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Purchased a Property which is Mortgaged

(Querist) 08 March 2011 This query is : Resolved 
Hi Sir,
We have purchased a property 3 years back for 6 lacks rupees.
We have taken EC certificate against that property and there were no issues.
First we paid 3 lacks as an advance amount and during registration time we paid rest of the amount. That time the owner of the property told us that Parent Document is currently with somebody and their family gave us a written statement saying they will return the parent document within a year of time. 3 weeks back some body from HDFC bank came and informed us that the purchased property under mortgage with HDFC and they have Parent document with them. We have asked our seller about this and he is not ready to make that outstanding loan amount.Now, HDFC bank ask us to vacate from this property and they said this property will come to auction soon. We are all so afraid and teased by HDFC bank and don't know what to do. Infact my father decided to get some loan against jewels and he trying make the payment which is actually outstanding against our property. My intention is, during EC request, this mortgage was not picked up. So we paid all the money infront without Parent document.
Can you please advise us on this.. What can be done with Bank or Seller. Because the outstanding amount is almost 3 lacks now..
A V Vishal (Expert) 09 March 2011
Generally banks mortgage property for loans by simple deposit of title deeds, hence the EC showed a negative report. However, the road is not closed for initiating action against the vendor. The sale deed must surely have an indemnity clause under which you can not only claim the amount back along with interest and damages but also sue the vendor for cheating.

As far as the banker is concerned since the property is mortgaged to the bank they have first charge against the same.
Y V Vishweshwar Rao (Expert) 09 March 2011
The Memorandum of Equitable Mortgage is not Registered reflecting the Mortgage by Vendor in favour of HDFC - Or

By the date of Equitable Mortgage the Registration of the Memorandum was not compulsory by The Registration Act -

However the Fact is that the Title deed is not with Vendor and not delivered to you - This aspect was to be taken care while purchasing the property . Course of action - I Agree with Mr A V Vishal !
madan kumar tiwary (Expert) 09 March 2011
Immediately file Criminal case against the seller. It is a fraudulent act. you will get relief.
RAJU O.F., (Expert) 09 March 2011
If bank has taken steps for auction under Securitisation Act, file an Appeal before jurisdiction DRT and seek interim stay Order. Also prefer criminal complaint against the vendor who cheated and sold the property and compell him to clear the bank dues. In case you settle the dues with the bank, for getting release of the EM and the documents, seek an Order from DRT, directing the bank to deliver the documents to you, on remittance of the loan dues.
malipeddi jaggarao (Expert) 09 March 2011
Equitable Mortgage is valid and will not reflect in the books of sub-registrar or EC. Previously EQM is stamp duty free and no registration formalities. Now many State Governments impose stamp duty for registering memorandum of EQM with sub-registrar. In your case it appears that EQM is created when there was no stamp duty. All subsequent transactions are subject to this prior charge. HDFC Bank has valid title. Course of action:
If the value of the property is disproportionate to the debt due, you can also repay the debt and get back the original documents directly from the Bank, ofcourse, with the consent of your vendor. You, along with the vendor can request the bank for a compromise to reduce the interest burden Third option is as suggested by Mr.Vishal. In any case filing an Appeal before DRT will not yield any positive result as per my opinion.
Uma parameswaran (Expert) 09 March 2011
Similar type of query came early. You can take criminal as well as civil proceedings against the seller.
Nathan Murali (Querist) 09 March 2011
Thank you very much to all of you. We will pay the outstanding amount to the bank and Will try to get the Parent document and the Patta.Hope Bank will return those documents immediately.
About the Vendor, he visited my home and had discussion with my father, he requested us to pay the bank dues and he promised that will return that money back in 3 months of time. Coming Friday they are all going to HDFC LTD, Madurai.
Please let me know if any issues with this..


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