PALANIRAJ LEGAL CONSULTATION
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LEGAL ADVICE TO PURCHASE PROPERTY
Why people opt to purchase immovable properties?
v For their own use and occupation
v To invest in a profitable portfolio
as a sort of savings.
Whatever be the reason
for purchasing property, the purchaser must necessarily know certain
fundamental legal aspects. When I say “Legal aspects” don’t be perplexed
because the necessary aspects are not complicated to comprehend. They are basic
legal aspects which a common man must know. The idea of writing this post is to
enlighten a commoner because now-a- days people grope in the dark when they
venture to buy a property.
There were times when people were under the
impression that only rich people could afford to invest in real estate. Now- a-
days even middle class people and salaried employees could purchase property
because of the availability of bank loans on easy terms. The banks vie with
each other to offer lower interest for housing loans and a low slab of EM1. In
such circumstances the number of persons who opt of buy properties swells day
by day. The banks refer the papers to their panel lawyers for scrutinizing the
documents to find out whether the vendor has marketable title to the property
or whether the purchaser has acquired a valid and marketable title. The
purchaser could offer the property which he opts to purchase as security for
the loan.
People would like to
purchase
§ A Vacant site
§ A built up house
§ A flat in a multi- storied apartment
What ever may be the kind of property
the fundamental legal aspects are common
Documents of Title
Only
the documents of title would enable a person to sell his property to an
intending purchaser. The documents of title could be in any form and the
various forms of such title documents are to be an analyzed below:
In
order to ascertain the origin of title one will have to trace back to certain
period of time, say 30 or 40 years. The properties could be acquired either
from the government or from an individual. Therefore there would be two major
classifications of properties from where the title originated:-
1. Property owned by the Government
2. Property owned by individuals
Property owned by Government
Broadly speaking the
properties owned by the Government can be classified as:
a) Porampoke
properties
b) Natham
property
Whenever the Government
thinks fit to confer title on a deserving person in respect of Government
property an order of assignment of the particular property is issued to the
beneficiary. Such an order of assignment is a document of title which confers
title to the beneficiary because the paramount title holder namely the
Government issues the order. For instance a landless poor who is a dalit is
assigned a piece of land by an order of assignment such an assignment order is
a document of title. In the case of a natham
belonging to the Government, patta is issued to a house less poor and the grant
of such patta is a document of title. Normally patta is considered only as
document of possession. That is common law but the exception is the grant of
“Manaivari patta”. Therefore the original assignment order or the natham patta
which are considered to be documents of title, must be preserved as title
deeds.
The
Government may be pleased to pass an order of assignment for mainly two
reasons:
Ø Assignment in favour of landless poor
Ø Assignment in favour of depressed
class
Whether it is an assignment order in favour the
landless poor or a depressed class person the said order is issued subject to
certain conditions. Those conditions are specifically mentioned in the order
itself and the violation of the same would enable the Government to cancel the
patta and take back the property from the possession of the assignee. For
example, when a land is assigned to a landless poor normally a condition is
stipulated directing the assignee to bring the land under cultivation with in
certain period of time
D C LAND
In the case of land assigned to depressed class
person such land is popularly known as “DC land”. In the assignment order
issued to a DC person the normal condition imposed is not to alienate or to
encumber the land with in certain period with out obtaining the prior
permission of the Revenue Divisional officer in writing. Another important
condition imposed in the assignment in favour of DC is that the beneficiary
should not transfer his title to a non depressed class person.
Therefore there is a
great risk involved in the purchase of lands which were assigned by the
Government. The intending purchaser must demand the original order of
assignment and he should also look in to the various conditions imposed in the
order and also ascertain whether those conditions were not violated. In case of
purchase of a DC land by a non- DC person the purchaser is running a risk of
the assignment being cancelled.
Natham patta:-
Natham
porampoke is another classification done by the revenue department. The word
“Natham” would mean a high land which is suitable for constructing house. The
Revenue Department issues a patta called “Natham patta” or “Manaivari Patta” on
two grounds:
1. Poor people who do not own a house
site.
2. A poor person who is in long
possession and enjoyment of a site by putting up a hut or some temporary
structure.
Natham pattas are
issued to deserving persons after proper scrutiny of the suitable
beneficiaries. The authority who signs such natham pattas under Natham
settlement survey scheme is a Special Tahsildar. The other kinds of Natham
pattas are signed by the regular Tahsildar or the Deputy Tahsildar.
