When should you hold on to ti­tle doc­u­ments?

Law favours the seller as the right­ful owner of the ti­tle doc­u­ments to his free­hold plot as long as he re­tains a part of the prop­erty con­structed

HT Estates - - HTESTATES - Sunil Tyagi

It is com­mon prac­tice in In­dia for own­ers of free­hold res­i­den­tial plots to mon­e­tise their as­sets by en­ter­ing into joint de­vel­op­ment or col­lab­o­ra­tion agree­ments with builders for con­struc­tion and de­vel­op­ment of builder floors on their res­i­den­tial plots. In­stead of a sin­gle res­i­den­tial unit or a bun­ga­low on the plot, this ar­range­ment re­sults in mul­ti­ple res­i­den­tial units on dif­fer­ent floors com­ply­ing with lo­cal build­ing bye-laws and mu­nic­i­pal laws. In such ar­range­ments, gen­er­ally, the orig­i­nal landowner re­tains one or more floors for his/her per­sonal use and the other floors are either sold by the builder and/or the orig­i­nal landowner de­pend­ing on the floor shar­ing ar­range­ment be­tween the builder and the landowner. A ques­tion that arises in such a sit­u­a­tion is with re­spect to re­ten­tion of orig­i­nal ti­tle doc­u­ments.

Let’s ex­am­ine the rights of a buyer and seller through an illustration. A par­tic­u­lar plot of free­hold land in a res­i­den­tial colony in Delhi was owned by A. The plot was pur­chased by A from X through a reg­is­tered sale deed in the year 1975. X had pur­chased the plot from Y through a reg­is­tered sale deed in the year 1973. Doc­u­ments re­flect­ing the ti­tle chain for the plot prior to the year 1973 were also in A’s cus­tody.

Af­ter some years, the bun­ga­low was be­com­ing in­creas­ingly dif­fi­cult to main­tain and af­ter his retirement A de­cided to raze it down and con­struct four res­i­den­tial units. Af­ter the project was com­pleted, the first, sec­ond and third floor were sold by A.

A dis­pute arose when at the time of ex­e­cu­tion of the sale deed in favour of the first floor, the buyer of the unit sought to keep the sale deeds ex­e­cuted in 1973, 1975 and other doc­u­ments es­tab­lish­ing the ti­tle of A to the plot, on the premise that since he had paid the pur­chase money to the seller, A was bound to de­liver all doc­u­ments which were in his pos­ses­sion. How­ever, A was un­will­ing to hand over all orig­i­nal ti­tle doc­u­ments to the buyer.

The law in such a sit­u­a­tion is very clear; when the whole of the pur­chase-money has been paid to the seller, the seller is ob­li­gated to de­liver to the buyer all doc­u­ments of ti­tle re­lat­ing to the prop­erty which are in the seller’s pos­ses­sion or power. In sit­u­a­tions where the seller re­tains any part of the prop­erty com­prised in such doc­u­ments, he is en­ti­tled to re­tain all such orig­i­nal ti­tle doc­u­ments.

In the given case, since A re­tained one res­i­den­tial unit, he was not ob­li­gated to de­liver the pre­vi­ous orig­i­nal ti­tle re­lated doc­u­ments of the prop­erty to the buyer(s) at first, sec­ond and third floor, which were in his pos­ses­sion. He was ob­li­gated to pro­vide th­ese doc­u­ments to the buyer(s) for their pe­rusal and scru­tiny and pro­vide cer- ti­fied copies of the same to the buyer(s), if re­quired. The le­gal pro­vi­sions pro­vide that if the buyer is pur­chas­ing only a part of the seller’s prop­erty (eg one floor in a multi-storey house) and the seller con­tin­ues to re­tain a por­tion of such a prop­erty, it is the seller who is en­ti­tled to re­tain the chain of pre­vi­ous orig­i­nal ti­tle doc­u­ments un­less oth­er­wise agreed be­tween the par­ties.

How­ever, if the seller does not re­tain any part of the prop­erty and dif­fer­ent por­tions of the en­tire prop­erty are be­ing sold to dif­fer­ent buy­ers, the buyer who is pur­chas­ing the por­tion hav­ing great­est value is en­ti­tled to re­ceive the chain of ti­tle doc­u­ments of the en­tire prop­erty.


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