POSSESSION AND SALE OF PROPERTY

POSSESSION AND SALE OF PROPERTY

The secured creditor or his authorized officer may take recourse to one or more of the measures provided in sec.13 (4) of the Act to recover his secured debt who has the following options. He may take possession of the secured assets of the borrower including the rights to transfer by way of lease assignment or sale. He may take over the management of the secured assets of the borrower, including the right of transfer of lease assignment sale. He may appoint any person as manager to manage the secured assets, the possession of which has been taken over. The secured creditor may require by notice any person who has acquired any secured assets from the borrower and from whom any money is to pay the secured creditor so much of the money as is sufficient to cover the secured debt.

Both in the case of movable and immovable properties, it is obligatory to serve a notice of thirty days to the borrower about the sale. The notice of sale shall be also published in two leading widely circulated newspapers, of which one shall be of the local language. The public notice shall contain important details of the property, the amount of dept, reserve price, time and place of public auction earnest money to be deposited etc. The notice shall be affixed on the conspicuous part be put on website.Sale by any other modes than auction/tender shall be on terms settled between the parties. After confirmation and completion of sale process, the authorized completion of sale process, the authorized officer shall issue a sale certificate in favor of the purchaser in the prescribed format.

If the secured assets are movable properties, the authorized officer shall take the possession in the presence of two witnesses. The panchanama shall conform to the prescribed format. After taking possession, the authorized officer, shall prepare an inventory of the property as per the format prescribed and shall deliver a copy of such inventory to the borrower or his authorized agent.

If the property is subject to speedy or natural decay or expenses for keeping such property are likely to exceed the value of the property the authorized officer may sell it at once. It is the duty of the authorized officer to take proper care and take steps for preservation and protection of the assets. If necessary the assets may be insured until they are sold or disposed of.

While taking possession or sale of the secured asset, the secured creditor may request the help of chief metropolitan Magistrate or District secured assets fall.

Right of appeal.

Under sec.17 of the Act the person aggrieved by the actions of the secured creditor as provided in sec13(4) may make an application to the Debt Recovery Tribunal having jurisdiction, within 45 days from the date on which action has been taken. Similarly any person aggrieved by the order made by DRT under section 17 may prefer an appeal to the appellate tribunal within 30 days from the date of the order.

Transaction not covered under the Act.

The following transactions are excluded from the provisions of the SRFAESI Act.

a] A lien on any goods money or security given by or under the Indian Contract Act, Sale of Goods Actor Any other law for the time being in force;

b] Pledge of movables within the meaning of sec.172 of the Indian Contract Act.

c] Any conditional sale hire purchase or lease or any other contract in which no security interest has been created;

d] Any property not liable to attachment;

e] Any security interest created in agricultural land;

f] Any security interest for securing payment of any financial asset not exceeding rupees one lakh;

Limitation:

The provisions of the Limitation Act 1963 are application to the Act Therefore taking possession of the property or appointing a management of the securities are to be carried out within the period stipulated in the Limitation Act 1963

The housing loan borrower may note that if they default in payment of dues to banks and the loan account become NPA the banks can initiate action under the SRFAESI Act issue notice to the borrowers, take possession of the building and proceed to realize the dues by sale of the mortgaged property therefore it is suggested that the housing loan borrowers may repay the housing loan as per schedule to protect their property.

  

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SYNOPSIS ON RIGHT TO INFORMATION ACT

SYNOPSIS ON RIGHT TO INFORMATION ACT

Right to Information Act of 2005 enacted by two houses of Parliament has become operative from 12th October, 2005.Now this law has become applicable to whole of India.

This enactment gives a very important right to citizens. It is common knowledge to everybody that in most of the Government Departments and Municipal Corporations there is high degree of corruption. If the palms of the officers and the staff concerned are not normally greased nothing moves. Normally, only when the people grease the palms of the officers their things are done. This Act gives power to the honest citizen or honest developer to get his things done if there is gross delay.

Let us first understand certain important aspects of this legislation. Section 2(j) of the Act defines right to information. The same reads as under:-

“Right to information” means the right to information accessible under this Act which is held by or under the control of any public authority and includes the right to-

1) Inspection of work,documents,records;

2) Taking notes, extracts or certified copies of documents of records;

3) Taking certified samples of material;

4)Obtaining information in the form of diskettes, floppies, tapes, video cassettes or in any other electronic mode or through printouts where such information is stored in a computer or in any other device.

Now this right to get information is not  restricted only to Government and Municipal Corporations.

Let us see some practical uses –

The plans are submitted to the BMT for sanction. There is delay as the palms of the concerned officers are not greased. It is now possible for a citizen to ask the question and collect information like-

How many other plans were submitted on the day for sanction by the people?

