Hi I am interested in buying a commercial shop in Mumbai suburban area. I have the following situation 1) The building was constructed in 1963 and it was purchased from builder by Party 1 in the year 1963 with a revenue stamp of Rs 3 2) Party 1 sold the shop to Party 2 in Aug 1980 and the agreement was executed on Rs 5 stamp paper but no stamp duty was paid nor any revenue stamp is there on the agreement. Party 2 has a share certificate issued by CHS in 2007 3) Building went for redevelopment in 2013. There is an agreement between party 2 and the new builder was done and CHS has all docs including deed conveyance, etc. Problem is 1) Original agreement for 1963 and 1980 is misplaced 2) Stamp duty is not paid for the purchase in 1980 My questions is 1) As a purchaser will i be liable for any previous errors/default in stamp duty by (Party 2)? 2) Lost agreement of 1963 and 1980 (old chain) will it create any problem in future? 3) What are things I have to be mindful before i get into this transactions, how can I safeguard myself from any future problems arising from either lost of old agreement or stamp duty not paid by earlier purchaser?
You are not liable for previous defaults on payment of stamp duty
2) you need original chain of documents of title .you would not have clear and marketable title to property
3) ask seller to issue public notice about loss of original documents
4) he should file police complaint about loss of originals
5) indemnity clause must be in sale deed to indemnify you in case of third party claims
Yes, you have to pay evaded stamp duty for the year 1980 plus penalty.
For that missing complaint will file and paper publication.
1. No. But after purchase of property if authority levy any duty then liability would be casted upon you and the shop would be liable to be attached etc. Beside stamp duty authority may also impose penalty which should be 10 times of present applicable stamp duty.
2. If documents are registered then get the certified copies. Missing agreements create a doubt.
3. Carry due diligence through a competent advocate.
Yes if stamp duty is not paid then the documents can be impounded. But you can make the earlier owner pay
1. No
2. Yes, it may create problem at the time of selling the property ,
- The seller can lodge a complaint/FIR for the missing of the said chains , and publish a notice in the two leading newspaper for the said missing of papers.
3. There must be a clause in the sale deed to indemnify you in case any trouble create in the title of the property.
Hi Adv Ajay Sethi, Thanks for your detailed response. I would like to ask what do you mean by "you would not have clear and marketable title to property" If the seller puts ads about loss of docs, file police complaints and is ready to sign indemnity bond... do you still think that the title of property will create a hurdle in future if i wish to sell it or take a loan on it? If he does all the above then can we say that the title will be clear and marketable? Also let me know where is your office in Mumbai..Thanks
You need original chain of documents to have clear and marketable title for property
in present case you cannot even obtain certified copy of said documents as there is no registered sale deed
3) if you sell the property in future you may not get market price for your property
My office is in town . You can do google search and obtain my address
It can create hurdle only during selling
1. Basically the seller is not having clear and marketable title to sell this property in your favor. You cannot be held liable for the previous stamp duty but the seller canot sell the property in your favor without the registered title document on his name.
2. Yes these documents are essential to confirm the title to the seller.
3. First of all whether those documents are available or not, is not a major issue, because the sale agreement is not a title document, a document containing the message of acquiring the property on a stamp paper worth Rs. 3 is not a document to confirm the title to the holder, hence the subsequent sale agreement in the similar manner is also not a valid document.So it is not advisable to purchase the proeprty even if the original sale agreements are available because the sale deed only is considered as title document to indicate the title of the seller.
If the seller is not having clear and marketable title to sell the property the buyer even if he is buying the property by any means, will not have title over the property hence he cannot sell the property.
The documents what you have referred are sale agreement on Rs. 3 revenue stamp paper receipt and Rs. 5 stamp paper, it means these are not registered document, therefore you cannot buy the property from the person who is not having a registered document on his name,
If you still buy it then you may not be able to sell it in future neither you will be able to get loan from bank without clear and marketable title.
Dear Client,
In this situation, it is important to note that you are not responsible for any past defaults regarding the payment of stamp duty. However, to establish a clear and marketable title to the property, it is crucial to possess the original chain of documents. Unfortunately, without the registered sale deed, obtaining certified copies of these documents becomes challenging.
To safeguard your interests, it is advisable to request the seller to issue a public notice about the loss of the original documents and also file a police complaint in this regard. Additionally, when proceeding with the sale, it is crucial to include an indemnity clause in the sale deed. This clause will protect you from potential third-party claims that may arise.
However, it is essential to be aware that the absence of the original chain of documents and the unavailability of a registered sale deed may impact the market price of the property in the future. Ensuring all necessary steps are taken to minimize potential risks becomes essential in such circumstances.
- Since, the earlier purchaser having registered sale deed in original , then there will not any trouble in future , if the above mentioned ways adopted .