Criminal Trident Pack: IPC, CrPC and IEA by Sr. Adv. G.S Shukla and Adv. Raghav Arora
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Deposit of Title Deeds

(Querist) 08 August 2008 This query is : Resolved 
One Bank has branch which is not notified town as per Transfer of Property Act where one person has deposited Agreement to Sale of his Flat with intent to create Deposit of Title Deeds. However as it is not a notified town, the documents have been deposited by him with another branch which is a notified town and the disbursement of loan has been shown in the villge which is notified and account is maintained therein. The bank did not cared to get noted the charge on 7/12 extract of said property. subsequently after 5 years my client has purchased the said property who is a bonafied purchaser for value without a notice. he had published a notice in largest daily circulating in the area but he didnot received any objection. he has taken all the care he can. As the charge has been not noted and as there was no objection, the mortgagor has sold the property to my client and has now absonded. Now Bank has started the proceeding under 13(2) of SARFESI Act against my property and to protect my property MY client has filed a suit for injunction and his contention is that There is no valid deposit of title deeds, moreover as they are not deposited with the branch which is notified, its not valid one and bank has no charge. So also Agreement to Sale cannot be a document of Title. Now Bank is saying that its mortgage is valid one and there is a correct deposit of title deeds. Please send me the authorities of Supreme Court on this point saying that Deposit of Agreement to Sale is not a Deposit of Title Deeds. and if documents are not deposited in a notified town, it will not create a valid charge and there is no valid mortgage.
KANDE VENKATESH GUPTA (Expert) 08 August 2008
Agreement to sell is not a document of title. As such, the mortgage is illegal. You can certainly challenge the action of the bank. I will try to get the citation required for the purpose.
R.S.Rajesh (Expert) 09 August 2008
Firstly,In general , the agreement of sale does not confer any title over the properties agreed to be purchased. However, the terms & conditions/ obligations have to be seen in the agreemnt entered between the parties. Even, if the purchaser (proposed) is not under any obligations for payment of any purchase consideration, the title will not be transferred due to want of registration, since the sale deed is to be executed in persuance of the sale agreemnt whcih is a compulsory registarble document in terms of section 17 of the Registartion Act.

Secondly, if the documents of tilte is not deposited in the Notified Town, there is no valid equitable mortgage in terms of Section 58 of the TP Act and the same cannot be enforced.
Thirdly, if the action is taken under 13(2) of the SARFAESI Act by the bank,having regard to section 34 of the Act, the same has to be challenged before the concerned DRT under Section 17 of the Act, as per the deciscion of the Supreme Court on 8.4.2004 in Mardia Chemicals Ltd. case.
anantha krishna n.v. Advocate (Expert) 22 August 2008
I agree with the above opinions.

friend, why do you need a citation of supreme court as the very section says so. i.e. deposit of TITLE DEEDS. Agreement of sale is not a TITLE DEED. An agreement can be repudiated or modified into a new agreement or whatever. Unless a person holds a valid REGISTERED DEED in his favour he cannot deal with the property and create third party interest therein.
One thing is not clear from your message.
Is the person who deposited the AGreement with the Banker and your client's vendor one and the same.
if yes, I would have filed a criminal complaint as well on him for cheating and get him arrested. Your client is entitled to set criminal law into motion apart from asserting his civil rights.

What is the stage of injunction suit? Did you mention the issuance of SEc.13(2) notice? How did you get knowledge of 13(2) notice? Put bank on notice of these events and state that you would haul up bankers also for vexatious and malicious litigation without any right to proceed against you. Quote heavy damages to get the banker to terms at the earliest.

anantha krishna n.v. (Advocate AP High Court, Hyderabad,, 9246531895)

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