property Documents


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The documents relating to a property inter alia include title deed, mother deed, encumbrance certificate, khata, property tax payment receipts, building plan etc. These documents may be original or may be extracts or Photostat copies. Some of these documents are in the nature of evidencing payments, authorization, permission, approval etc.

More often than not, you may be noticing advertisements in news papers regarding the loss of property documents with a lucrative offer to suitably reward the finder upon return of the same.

Reasons for non - availability of Documents

The reasons for non-availability of documents may be many. The following are few such instances:

a) The original title deeds might have been kept in the office and got mixed up with other documents. In this case, even though the original title deed is not lost, it is owing to the fact that the documents are not traceable even after search, the necessity to take further steps for protecting his interest by the owner does arise.

b) The original title deed might have been lost, stolen or might have come into wrong hands. In such cases, there is every possibility of a fraudulent transaction being effected by making use of the original title deed by the possessor of such a document unless the real owner acts swiftly to protect his interest over the property.

c) There may be some cases wherein a person has mortgaged his property by deposit of title deeds as security for the loan obtained by him. On the basis of a certified copy of the title deed, he may sell his property without redeeming the mortgage. In such circumstances, the innocent purchaser will not get title over the property since the mortgagee has a first charge.

d) The property documents presented for registration in the Sub-Registrar's office are to be collected within a reasonable time but not later than two years since the documents remain uncollected in the Sub-Registrar's office can be weeded out after the lapse of two years period. In case a person who failed to collect the property document within a period of two years and the said document is weeded out, then the said person at the most can get a letter from the Sub-Registrar's Office confirming the submission of the document for registration and the same has been weeded out as per rules since it was not collected from the office within the stipulated period.

Partition Deed

In a partition of the family properties, if a particular property falls to the share of more than one person, then all them cannot have the original title deed of such property in their custody. Therefore, as a precaution it shall be clearly mentioned in the partition deed that the original deed shall remain with a particular individual who shall declare and under- take to produce the original deed for verification whenever requisitioned by other sharers of the property. For use and custody of persons who do not get possession of the original title deed, they can obtain duplicate copy of the document at the time of registration.


To know the implications of the loss of property documents, it is better to understand as to what is meant by a deed and what is the difference between a deed and a document. A deed is a written document or instrument under which the right over a property is transferred from the transferor to the transferee. It may be noted that all deeds are documents but all documents are not deeds. The word "deed" has a wider meaning. It is to be properly executed, signed and delivered. Normally, it is registered. Examples of deed would include sale deed, settlement deed, exchange deed, partition deed, gift deed, release deed, etc. Examples of documents other than deeds would include photographs, maps, building plans, writings on various materials and substances, khata, encumbrance certificate, tax paid receipt, unsigned records, certificates, etc.

Effect of loss of documents

Loss of original title deeds may lead to a lot of complications, affect or impede free dealings with the property causing great anxiety, stress and trepidation for the person who has lost these documents. Loss of title deed reduces the strength of ownership title of the owner. The intending purchaser or the mortgagee may suspect the genuineness of the title of the vendor or mortgagor. The moot question is 'why do they suspect?' and the answer to this is that the deposit of title deeds does not require registration. By mere depositing the title deeds, a person can create mortgage of the property to avail loan from banks and the financial institutions. 

The period of redemption of mortgage is 30 years. Suppose a person purchases a property for a valuable sale consideration ignoring that the vendor does not have original title deed and suppose at some earlier stage the property has been mortgaged by deposit of the title document by its owner, then irrespective of the fact the purchaser has purchased the property for valuable consideration he will not get rightful ownership over the property but, the mortgagee has a first charge over the property though ownership is changed. In most of the cases, lending banks do refuse to grant loan in the absence of original title deed and the intending purchaser may back out of the transaction in the absence of the original title deed.  

It is obvious that in most of the cases people would become nervous when they lose their property documents since they have a feeling that their title over the property is lost for ever with the loss of property documents and thereby they conclude that they have lost their right to deal with property any longer. 

It is the loss of the original deeds such as sale deed, gift deed, will, mortgage deed etc., that will have impact since by virtue of these documents, the finder of the document may misuse the same. But, loss of document does not deprive the owner of his ownership over the property, if necessary precautions are taken well in time. Loss of the original title deed requires urgent action.

Loss of documents such as encumbrance certificate, Khata certificate, tax paid receipt etc., does not have serious implications since it is possible to make up the loss of these documents by applying and getting certificates afresh from the concerned authority.

Steps to be taken

In most of the cases, with a careful timely action and planning, it is possible to protect interest and title in the best possible manner. A sincere effort also should be made to trace out the lost document and to rebuild the certified copy on the same could be obtained from the office of the concerned Sub-Registrar.

Normally, in all cases of loss of property documents, it is the foremost duty of the owner of the property to notify the loss of property documents to the public and the concerned authorities without delay. The common practice followed is to notify the loss of the original deed in two leading and widely circulated news papers, one in English language and the other in vernacular language requesting the finder of such documents to deliver back the said document which will be suitably rewarded. Lodging a police complaint and obtaining acknowledgment from the police also is considered as evidence for the loss of document.

To avoid complications by virtue of loss of property documents, the owner of the property should act swiftly and take appropriate action to protect his right, title and ownership over the property.

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