Hello We had purchased a flat by doing registered agreement in Feb'2020 with the Builder. The same was mortgaged to our lender(PSU Bank) with a registered mortgage. We are occupying the flat for the last 1.5yrs. Last week, one representative of a lending institution came and informed that the Builder had done a sale agreement (Tripartite agreement in 2015 on stamp paper) and they had not received the EMI for last 10 months & hence they have the legal right on the property through Oral Equitable Mortgage(not registered) As of now, we are unable to contact the Builder & know his stand on this and have below questions. 1. Is the lending institution authorised to proceed against us under SARFAESI act/ through court? If yes, what should be our action plan? 2. is there any advantage of the registered sale deed & registered mortgage over the Tripartite agreement & the Oral Equitable mortgage? Is there any limitation period for proceeding on the basis of tripartite agreement? Any other suggestions/thoughts are welcome.
First answer received in 10 minutes.
Lawyers are available now to answer your questions.
Any mortgage of property has to be registered except mortgage of property by deposit of title deed.
Lender is trying to play fraud upon you. Your mortgage is prior and it will stand not the latter mortgage.
Lender bank can itself issue a notice to you under Section 13 (2) of SERFAESI it need not go to Court. After receipt of notice you can approach DRT against bank as you have registered deed.
1. The unregistered sale agreement and oral equitable mortgage deed is not a legally valid document that they can invoke sarfaesi act.
They may approach court with a suit for recovery based on the sale agreement, but since that is also not a registered document, the court may not admit their claim neither the property purchased by you by a registered sale deed would be attached by court
2. You are not a party to the tripartite agreement, the previous buyer and the builder are liable for that.
As you have purchased the property by a registered document, you do not have to be worried about it, your title is clear hence you can defend your interest in the case properly
Once registered sale deed and registered mortgage has been executed you have better title to property than oral mortgage and un registered agreement
2) yiur defence should be that you had purchased flat through registered sale deed and are in possession of the property
Dear Client,
In case of an unregistered sale agreement or Oral Equitable Mortgage, the SARFAESI Act cannot be applicable. The Act shall only be applicable to a registered mortgage of property.
The lending institution cannot claim right on a property over an unregistered mortgage.
Most importantly, since your mortgage is already registered, you need not worry about such circumstances.
Thank you.
In my view you are clearly duped by the builder
and now you should proceed with the following
remedies :-
The answer to your questions:-
1. Authority of lending institution to proceed under SARFAESI ACT and the action plan for the same :
ANSWER: Without careful scrutiny of the documents it is difficult to answer but prima facie I can suggest that the lending institution will not have the authority under SARFAESI ACT as the SARFAESI ACT is not applicable when "Any conditional sale, hire-purchase, lease or any other contract is done in which no security interest has been created."
2. Advantage of the documents and the limitation period :
ANSWER : You clearly have an edge as the documents with you are authenticated by the SUB-REGISTRAR and have a registered mortgage as well. As far as limitation is concerned, the limitation period will arise in you case will be counted from the date when the cause of action arised.
Yes they can proceed but you can seek stay in DRT on above grounds or move to HC under writ jurisdiction by fling wrote petition
1. the lending institution cannot move against you under SARFAESI Act. Simply because you are not the borrower of the bank. The lending institution has to file a regular civil suit against the builder and you for cancellation of the registered agreement of Feb 2020 and for possession. No case whatsoever is made out against you under the SARFAESI Act
2. you are a bonafide purchaser for value without notice. You would definitely not have knowledge about tripartite agreement between the builder, the lender and the borrower, because that agreement is not registered. So you are adequately protected.
3. you need not do anything. if the lender claims rights over the flat which is in your possession on the ground that that flat was mortgaged to the lender and could not have been sold by the builder to you, then the lender has to file a suit as above and prove the same
1. Yes, if the said property document is mortgaged with the bank by the builder
- You should lodge an FIR against the said builder , and file a compliant before the court for restraining the lender from taking possession from you
2. Since you have registered sale deed alongwith the possession of the property , then you have a better title.
