• Sale deed through impersonation

Hello All,

Background:

My Father purchased a 2 bhk flat in 1993 in Chennai. He died in 2001. My mom, Sister and Myself are legal heirs(all major). My family went through financial crisis. Due to these events, my mom mortgaged property to a third person without knowledge of sister and myself.  He converted mortgage into sale deed through act of impersonation of legal heirs. Third person managed to get the sign of my mom during sale deed registration. My mom alone signed in that sale deed. She says she was not aware that she signed for sale deed. She approached this third person all alone, and I believe she didn't want to reveal bad financial burden to children . Hence, we were not aware of all her financial transaction until recently. Neither my sister nor myself signed in any registration documents. After converting it to sale deed, that third person mortgaged that property in a bank. He took loan for 9 lacs in 2008 from bank. My family came to know of this event in 2014. My mother didnot reveal anything about this incident. I filed a civil suit in 2014. Interim order to bank was sent. Sister and myself are plaintiffs. Mom, Bank, and third person have been put in defendent list. Third person and Mom has now been ex-parte. Interest in bank has accumulated to 17 lacs. We approached Bank for settlement. We agreed to pay closer to original principal amount that the third person took from bank in 2008. What will be the next steps to cancel the sale deed and get the property back quickly. 

Following are the questions.

1. Can bank transfer/register the property to original legal heirs if they agree for settlement?
2. Bank said it has issue in handing over document post settlement. Bank demands court direction for hand over document to in case of settlement agreement. What will be the procedure for this option.
3. Another option bank may opt based on the discussion is to hand over the document to court. Does handing over document to court is a wise decision? What will the procedure or next steps for this option.
4. How the settlement process will happen if bank agrees and how cancellation of sale deed happens [Irrespective of whether bank agrees or not for settlement], and how the property will be transferred if bank agrees.What will the procedure or next steps for this process.

 If Bank not agreed for settlement:

1. can the bank interest be kept on hold until the proceedings are over?
2. Does bank entitled for any share in the property if they are not ready for settlement?
3. Is there any provision like compensation in Indian law for mental agony and distress that is caused by delay in getting a property back after a forgery act by some third person. 

 How much time it will take to complete whole process. I need to sell this property for my Higher education. The whole delay in process is creating a mess. I went ahead with civil suit and did not lodge any complaint as my mother signed in that sale deed.

Thanks.
Asked 9 months ago in Property Law from Chennai, Tamil Nadu
Religion: Hindu
1. Which suit did you file? When the mortgagee had executed a forged sale deed then a suit for cancellation of the mortgage and sale deed had to be filed against the mortgagee and the bank. Be that as it may, the bank can deliver the original documents to the legal heirs only if a consent decree is passed by the court. This is because third part rights have been created by the mortgagee, which have not been successfully impeached in the court thus far.

2. If the bank produces the documents in the court the original legal heirs can apply to the court for the release of the documents.

3. Unless the sale deed is cancelled by the court or third party to whom the property has been sold agrees to cancel the sale deed the deed will stand its ground.


Ashish Davessar
Advocate, Jaipur
18049 Answers
445 Consultations
5.0 on 5.0
1. The interest will keep on accumulating.
2. The bank can auction the property to apply the sale proceeds towards repayment of loan, to preempt which injunction may be sought against bank.
3. It seems that you are not on the right path. You should have filed criminal complaint for cheating and forgery against the mortgagee, in the absence of which a suit for compensation will be without vigour.
Ashish Davessar
Advocate, Jaipur
18049 Answers
445 Consultations
5.0 on 5.0
1) your mother could not have  sold the entire flat to third person  as she had only one third share in flat .

2)if sale deed is set aside bank would not receive any money 

3) it is in bank interest to settle . 

4)if you  pay bank dues bank can reach settlement with you 

5) original documents cannot be handed over to you in absence of court orders as flat was mortgaged by third person only 

6)you will have to reach settlement with bank and third person 

7) depositing original documents in court on repayment of mortgage amount is feasible proposition 

8) bank interest would not be kept on hold 

9) you ought to file criminal complaint of cheating , criminal breach of trust against third person as your signatures had been forged 
Ajay Sethi
Advocate, Mumbai
23079 Answers
1212 Consultations
5.0 on 5.0
1) consent terms would have to be filed in court 

2) your settlement would be only with the bank case against third person would go on 

3) it may take some years for suit to be disposed of 

4) settle with third person also for quick settlement 

5) if bank does not come forward for settlement it cannot auction the property if stay order has been granted by court 
Ajay Sethi
Advocate, Mumbai
23079 Answers
1212 Consultations
5.0 on 5.0
1. A MOU will be executed between all the parties to dispute then and filed in the court for an appropriate order.

2. There is no time limit in respect of settlement to be arrived at and also the order to be passed by the court.

3. Inordinate delay in the disposal of the case can be remedied by moving the HC.

4. The title will flow from the decree and mutation can then be made.

5. The bank may apply for vacating the stay against auction, and if it is accepted then it may auction the property.
Ashish Davessar
Advocate, Jaipur
18049 Answers
445 Consultations
5.0 on 5.0
1. Can bank transfer/register the property to original legal heirs if they agree for settlement?
The property has been mortgaged to bank for loan, so once the loan amount is repaid or discharged, the bank shall release the mortgage in favor of the borrower.  It will not transfer or register the property to original legal heirs. 




2. Does bank entitled for any share in the property if they are not ready for settlement?

The bank will always agree for closure of loan properly as per the conditions, therefore there is no question of not ready for settlement.  If the loan is not settled the bank may initiate legal action s per rules to recover the loan including bringing the property to auction. 



3. Is there any provision like compensation in Indian law for mental agony and distress that is caused by delay in getting a property back after a forgery act by some third person. 

First of all put efforts to redeem the property and then think about fighting for the loss of mental agony. If at all you have to fight for mental agony, it will be against your mother because she was the cause for all this troubles and tortures. 





How much time it will take to complete whole process. I need to sell this property for my Higher education. The whole delay in process is creating a mess. I went ahead with civil suit and did not lodge any complaint as my mother signed in that sale deed.

Since this is a civil suit, it will take years to get disposed provided you scrupulously follow it or else you may even lose the case. 


T Kalaiselvan
Advocate, Vellore
13902 Answers
127 Consultations
5.0 on 5.0
1. If bank and ourselves agrees for settlement, then what are the legal steps/procedures involved as I am layman in this legal proceedings.

The bank will be inclined to close the mortgage loan and shall issue a release letter to the registrar after which the property will become free from mortgage encumbrance, however the borrower only will be entitled to get the property back and not you until you do not have any registered agreement from the borrower in this regard. The further decision will depend on the court verdict alone, the bank may not be able to help you as per your desire. 




2. What is the approximate time period for each of the above steps in order to get decree from the court after bank settlement. Because I am more concerned about time lines.

The time taken in court cannot be predicted because it depends on various factors including frequent advocate boycotts.


3. If timeline is more, what are the quickest way to get decree from court.

There is no lid down procedure that can be explained to you in this regard, you have to wait for the completion of court proceedings as the way it moves on, consult your advocate on this. 



4. Post decree, how to convert the property title into original legal heirs.

execute a partition deed and get it registered on individual's names which will confirm he title. 


5. What bank can do to the maximum extent if it does not come forward for settlement. 

The bank may bring the property to auction for default in repayment beyond certain extent.
T Kalaiselvan
Advocate, Vellore
13902 Answers
127 Consultations
5.0 on 5.0

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