• Money lender selling property I bought

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Dear Advocate,

I bought a property from madam YK in 2017 though SBI loan. 
Four year before(in 2013), YK has taken a loan from a money Lender VR. And VR filed a case on madam YK in the year 2013 and he attached YK's property.
Now in 2018, money-lender filed execution Petition in court and sent me legal notice that my ppty registration is not valid as before my registration he already filed a case and ppt got attached.
In the Encumbrance-Certificate we took during ppty registration, the moneylender's name never showed up. Also, the owner YK did not inform us about the ongoing legal issue.
Previous owner RK orally said to us that she will clear the loan amount with the money lender. But we cannot trust her.

Does the moneylender has valid rights on the ppty?
does the court allow his sell the ppty to recover his loan amount.
Do I need to inform the SBI bank about the legal notice I received. What are my strong points in this case. Please advise.

 

Thanks
Gopi.
Asked 7 years ago in Property Law
Religion: Hindu

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10 Answers

Sir the property can be attached since information was not disclosed to you can file a case of cheating breach of trust on the lady, further can join as party in the execution petition and plead before court that since you are bone fide purchaser the information was not disclosed neither the property documents showed the record. so in that circumstances since the third party rights are created the property can be left and other can be attached,

If court attaches and auctions the property even after your application then in that case you can file a suit for recovery of your amount.

Yes inform the bank about the legal notice.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

Firslty, Sir, you need not to worry about anything as whatever you have mentioned in your query shows that only you have right over it.

Secondly, when that money lender gave the money to him then he should have gone for a mortgage deed before the registrar only then there may be the possibility that you didn’t inquire from the registrar office before buying that property.

Thirdly, even if the property was attached then sale deed should not have registered as now the burden goes on to the registrar not on you.

Fourhtly, if he wants to take money then take from the privious owner not from you.

Fifthly, you may have to file an injunction suit against that execution petition.

Sanjay Baniwal
Advocate, South Delhi
5477 Answers
13 Consultations

Any transfer of such immovable property or any dealing with such property during the pendency of the suit is prohibited except under the authority of Court, if such transfer or otherwise dealing with the property by any party to the suit or proceeding affects the right of any other party to the suit or proceeding under any order or decree which may be passed in the said suit or proceeding.

you can file cheating case u/s 420 and civil suit recovery of money against seller.

You can also file Order for Injunction, prayed under Order 39 Rule 1 & 2 after detailing the falsification done in registration.

Mohammed Mujeeb
Advocate, Hyderabad
19335 Answers
32 Consultations

1) If you have mentioned encumbrance point in your agreement or deed and indemnity points than YK has to take whole responsibility of her previous loan taken frm money lenders. Your plot will not be sold and you will also be not able to sell the plot to anyone unless un until this dispute is over.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

Yes. Money lender has valid legal right on the property as the property was attached before your purchase and judgement have came in favour of money lender and now execution petition is filed.

Yes. Court will allow selling of property for recovery of money.

You need to inform bank and file suit for cancellation of sale deed, fraud and recovery of money.

Abhilasha Wanmali
Advocate, Nagpur
1021 Answers
1 Consultation

you dont have clear and marketable title to property

2) if attachment orders were passed seller could not execute registered sale deed in your favour

3) there must be indemnity clause in your contract

4) you have to sue seller to recover your money with interest

5) inform SBI about legal notice received by you

Ajay Sethi
Advocate, Mumbai
99856 Answers
8148 Consultations

1. It is to be seen whether the property was attached before passing of decree or whether there was an order of injunction before the date of your purchase.

2. If a property is purchased during the time it was under litigation the same is bound by y the outcome of the litigation.

3. in this case the property was under litigation as the suit was filed for recovery of loan.

4. in that event the decree would be subject to charge created on the property.

5. In other words the creditor can not auction after attaching the property as you purchased the property at ta time when it was not the subject matter of any litigation.

So there is nothing to worry.

Devajyoti Barman
Advocate, Kolkata
23656 Answers
537 Consultations

1. VR has prior rights to the property

2. VR can enforce the decree passed in his favour and pursue his execution application

3. I am surprised how your lender SBI did not do due diligence on this

4. your remedy now lies against the seller YK who did not disclose to you about the prior encumbrance on the property

5. you will have to sue YK

6. if you inform SBI then obviously SBI will require you to give security of some other property as the present property's title is not clear

7. anywhich ways if the balance loan amount is not too big then you can offer to pay that to the money lender and later on recover the same from your seller

Yusuf Rampurawala
Advocate, Mumbai
7902 Answers
79 Consultations

Dear Client,

If court decree in his favor, than he has valid claim, file criminal complain agasint YK for cheating and sec 406 IPC.

Yes,

No need to inform SBI, ask YK better get it cleared or criminal case.

Yogendra Singh Rajawat
Advocate, Jaipur
23083 Answers
31 Consultations

The court case will not reflect in the encumbrance certificate hence there is no possibility to come to know about it in advance.

If the other party had obtained any order to attach the property in his favor then you cannot do anything about it because it is your problem that you did not obtain proper legal opinion in this regard.

You are liable to repay the bank home loan also in case he is taking possession by executing the decree in his favor.

You may have to sort out this issue with the vendor or you can lodge a criminal complaint against the vendor for cheating you on this.

T Kalaiselvan
Advocate, Vellore
90057 Answers
2499 Consultations

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