• Property dispute - fraudulent gift deed to family member after sale deed

Mr.KTS had received monies from my father which he could not return. Subsequently, KTS executed a registered Power of Attorney (POA) in favor of my uncle in June 2009. The POA acknowledges receipt of amount by KTS from my uncle at the time of execution. The POA does not state that it was executed as security for a loan or conditional arrangement.
Using the POA, my uncle executed a registered Sale Deed in favor of my father in Feb 2010.
After the sale, KTS requested permission to continue residing in the property and my father permitted the same. No lease agreement, rent arrangement, mortgage document, reconveyance agreement, or written repurchase agreement was executed.
In Sep 2010, after the sale deed had already been executed, KTS cancelled the POA and thereafter executed a registered Gift Deed in favor of his wife Geetha in respect of the same property without our knowledge.
A significant fact is that the 2009 POA executed by KTS contains updated property boundaries. However, the Sep 2010 Gift Deed uses older boundary from the mother document, despite neighboring ownership having changed by then. This suggests concealment.
For many years, patta, property tax and electricity records remained on KTS's side due to trust.
In 2024, we first became aware of Gift Deed and transferred patta to my father's name and also submitted complaint to RDO alleging that the Gift Deed was fraudulent.
All this while:
1.	KTS has never challenged the February 2010 Sale Deed nor filed suit seeking cancellation of our Sale Deed.
2.	There is no written document stating that the transaction was merely security for a loan.
3.	The POA acknowledges receipt of consideration.
4.	KTS has remained in physical possession since 2010.
My questions are:
1.	How strong is my father's title based on the POA and Sale Deed?
2.	If the Sale Deed is valid, what is the legal effect of the subsequent Gift Deed?
3.	How strong would a defence be that the transaction was only security for a loan despite the contents of the registered POA and Sale Deed?
4.	Does KTS have a credible adverse possession defence?
5.	Does the long delay create a serious limitation issue?
6.	Does the boundary discrepancy strengthen an allegation of fraudulent intent?
7.	What is the most appropriate civil remedy and litigation strategy?
8.	Do the facts disclose a cognizable criminal offence justifying a police complaint/FIR?
9.	Should a police complaint and civil suit be pursued simultaneously?
10.	Should I first pursue a police complaint to ascertain KTS's stand before filing the civil suit?
11.	What is the limitation risk in filing a declaration suit and recovery of possession suit in 2026 based on these facts, and from what point would limitation likely be computed?
12.	Would transferring property from father to mother before litigation create any legal advantage or disadvantage?
I would appreciate a candid assessment of the strengths, weaknesses, risks, and recommended sequence of action
Asked 7 hours ago in Property Law
Religion: Hindu

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2 Answers

Father has good case on merits once sale deed is executed and registered father is absolute owner of property 

 

2) gift deed is void as donor had no rights on tje property .suit has to be filed to set aside gift deed 

 

3) delay in filing suit has to be explained that you became aware only recently and has filed suit within 3 years of knowledge 

 

4) seek stay orher restraining sale  of property by the donee 

 

5) file suit for eviction of seller 

 

6) criminal case of cheating and criminal breach of trust is made out 

 

7) both cases should be filed simultaneously 

 

8) limitation period starts from discovery of fraudulent gift deed 

 

 

Ajay Sethi
Advocate, Mumbai
100551 Answers
8221 Consultations

1. Your father derives title by the registered sale deed executed by the landowner through his power of attorney agent, hence the title is very much valid.

2. The sale deed was executed by the power agent even before the POA deed was cancelled/revoked by the principal hence the cancellation of the power deed has no effect to the sale of property by a registere3d sale deed, the subsequent gift deed becomes a sham deed and not valid in the eyes of law..

3. Once the sale deed was registered by a registered document, there is no question of security for loan or any other stand taken by the loand owner at this stage.

4. KTS knew about the transfer of his property through his power agent to a third person however he is occupying the property by permission granted by the new owner, therefore since he is is under permissive possession, he cannot claim title by adverse possession.

5. The knowledge of gift deed came to you just within three years as on date hence there is no delay on your part.

6. No.

7. To file a suit for declaration of the gift deed as null and void and to evict the previous owner as well as for recovery possession of property.

8. No.

9. No criminal complaint is maintainable.

10. No, because the police will not entertain criminal complaint for the civil nature dispute.

11. Since it is within three years of the knowledge of gift deed, you may have to file the suit to declare the gift deed as null and void as well as for recovery of possession before the expiration of three years period from the date of knowledge. 

12. Transferring the property by papers may not be very effective, hence better take possession and proceed with the proposed transfer  to avoid multiplicity of proceedings.

T Kalaiselvan
Advocate, Vellore
90755 Answers
2523 Consultations

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