Transfer of immovable property by sale, gift, exchange, inheritance, Will, etc is a very natural phenomenon. Of these various modes, sale, involves payment of consideration (purchase price) and every purchaser hopes to get a perfect absolute title.

But a seller cannot pass on a better title than what he has. Any defects in the title would also pass on to the purchaser. But purchasers, having paid a considerable amount demand perfect, unencumbered marketable titles.

Often, most purchasers do not get titles verified by advocates, who possess the knowledge and experience on property matters, but rely on real estate agents, middlemen and on the assurance of a seller or his advocate.

Though they spend lakhs of rupees on purchase of property, they hesitate to spend a few thousand on the verification of titles, ultimately landing in trouble. In most cases, the power of attorney is the only document handed over to the purchaser.

Many of the reputed builders refuse to give title papers to the purchaser, dictate terms and insist that property be purchased on their own advocates certificate of the title, a document with four lines of text without referring to the devolution of the property. They also force the purchaser to avail of a loan from a bank of their choice.

Title

A title may be freehold or leasehold. In case of a freehold title, the owner has absolute title without any encumbrance, with power to alienate the property.

But in case of a leasehold, the owner is a different person, who gives a property on lease, to the lessee, for a certain period. Rights are not absolute and the lessee is in possession of the property for an agreed period only.

After the lapse of the agreed period, the lessee has to hand over the vacant possession to the owner. Such persons may transfer only leasehold rights to the purchaser, if the lease document provides for alienation and the purchaser is bound by terms of the lease deed.

There are different forms of legal ownership of property:

*Government lands i.e central or state.

* Individual ownership.

* Hindu undivided or joint family ownership of property.

* Property owned by a private company or public company duly constituted under the Indian Companies Act.

* Property ownership of a government company.

* Property ownership of a co-operative society registered under the Co-operative Societies Act of respective stores.

* Property ownership of partnership firms formed and registered under the Indian Partnership Act.

* Wakf properties

* Trust properties which includes properties of temples and religious endowments.

* Property ownership of public societies and clubs registered under the Societies Act.

*Property ownership of autonomous institutions (statutory bodies) like universities, electricity boards etc.

*Property ownership of nationalised undertakings.

The most common mode of ownership is individual ownership wherein a single individual owns the property.

Tracing of title

Tracing of the title means tracing the history of property through documents and government records, on how the present owner got possession of a property. This is a very complicated exercise and only professionals specialised in property laws of Central, State and latest court decisions can help in tracing titles.

Though the seller is bound under Section 55 (1) (a) of the Transfer of Property Act to disclose any material defects in the property in his title, it is prudent to scrutinise the title personally. A good marketable title is one which is free from all encumbrances, doubts, and gives the holder full ownership rights to the exclusion of the rest of the world.

A property might have been acquired by various modes - like sale, gift, settlement, Will, succession, partition, release, adverse possession, allotment and grant.

Mother deed

The tracing of the title begins by verification of the earliest document available, which is called the parent deed or mother deed. If the earliest document is not available, the certified copy must be obtained at the Jurisdictional Sub-registrars office. This document provides details on how the first owner secured the property.

Back in those days, all landed property was owned by kings, jodidars, inamdars and they gifted or granted land to various people. Such acquisition documents, generally, will be an order of the court, government, statutory authority or of the ruler. Thereafter, the property might have passed through different hands who are referred to as intermediary parties. Such documents have to be examined in their chronological order, tracing the devolution of property to each of the intermediary parties. The sequence should be continuous without any break till the immediate transferor.

In case of a missing link, the records at the Sub-registrar’s office revenue department have to be verified.

But documents like gift deeds, partition deeds, release deeds and settlement deeds are not mother documents and the titles of the executant of such deeds have to be examined.

After tracing the title of the property from the first owner to the immediate transferor, the latest document which describes how the present owner got the property has to be verified.

Apart from legal documents like transfer deeds, the revenue records like tax paid receipts, the khata, the approved plans, encumbrance certificates (EC), mutations, the genealogical tree and other records have to be verified.