What has happened to the said plans?

Out of them how many plans are passed?

What is the status of his plan?

It is also possible to ask for inspection of document, records, taking notes and obtain certified copies thereof.

Under the Act all the administrative offices of public authorities have to appoint Public Information Officer (PIO). We can apply for information to PIO of the concerned office. The information is to be provided within thirty day. There are certain charges liveable which are more or less considered as token amount. If the information is not provided or wrongfully refused, we can go in appeal to appellate authority who is an official in the same department, senior to the PIO of the  Department.

Against the decision of the Appellate Authority we can appeal to the State or Central Information Commissioner which is an independent constitutional authority.

Legal questions

The most important thing is that the Act imposes penalty on PIO at the rate of Rs 250/- per day for the dealy or for malicions denial of information. This particular provision helps the citizen to get information in time.

All the offices shall have display boards giving the name of the PIO and such other relevant information. In case you are not able to get at the PIO concerned you can address an application to PIO at the Head Office.  Even if you send application by mistake to the wrong PIO he is supposed to forward the same to the concerned PIO. Certain information is available at the website.

Advocate at Koramangala

Information which affect the sovereignty and integrity of India or security, strategic, scientific and economic interest of the state relation with foreign state and certain information as mentioned in Sections 8 & 9 of the Act may be denied.

If more and more people seek information under this Act there will be reduction in corrupt practices leading to efficiency  and transparency in public offices.

FORMAT OF THE APPLICATION

To,

The Public Information Officer

(Name of the Office with address)

1. Full Name of applicant.

2. Address.

3. Particulars of the information required:-

          (i) Subject matter of information.

          (ii) The period to which the information relates.

          (iii) Description of the information required.

          (iv) Whether the information is required by post or in person. (The actual postal charges shall be included  as additional fees)

4. Whether the applicant is below poverty line (if yes, then the photocopy of the proof thereof).

Place                                        (Signature  of  the Applicant)

Date:

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HOUSING FINANCE

HOUSING FINANCE

How to get home loan?

You need to approach a Housing Finance Company (HFC) / Bank with the latest salary slip and other relevant documents of yourself and your co-applicant, if any. The concerned officer of HFC/Bank after going through the details of the documents will informally tell you the loan amount you are eligible for and the terms of the same. Thereupon, you need to submit the prescribed application form along with the necessary documents. On receipt of the application form, the HFC/bank examines it, seeks clarification wherever necessary and conveys its decision to you. You are advised to visit more than one Housing Finance Company / bank since you are likely to get better terms/ larger loan amount at the discretion of the bank. 

What is the maximum amount a home loan borrower can borrow? 

Home loans generally provided are in the range of 75%-85% of the asset value. The amount of loan varies from one institution to another and the maximum loan amount may vary from Rs.1 lakh to Rs.1 crore. The primary concern of the HFCs in determining the loan eligibility is that you are comfortably able to repay the amount you borrow. Your repayment capacity is determined by taking into consideration factors such as income, age, qualifications, number of dependants, spouse's income, assets, liabilities, stability and continuity of occupation and savings history, etc. 

Can the housing loan be repaid ahead of schedule?

Yes, you can pay your loan ahead of schedule. However, it must be noted that some of the housing finance companies charge a fee for early redemption of loan. This fee can vary between 1-2% of the loan amount being prepaid. 

For what purposes housing loan can be availed?

Housing loan can be availed for the following purposes:

1.for purchase of plot;

2.for purchase of ready-built house;

3.for purchase of an apartment/flat;

4.for purchase site-cum-construction purposes

5.for repair and renovation of the existing building

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NOTARY

NOTARY

Notary:

Notary is person appointed by the Central Government or State Government under Notaries Act 1952. Central Government may appoint Notary for the whole or any part of India. Likewise the State Government may appoint a notary for the entire or for any part of the State. He is a public officer.

Functions of Notary:

The appointment, functions of Notary is governed by The Notaries Act 1952.

There are various functions of a Notary. We shall confine here to functions which are more relevant to the common public.

1. To verify; authenticate, certify or attest the execution of any instrument. The act refers to the instrument. The word instrument is defined in the Act, as every document by which any right or liability is purported or purports to be, created transferred, modified, limited, extended, suspended, extinguished or recorded. So every document is not an instrument, unless it effects right or a liability. Each word: verify, authenticate, certify, attest, have different meanings. Authenticating means, the notary has assured himself of the identity of person who has signed the instrument as well as to the fact of execution. Certify means to testify. Notary is bound to make entry of notarial act of certifying the copy of the document as true copy of original. Attest means to bear witnesses to.

