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VJVJVJVJVJ (Professional)     28 October 2011

House ownership

I have taken a flat with a bank loan. However, I have borrowed some money from my relative also to buy that flat. While borrowing fom relative, i have signed an unregistered stamp paper saying that till I repay the borrowed money back to them, they will have right to claim over the flat as second right owners after Bank. This document is not  registered, it is on Rs.20 stamp paper.

Is it possible for my relative to claim on the flat if i fail to return their money, as second right holder after Bank? Bank is not aware about the my borrowing from my relative and signing of such stamp paper.

Forum members, would you please suggest what are the repercussions of such document in case I am unable to repay them the borrowed money.


 5 Replies

Adv. K.S.A.Narasimha Rao (legalquestadvisor@gmail.com )     28 October 2011

Dear VIJ.........

If you admit that you have taken loan from your relative and created second charge over the property, then it is required to pay him the amount borrowed with interest or in the event of not admitting it, there will be no liability for repayment.

It is a moral responsibility to discharge the loan taken by you.

RevathiGanesh (Practicing Advocate)     28 October 2011

True it is Moral Responsibilty.  But what is the legal position here?

kumar t v s (advocate)     28 October 2011

There is no second charge created over the property but the amounts can be recovered by way of a recovery suit and attachment of property may be sought for enforcing recovery. Any such attachment is subject to first charge of bank.


The stamp paper document can be used as proof of debt subject to limitation. 

Adv. K.S.A.Narasimha Rao (legalquestadvisor@gmail.com )     29 October 2011


VJVJVJVJVJ (Professional)     29 October 2011

Dear all,

Thank you very much for the clarification. However, would be very helpful if you clarify me whether the Rs.20 stamp paper i signed is sufficient proof of admission of loan even though that stamp paper is not registered.

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