• Can I purchase the property

PartyA is the initial owner of a Flat. He took a loan from the bank and submitted the property as collateral in Feb2013. Later on he fell into heavy debts and is almost bankrupt today. 
However PartyA cleared the debt with the bank and on the same day executed a Gift deed to PartyB in Nov2022. PartyB has put the property for sale in May2023. PartyA and PartyB are relatives. PartyB claims that he helped PartyA clear the debt and chose Gift deed to save the registration charges. 

1) The EC is clear with details of the submission and withdrawal of the property documents from the Bank. PartyB is quoting a price lesser than the market rate in the area, to the tune of around 5Lakhs. It appears he wants to get rid of the property soon. I couldn't figure out the risks involved as things seem proper on EC and i have seen the original docs with him. PartyB who wants to save on registration charges opted for quoting a lesser than market price is what sounds suspicious to me. What more information should i gather from him to ascertain the property isn't involved in any legal hassles ?

2) Is there any way that this property can be attached in the courts by PartyA's Creditors in the past or the future ? The original documents were submitted as collateral to the bank in Feb2013 itself and released subsequently in Nov2022 after clearing the debt. It has been more than 180days since PartyA transferred the property to PartyB as of today.

3) After reviewing the replies if I choose to purchase the property what precautions should I take to protect myself from any future legal hassles ? 'eg.Giving a paper ad that am purchasing the property from so and so, will it help in avoiding future legal hassles?'
Asked 11 months ago in Property Law
Religion: Hindu

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8 Answers

you can purchase the flat as title is clear and marketable 

 

2) sale deed should contain indemnity clause to indemnify you in case third party claims are made 

 

3) ask for NOC from society for sale of flat and a no dues certificate 

Ajay Sethi
Advocate, Mumbai
94654 Answers
7523 Consultations

5.0 on 5.0

After making gift, Party A cease to have any ownership or proprietary right over the flat. The right of bank also cease when debt liability towards bank was fulfilled by A and the bank had released the flat so if you purchase the flat then tomorrow flat cannot be attached as the A would not be owner of flat. In attachment process only properties of judgement debtor which is only owned by judgement debtor. 

Siddharth Srivastava
Advocate, Delhi
1240 Answers

5.0 on 5.0

You can check anywhere there is any encrumbrance in the same. Take noc from all legal heirs and also an indemnity bond them

Prashant Nayak
Advocate, Mumbai
31908 Answers
179 Consultations

4.1 on 5.0

1) You can go ahead and purchase the property since the seller has the proper marketable title with him.

2) If the flat is in Society, do ask NOC from the same.

3) To be on safer side do give an ad in the local newspaper.

Zafreen Khan
Advocate, Greater Mumbai
54 Answers

5.0 on 5.0

- If the party B is relative , then the Party A was having his right to tranfer the property in his name after executing a registered gift deed. The registration of gift deed is mandatory. 

- Further, before purchasing the said property , you must check the NOC from the bank and property sale deed in the name of party A in original . 

- You should also collect the chain of the property papers. 

- However, without the execution of sale deed in your name , you can also enter into an Indemnity bound with party B as well. 

Mohammed Shahzad
Advocate, Delhi
13199 Answers
197 Consultations

5.0 on 5.0

If the gift deed was executed by a registered deed, then you may scrutinize the gift deed through a lawyer and confirm if it was executed adopting the legal procedures properly.

2. You have to confirm if A had mortgaged  the same with any other creditor earlier or subsequently.

You can take the assistance of a local advocate in this regard.

3. The public notice inviting objection to purchase this property would be a good idea.

T Kalaiselvan
Advocate, Vellore
84852 Answers
2188 Consultations

5.0 on 5.0

Dear Sir,

Since you are investing huge amount to purchase the property you should take legal opinion in writing from experienced property lawyers. The opinion of property lawyers will be based upon the contents of each document and he will find out whether there is any missing document etc.

Kishan Dutt Kalaskar
Advocate, Bangalore
6136 Answers
487 Consultations

4.8 on 5.0

1. If the Original Deeds are with the Party B, then the property appears to be out of mortgage.

 

2. Find out whether the recitation made in the gift ded is correct or not and is not likely to be challenged later on.

 

3. Make a Registry as well as Court search for 12 years to ensure that there is no charge/claim ion the said property.

 

4. It will be prudent on your part to engage a local lawyer for submitting you a due diligence report after covering all the points mentioned above before deciding to buy the said property.

 

5. Buying the property at less than the circle rate by Rs.5 lakhs will invite I.Tax claim on the said Rs.5 lakhs considering it as your income. The Registrar also will charge registration fee and stamp duty on the circle rate only.

Krishna Kishore Ganguly
Advocate, Kolkata
27219 Answers
726 Consultations

5.0 on 5.0

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