• Who will prevail acc to doctrine of priority in property law

Case facts-
 I did a notorized (non registered)sale agreement of property of my friend on 13/04/17 for term of 12 months upto 13/0418 with a value of Rs.1150000/- and advanced the rs. 400000/- by cheque. The property was mortgaged with Vistar fianance at that time for Rs. 700000/- and it was mentioned in the sale agreement that it is to be released from that by a seller and make a sale deed of a same but mean while a seller transfer a mortgage of property to a second company i.e. AU fianace on 11 december 17 for Rs 1150000/- without giving any information to me about the transfer of mortgage. He also taken another 284000/- in april 2018. Since last 4 months he is not repaying the EMI of the company as he become cashless and due to financial crunch. On asking for a sale deed he told all the story an hand over the possession of said property by telling that he is unable to pay the bank loan and cannot release the mortgage. Now bank has started the procedure of defaulter against him. The current valuation of property is aprox. 1300000/- . and bank outstanding with penalty is 1250000/- and I had paid him Rs 684000/-. I had a possession of property and bank have the title deed.
 What should I do, Can I file case of CHARGE on that property and sale of property should initiate????
 In this case who will get the priority over the property? Me or subsequent Bank.??
 Can bank take a possession from me ?
 What is the procedure of finance company in such cases for settlement disputes?
Asked 6 months ago in Property Law from Surat, Gujarat
Religion: Hindu

Kindly clarify whether mortgage is registered or not .?if property was mortgaged finance company should have been given original documents of tile 


2)your agreement with seller was unregistered 


3) the subsequent mortgage in favour of AU finance was illegal 


4) you should file case of cheating , criminal breach of trust against seller under section 406, 420 of IPC 


5) you can file suit of specific performance against seller to execute registered sale deed in your favour 


6) bank would seek to auction the property 


7) you have to file application before DRT seek stay of auction 

Ajay Sethi
Advocate, Mumbai
61254 Answers
3715 Consultations

5.0 on 5.0

Yes bank can take possession through court. 

But before you can take temporary injunction. 

You should contest the case on merit. 

You have to file recovery of money suit against seller along with interest 


Mohammed Mujeeb
Advocate, Hyderabad
7050 Answers
3 Consultations

4.5 on 5.0

Bank can approach court under sarfesi Act. You can try to secure injunction in the sad case from civil court.

Prashant Nayak
Advocate, Mumbai
8254 Answers
11 Consultations

4.8 on 5.0

1) Title is important so the bank can auction the property and recovery their money and will ask court to give possession of the property.


2) It will better you purchased property title from Bank and finance company and ask you friend to sale one more property if he has in your town or at village. So you can recovery balance amount of yours.


3) For time being check against how many people your friend has taken loan on this particular property.

Ganesh Kadam
Advocate, Pune
6426 Answers
47 Consultations

4.9 on 5.0

  1. As per the information mentioned in the present query, makes it clear that you have the sale deed but not yet registered.
  2. But the bank may have all registered document only then he may have got loan.
  3. Now, as per the records, bank would have priority over you.
  4. Though you may have other legal remedy for filing a suit for recovery of money which you have given to him.
  5. It also can initiate the proceedings under NI act, as you have cheque’s also.
  6. Of bank would proceed further then you can claim your amount out of the amount deducted by bank after auctioning that property.

Sanjay Baniwal
Advocate, South Delhi
3984 Answers
7 Consultations

5.0 on 5.0

It is advisable to file suit for specific performance 


2) you have to file application before DRT seek stay of auction 

Ajay Sethi
Advocate, Mumbai
61254 Answers
3715 Consultations

5.0 on 5.0

The possession of property with you is illegal and invalid since it is an unregistered sale agreement which is not enforceable in law.

You have to file a money recovery suit and seek for ABJ Or charge on property till recovery of money from him.

The mortgagee bank may have priority over the property.

T Kalaiselvan
Advocate, Vellore
51330 Answers
609 Consultations

5.0 on 5.0

The sale agreement with you is not enforceable but it can be considered as acknowledgement for the money transaction hence only money recovery suit would be an option.

You cannot stop them from letting out the property on auction.

T Kalaiselvan
Advocate, Vellore
51330 Answers
609 Consultations

5.0 on 5.0

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