The most important function of tracing the title is investigation, where it is ascertained that the records and documents produced actually exist, and that they are recorded in books/records of the respective departments.

But advocates certify the title with a narration ‘based on documents produced’ which does not refer to the investigation or genuineness of the documents. Often the advocates accept the latest documents without supporting documents and certify the title, which is a dangerous practice.

Limitations of tracing Though the title is traced to perfection by referring to the documents, through revenue records and also investigation, there are certain limitations. Instances like pending cases, government notifications and prior unregistered agreements are not easy to trace. These are called the hidden areas of landed properties. There may be cases disputing the title, which are not reflected in the documents.

A thorough search in jurisdictional courts would help in tracing such pending cases. But the multitude as well as the hierarchy of courts makes it a difficult task.

Verifying with government bodies and statutory authorities, who also have the authority to acquire land, is absolutely necessary to rule out any notification of acquisition. Further, No-Objection Certificates (NOC) from urban development agencies would help.

But the possibility of earlier sale agreements which are not registered is very difficult to find out.

Proper enquiries with the vendor, neighbour’s and discussions would help. A paper notification to call for objections and claims, on the property to be purchased, could also prove helpful.

The ECs disclose only transactions which are registered. They do not reflect oral tenancy, litigation in courts, tax liabilities, equitable mortgages which are not registered, oral partition, oral gift under Mohammedan Law, unregistered Will, liability of maintenance and General Power of Attorney.

A small change in the description of the schedule of the property will lead the registering authorities to issue nil encumbrance certificates. An EC could help trace the title, but entirely depending on it is not advisable.

Verification of title

Most advocates trace the title for a period of 13 years only. Even many nationalised banks advise their advocates, on panel, to trace the title for 13 years and their pro-forma’s are also designed accordingly, which is not correct.

It is safe and advisable to trace a title for a minimum period of 42 years or more to weed out any chances of dispute in it.

If a private individual lays a conflicting claim on any document other than mortgage, the maximum limitation period is 12 years. The period of limitation against governments is 30 years and the execution period is 12 years.

Further, as per Section 90 of the Indian Evidence Act, a document executed 30 years or before is presumed to be validly executed.

Articles 61 (a) & (b) of the Limitation Act provide a limitation period of 30 years for redemption. Article 61(b) provides a limitation of 12 years for instituting a suit for recovery of possession against a transferee who has taken the property from the mortgagee for valuable consideration, and the limitation is to begin to run when the transfer becomes known to the mortgagor.

We shall examine this with reference to an example. Limitation period for redemption of mortgage is 30 years. Lets assume that a mortgagee sells the mortgaged property after 29 years, from the date of execution of the mortgage deed, without the knowledge of the mortgagor and before the mortgagor institutes a suit for redemption.

The mortgagor has the right to institute a suit for recovery of possession of the mortgaged property from the purchaser within a period of 12 years after coming to know of the transfer. Thus, a mortgagor can lay hands on the property within 30+12 years of the execution of the mortgage deed.

The question of adverse possession is also relevant in this regard. A person who remains in actual, peaceful, open and exclusive possession of immovable property for a period of 12 years or more, expressly or impliedly in total denial of the title to the true owner is deemed to have acquired ownership and title to the immovable property by adverse possession. Thus, it is safe and clear to trace the title for a minimum period of 42 years at least.

Original title deeds

Generally, only photocopies of the documents are scrutinised. Advocates should insist on production of all the original title deeds for verification, before finalising the legal opinion to rule out the possibilities of mortgage by deposit of title deeds, which are not registered.

In case of tracing the title of the properties allotted/granted by statutory authorities and governments, it is sufficient if the title is traced from the date of allotment to the immediate seller and there is no need to trace the title for a period of 42 years.

The author is an advocate who specialises in property matters. He can be reached on E-mail : editor@realestatereporter.net Ph: 25526644/45.