Loss of orig­i­nal ti­tle doc­u­ments

HT Estates - - HTESTATES - The author is Se­nior Part­ner, ZEUS Law, a cor­po­rate com­mer­cial law firm. One of its ar­eas of spe­cial­iza­tion is real es­tate ad­vi­sory and lit­i­ga­tion prac­tice

shown to mar­ket to cus­tomers. With Rera, de­vel­op­ers have to an­nouncethe­com­ple­tion­dateat launch, so they don’t want­torisk launch­ing big town­ships in one go. They­laun­chonlya­por­tionto en­sure that they have more con­trol on­the­con­struc­tion­ac­tiv­ity.” Un­like be­fore, most town­ships today fo­cus on af­ford­able hous­ing. The­newcropisal­sotry­ingto give them adis­tinct theme, mak­ing them‘smart’andtech­nol­o­gyen­abled, along­with­con­cept­s­like stu­dent and se­nior hous­ing that are be­ing in­tro­duced.

Mark­ing its en­try into mid-in­come hous­ing, Em­bassy Group re­cently launched the first of the five phases of its 283-acre town­ship in north Ben­galuru. The apart­ments in this phase (12 acres) are be­ing mar­keted as smart homes and Em­bassy has tied up with Ama­zon to in­te­grate Ama­zon Echo de­vices. In the later phases, it may in­tro­duce stu­dent hous­ing and se­nior liv­ing. “The high in­vest­ment needed up­front for land ac­qui­si­tion, the lengthy ges­ta­tion phase of de­vel­op­ment and the longterm com­mit­ment of funds have cre­ated an en­try bar­rier for in­te­grated town­ships, which only large de­vel­op­ers can scale,” said Reeza Se­bas­tian, Em­bassy se­nior vice-pres­i­dent, res­i­den­tial busi­ness. “Since ac­quir­ing land is a big hur­dle and there are strin­gent rules on how you can roll out prod­ucts, it may prove a chal­lenge to be able to en­ter the space.” Shapoorji Pal­lonji Real Es­tate is in the process of ag­gre­gat­ing 1,000 acres be­tween Mumbai and Pune to build a mas­sive town­ship, which is cur­rently be­ing con­cep­tu­al­ized.

CEO Venkatesh Gopalkr­ish­nan says projects like th­ese need to have a pri­mary hook, a theme. “Our project will be built in the next 8-10 years, in phases around a theme,” he said. “Mas­ter-plan­ningof town­ship­sneed­to­be­wellthought, with right po­si­tion­ing and­prod­uct mix. If youdoit well, you build a lot of value.”

Mo­hit Mal­ho­tra, man­ag­ing direc­tor and CEO, Go­drej Prop­er­ties Ltd, says that while the firm is bullish on town­ships, they are com­plex to ex­e­cute and need “fi­nan­cial and ex­e­cu­tion ca­pa­bil­i­ties and or­ga­ni­za­tional sup­port’ that smaller play­ers will strug­gle to meet. Go­drej has been col­lab­o­rat­ing with smaller de­vel­op­ers to breathe new life into projects that the lat­ter couldn’t de­velop. Gen­er­ally, mort­gage is cre­ated over an im­mov­able prop­erty to se­cure loan ad­vanced by a lender/ bank/ fi­nan­cial in­sti­tu­tion to a per­son/ en­tity/ bor­rower. Un­derthe­p­ro­vi­sion­sofTrans­fer of Prop­erty Act, 1882, mort­gage has­been­de­finedas­the­p­ro­cessby which in­ter­est in a spe­cific im­mov­able prop­erty is trans­ferred to the lender as a se­cu­rity for the re­fund of the money ad­vanced or to be ad­vanced to it, by way of loan to a bor­rower.

The per­son bor­row­ing and trans­fer­ring the in­ter­est in a im­mov­ableprop­er­ty­in­favourof the­len­deriscalledthe­mort­gagor and the lender can be a per­son/ anyen­tity/bank/ fi­nan­cial in­sti­tu­tion in whose favour the mort­gage is cre­ated is called the mort­gagee. The money which is lent against the se­cu­rity of im­mov­able prop­erty in favour of mort­gagoriscalled the­mort­gage­money.

Mort­gage over im­mov­able prop­erty can­be­cre­ated in dif­fer­ent ways vis a vis sim­ple mort­gage, mort­gage by con­di­tional sale, un­sufruc­tu­ary mort­gage, english mort­gage, mort­gage by de­posit of ti­tle-deeds an­danoma­lous mort­gage. The method whichis­gen­er­allyadopt­ed­bythe fi­nan­cial in­sti­tu­tions/ banks in In­dia is mort­gage by way of de­posit of ti­tle deedswhichisalso known as eq­ui­table mort­gage.

It is the eas­i­est for­mofthe­cre­ation of mort­gage wherein the orig­i­nal ti­tle doc­u­ments/ deed­sof the prop­erty are de­posited with the bank as se­cu­rity for the loan ad­vanced by it to the bor­rower.

In the re­cent past, there have been in­stances wherein the bor­rower/ mort­gagor­was­in­formed that the­o­rig­i­nal ti­tle deeds­de­posited by him/ her in the bank again­st­th­eloanad­vanced­to­him, has been lost or mis­placed. Now, the ques­tion arises as to what hap­pens when the bank loses or mis­places the ti­tle deed(s) of the prop­erty and fails to re­turn it to the bor­rower, af­ter the repayment of loan.

The mort­gager/ bor­rower in this event could even sub­stan­tially lose the mar­ket­val­ue­ofthe im­mov­able prop­erty as the sub­se­quent pur­chaser would be skep­ticalof­buyin­gan­im­mov­able prop­erty with­out the orig­i­nal ti­tle deed/ doc­u­mentofthe­p­rop­erty.

The banks/ fi­nan­cial in­sti­tu­tions have a duty to take proper care of ti­tle deeds/doc­u­ments of im­mov­able prop­erty de­posited with it be­cause any loss of the orig­i­nal ti­tle doc­u­mentsre­duces the mar­ket value of the prop­erty sub­stan­tially and no fur­ther eq­ui­table mort­gage­can­beeasily cre­ated on such prop­er­ties. The mort­gagor has to have ab­so­lute clar­ity on whether the ti­tle deed sub­mit­ted­by­himhas­been­lostor mis­placed­bythe­bank, as­thereis a fine dis­tinc­tion be­tween the two. The word ‘mis­placed’ con­veys the mean­ing that the doc­u­ment is still in pos­ses­sion of the bank but has been wrongly placed and may be re­cov­ered later. How­ever, the word ‘lost’ con­veys the mean­ing that the doc­u­ments are no longer in pos­ses­sion of the bank.

The­mort­gago­rafter­receiv­ing a com­mu­ni­ca­tion from the bank that the orig­i­nal ti­tle deed is lost, should file a po­lice com­plaint stat­ing the loss of the doc­u­ment. The mort­gagor should also con­sider get­ting th­eloss pub­lishedin the lead­ing news­pa­per(news­pa­pers, prefer­ably­i­nanEnglis­hand a ver­nac­u­lar news­pa­per). The ag­grieved mort­gagor may also ap­proach the bank­ing om­buds­man or con­sumer fo­rum hav­ing ju­ris­dic­tion to seek re­dres­sal. The bank usu­ally com­pen­sates its cus­tomer­sor­mort­gago­rasper their com­pen­sato­ry­pol­i­cy­forthe loss of orig­i­nal doc­u­ment.


Mid­sized firms have tried sell­ing off land big­ger play­ers

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