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. 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 mortgage 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 periods.
Originor 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.
Flowof 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 scrutinized 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.
Presentstatus / 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.
Jointfamily 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.
Minorproperties
Any transfer of Hindu minor properties 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.
Propertiesallotted/ 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.
Creationof equitable mortgage
Only the person having valid marketable title as certified
by the legal advisor can create equitable mortgage in favor 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 which are the documents that are to be accepted in original, certified
copies or photocopies for deposit.
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