Title investigation of immovable property

Real Estate Laws -Part 1-Title Investigation Of Immovable Property
The word “Title” generally used in the context of property means a right in the property. It connotes bundle of rights subject to prohibitory or regulatory statute. Such rights are capable of being transferred.

In the case law reported in Supreme Court Cases ,

Can bank Financial Services Vs custodian 2004(8) SCC 266, it was held by Supreme Court that:-

“The Title in an immoveable property is the means whereby a person’s rights to property in presenti is established and does not include a bare expectancy to get such right in due course of time.”

I.e. Title means a present right or interest in an immovable property capable of being transferred.

The expression Title conveys different forms of a right to a property, which can include a right to possess such property.

Title in immovable property can be conveyed only if the transferor posses such title.

A person cannot convey any title, which he himself does not possess .This was decided by the Supreme court in case of

“Syndicate Bank V Estate officer, AIR 2007 SC 3169”

Title in a property cannot exist in two different persons having rival claim.

Marketable title to property :-

The term ’marketable title’ title means a title free from reasonable doubt.

Where there is reasonable decent probability of litigation, it would be considered as the title is doubtful.

The procedure of tracing the title :-Normally a title to an immoveable property is traced for a period of 30years or 13 years. A search is taken by an advocate of the records available in the sub-registrar office .Advocate on basis of the entries found related to the property for which the search was taken ,and also on the basis of the documents available gives his search and title clearance report.

Further a public notice in local newspapers should be given about the intention of sale as also calling for any objection before the sale is finalised.

Such notice will show the bonafide intention of the purchaser, in case any litigation arises later on, the Hon. court will consider the bonafide intention of the purchaser before passing a judgment against the purchase.

Material defect in property is different from material defect in title.

A right of way / easement may not be a defect in title of the property but would become the material defect in the property.

Disclosure of material defect in property is the duty of the seller:-The seller is duty bound to disclose to the buyer.

Material defect in the seller’s title makes the sale deed voidable.

Material defect in property if not disclosed amounts to fraudulent transfer. –Under Section 55 of the Transfer of property Act, omission on the part of the seller to make disclosure as are mentioned under section 55(1)(a) of the Act, is fraudulent. But before there is such breach it must be shown that the buyer could not with ordinary diligence, discover such defect.

It is well settled that where the buyer has the means of discovering the defect of the title, there can be no breach of section55 (1) of the Act.

The reported case laws are Dr.Gwashalal Vs Kartar Singh A.I.R 1961 ,J.K. 66and Jhamaklal v Mishrilal AIR ,1957 MB 23

Existence of mortgage makes the title incomplete. – The existence of the mortgage over the property makes the title thereto incomplete.

It is well settled that encumbrance on the property is material defect in the property.

Possessory title in the property – A possessory title under a registered agreement to sale along with “No Objection Certicate” of the seller, could be very well to the extent of furnishing the security but cannot confer full fledged title in the property.

In terms of section 12 B of the Income Tax Act, title must pass by any modes mentioned therein, namely sale exchange or transfer.

In the case of Alapati Venkataramaih Vs commissioner AIR 1966 SC 115 Supreme court held that the contention that a possessory title in terms of section53A of the Transfer of Property Act would not sub serve the requirements of an effective conveyance of the capital assets, as delivery of possession of immoveable property cannot by itself be treated as equivalent to conveyance of immovable property.

By taking proper care as above, the purchaser can get good and marketable title to any immoveable property.

Source: law4all.co.in» Blog Archive » Real Estate Laws -part 1-Title investigation of immovable property


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