Manyam or Inam
Lands
The
word ‘Manyam’ is a Sanskrit term
while ‘Inam’ is an Arabic word and
both would mean gift. Prior to the English rule, certain kings, and chieftains
and during mogul rule Nawabs gifted certain lands and they were popularly known
as manyam or Inam. In olden days the king gifted lands to Village Administrative
Employees like maniam and karanam and also in recognition of
services rendered by carpenters, blacksmith, potter Barber and Dobby. Those
gifts are called service manyams. The lands gifted to temples are called Devadhayam and Kattalai. Such gifts were
made by kings and ministers in the form of Sasanas
The copper plates containing such sasanas
are found though rarely even nowadays. In certain temples and mutts the sasanas are enshrined on stone slabs,
which are known as ‘Sila Sasana’. In
mugal period the Inams given were called ‘Jahirs’.
Rayathwari Patta :
In
olden days certain manyams called ‘Surotriyams ‘Agraharam’ Zaminthari’ were in
vogue. All the Inam lands including minor imams were abolished by the advent of
Inam Abolition Acts. After abolishing the imams regularization was done. By
competent authorities under Rayathwari pattas were issued in favour of those who
were in actual possession and enjoyment of
Inam lands. Such rayathwari pattas are also exceptional in character in as much as they are considered as documents of title.
Inam lands. Such rayathwari pattas are also exceptional in character in as much as they are considered as documents of title.
Properties owned by Individuals:
In
respect of land under a valid document of title an individual derives title to
immovable property. The vendors who offer to sell a particular property should
produce the deed under which he had derived title. The different categories of
title deeds under which an individual derives title are enlisted hereunder.
1. Sale
The common mode of
getting title to an immovable property is by purchasing a property under a sale
deed. When a person pays sale consideration (Price) and purchases immovable
property worth Rs. 100/- and more would do so by getting a sale deed duly
executed and registered by his vendor.
2. Gift Deed (or) Settlement Deed.
Title
would pass under a Gift deed when a person executes a gift deed. The executant is called “Donor” and the beneficiary is
called ‘Donee.’ A father, who wants to benefit his son (or) daughter, executes
a gift deed with out receiving any cash consideration and such a deed is called
settlement deed in the ordinary parlance. Out of love and affection such
settlement deed is executed. The stamp duty is considerably less for the
settlement deed than that of the sale deed.
However there is a restriction for execution of a settlement deed. The
Donor cannot execute a settlement in respect of joint family property. Only the
separate property (or) self acquitted property of the Donor could be
gifted.
While scrutinizing
settlement deeds care must be taken to find out whether an absolute right and
title was conveyed to the Donee (or) only a life interest was given by the
Donor. If life interest is conferred under the settlement deed, the Donee
cannot have any right of alienation and he/she cannot confer title during his
life time. Only the person who gets the vested remainder could alienate the
property after the life time of the life-estate-holder. If the person who gets
vested remainder is certain, he/she along with the life-estate-holder could
alienate. If an absolute title is given to the Donee, he could alienate the
property which he got under a settlement deed.
There is yet another
important aspect which should be borne in mind while scrutinizing the
settlement deeds. That relates to the power of revocation. Ordinarily a
settlement deed is irrevocable unless the power of revocation is reserved. The
words commonly used in the settlement deeds read as follows:-
“The Donor has no right to revoke the
settlement and even if he revokes it would not be valid”. In such a case the
settlement becomes irrevocable. The power of revocation must necessarily be
reserved by the Donor incorporating recitals specifically mentioning such a
power of revocation.
As already stated a member of a
joint family (Coparcener) does not have power to gift his share of property.
There is one exception in Hindu Law which enables the kartha (Manager) of a
joint family to execute a settlement deed in favour of a daughter, which is
gifting a small portion of the joint family property on the eve of her
marriage.
3. Partition Deed:-
(a) Partition Deed in the case of joint family properties:-
A Hindu joint family may possess joint family properties. Two or more
persons may jointly own some properties by joint purchase. The members of Hindu
undivided family or joint owners, as the case may be, could get their share
divided in two ways. One is by executing a registered deed of partition and
allotting the share of each member under various schedules. Another mode of
division is by filing a suit for partition and getting a decree through a suit in
a competent Civil Court
When a partition deed or Final Decree is perused care must be taken to
find out whether an absolute right and interest is conferred to a sharer or
only a life interest is given. Only when absolute right and title is conferred
the sharer gets salable interest.
In
law, Partition can be orally effected between joint owners or joint family
members. But it is difficult to prove the fact of oral partition. If oral
partition is followed by mutation proceedings like sub-division and grant of
separate patta and consequent acts of ownership by various sharers, like
mortgaging their shares, there is a presumption that the properties were orally
partitioned.
In
certain cases unregistered partition deeds, like ‘kurchit,’ are executed. An
unregistered partition deed under which partition is effected is inadmissible
in evidence for want of registration. Suppose a partition is orally effected
and after some time a memo of partition recording the allotment of shares to
various sharers is executed with a view to keep in memory the allotment of
shares then the said memorandum is admissible, not as a document of partition
but as a piece of evidence to prove partition.
