• Gift of mortgaged property

1) Uncle owns a House Property where he, wife and son resides.
2) The property has been mortgaged in bank.
3) By mistake uncle has done a gift deed of the Mortgaged Property to his wife without the consent of the bank.
4) His wife in turn has done a gift deed to son without Uncles consent.
5) When my uncle went again for a top-up loan he came to know though Encumbrance Certificate that his property which has been gifted to wife has been transferred to his son's name without his knowledge.

Question ?

My uncles wants back the property in his name. What should be done? Is this legally valid? Kindly advise Sir.
Asked 10 months ago in Property Law from Chennai, Tamil Nadu
Religion: Muslim
1) uncle cannot execute gift deed of property mortgaged to bank without the bank consent 

2) there is generally clause in loan agreement that no third party rights would be created by the mortgagor without bank consent 

3) bank has to challenge the gift deed made by uncle in his wife name and subsequent gift deed made by wife in favour of the son 

4) your uncle should inform the bank of he gift deed . 
Ajay Sethi
Advocate, Mumbai
23237 Answers
1219 Consultations
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1) gift deed would other wise be valid . i presume it is duly stamped and registered 

2) once gift deed is made by father in favour f his wife she would be absolute owner of property 

3) she can execute gift deed in favour of her son 
Ajay Sethi
Advocate, Mumbai
23237 Answers
1219 Consultations
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1. Your uncle has illegally transferred his property to his wife during the pendency of the mortgage,

2. His wife is not required to take any body's consent for transferring her property. However, the said transfer is also illegal since your Aunty got the property from your uncle illegally without Bank'as consent,

3. How can your Uncle expect to get top up loan when he himself has illegally transferred his mortgaged property in his wife's name?

4. The property was in the name of your uncle when it was mortgaged and mortgaged property can not be dealt with. So, legally the property still should stand in the name of your uncle since all subsequent transfers are illegal,

5. Your Uncle (or the Bank) should file a declaratory suit praying for a declaration that the property is mortgaged property which can not be transferred without Bank's consent for which it the subsequent transfers are illegal and void at law and direction upon the Registrar to cancel the said subsequent Registrations.
Krishna Kishore Ganguly
Advocate, Kolkata
12112 Answers
231 Consultations
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1. No. The validity of registration is not with retrospective effect,

2. The transfer of the mortgaged property to your Aunt was illegal and so is the subsequent transfer to her son by herself,

3. Paying back the dues post registration will not validate the said illegal registration. 
Krishna Kishore Ganguly
Advocate, Kolkata
12112 Answers
231 Consultations
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When the property is in mortgage, the gift deed even though registered does not have validity and the rights will not transfer on your wife.  Likewise, the gift deed executed by wife in favour of your will be infructuous.  

Even if the son comes forward to pay the loan amount, the deeds will not get validity.  The procedure is first you have to clear the loan, then take no objection from the Bank.  Then you have to creat gift deed.  

Cancel the above two gift deeds by way of cancellation deed.  
Ravinder Pasula
Advocate, Hyderabad
316 Answers
68 Consultations
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Once the gift deed had been executed in favour of wife she was at liberty to gift it further, but the fact remains that at the time of execution of gift deed the mortgage was still in subsistence. It is the bank which can file a suit for declaration of the deed as illegal. The father can challenge the gift deed on the ground that he executed it under fraud or undue influence. The bank's only interest is to get back with interest the loan which it had advanced, so it may in its discretion permit the son to repay the pending loan.
Ashish Davessar
Advocate, Jaipur
18102 Answers
448 Consultations
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My uncles wants back the property in his name. What should be done? Is this legally valid? Kindly advise Sir.

He should first approach the bank and explain the circumstance.  After that he can contact his son and ask him to cooperate to cancel the gift deed which was executed in his favor, the son inturn may ask his wife to cancel the registered gift deed.  After this he can  very safely inform bankers stating the loan amount has been arranged accordingly.  This may help the uncle to retrieve the property and seek top up loan.
T Kalaiselvan
Advocate, Vellore
14008 Answers
127 Consultations
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If the son pays the pending dues loan amount to the bank on behalf of his father will the gift deed in sons name be valid?
Even then the bank will discharge the property on the uncle's name only after which the father can move the case accordingly.
T Kalaiselvan
Advocate, Vellore
14008 Answers
127 Consultations
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Hi, your uncle can't take back the property once you gift the property the interest in the property is automatically transferred.

2. Now  if the Son can clear the bank loan then he will get the property.
Pradeep Bharathipura
Advocate, Bangalore
4105 Answers
133 Consultations
4.3 on 5.0

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