2. To administer oath to, or take affidavit from any person.

3. To translate and verify the translation, of any document from one language into another.

4. To act as commissioner, to record evidence in any civil or criminal trial if so directed by the court or authority.

5. To act as arbitrator, mediator, or councilor if so required.

6. To do any other act this, may be prescribed.

When a Notarial is completed?

Every Notarial act has to be done under his signature and Notary seal with Registered No. and date.

Whether Notary Public has to ensure that proper stamp duty is paid on instrument?

Before doing any Act of Notary, it is the duty of the Notary to ensure that the proper stamp duty is paid, if not he may impound it under Section 33(1) of the Stamp Act. Apart from the regular stamp duty, the act of Notary attracts additional stamp duty under Article 42 of Indian Stamp Act and Article 36 of Karnataka Stamp Act, which is Ten Rupees.

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VERIFY THE DOCUMENTS BEFORE PURCHASE OF THE PROPERTY

VERIFY THE DOCUMENTS BEFORE PURCHASE OF THE PROPERTY

A clear and marketable title of property free from encumbrance would provide the owner a rightful ownership of such property and the possession of the property could be either physical or constructive. 

The foremost requirement to be exercised by the intending purchaser of property is to thoroughly scrutinize the title deeds of the property. There is no particular yardstick prescribed to trace out the title and, therefore, it depends upon the diligence and application of mind of the person who scrutinizes the documents. Scrutiny of documents is a specialized work and only persons who are well versed in scrutiny of property documents can analyse and give a clear opinion. Generally speaking, origin of the property, subsequent transfers and the present status are the three most important aspects which are taken into consideration to trace the title of a property. 

Modes of acquisition 

There are different modes of acquisition of property by any individual. Some of the modes of acquisition of property are Grant Land by the Government, allotment made by the Government/Various Autonomous bodies/Housing Societies, etc., acquisition of property under a Will, by purchase or inheritance. 

If the property is a Grant Land or allotted by any authority, then the Grant Certificate or Allotment Letter issued by the Competent Authority is necessary, apart from the other relevant documents. In the case of acquisition of property under a Will or by way of purchase, Gift, Exchange, Partition, Release, Settlement or inheritance, it is necessary to scrutinize and verify all the relevant documents of 42 years prior to the date of the present transaction to ascertain the transactions which have taken place during this period. This will enable the purchaser to make sure of the valid title of the vendor. At the same time, genuineness of the relevant documents at the time of transfer of property during this period has to be diligently examined. 

The next important step is to examine the present status of the property i.e. who is the present owner, whether his/her name has been recorded in the revenue records of the concerned Authority and whether property taxes are being paid by the owner periodically. 

Identification of the Property

The third step is identification of the property which is very important and a must. The purchaser should not only get the property identified but also should compare the description of the property shown in the document with the actual. Accurate details pertaining to the number assigned to that particular property, its extent, boundaries, name of the Village or Municipal Council or any Autonomous bodies within whose limits the said property falls are required to be ascertained. If the building exists on the particular property, then details pertaining to the existing building and whether the building is constructed in accordance with the building sanction plan and relevant Bye Laws of the concerned Authority has to be mentioned. Measurements mentioned in the document should tally with the physical measurements. In case the physical measurement mentioned in the document is less than the actually physical area available, the actual area available is to be considered for the purpose of payment and documentation.Normally,the purchaser shall pay either for the measurements mentioned in the documents or the actual physical measurement, whichever is less. 

Nature of Title

Nature of title such as tenancy right, occupancy right, possessory right, full ownership is also another important aspect which requires search and examination since the persons having some interest or right over the property are necessarily to be made as parties to the transaction, sale or mortgage. 

Tenanted property

If the property is tenanted, then it is very important to get confirmed from the tenant that there is no litigation pending between the vendor and the tenant pertaining to the ownership of the property or the tenancy rights. Further, it is also necessary to convey the tenant about the proposed sale transaction and to attorn the tenancy in favour of the purchaser. 

Conversion
Normally, agricultural lands cannot be put to use for non-agricultural purposes. To put to use the agricultural land for non-agricultural purposes it is mandatory to get the agricultural land converted for utilization for non agricultural purposes. However, there are certain exceptions to this mandatory requirement and the agricultural land can be put to use for non-agricultural purposes with the specific order of the competent authority. The special enactments applicable to grant lands also require to be looked into. Further, it is also necessary to find out from the Land Acquisition Department whether the property in question is under the orders of acquisition by the Government and whether any notification to this effect has been issued. by the Government. 

Encumbrance certificate

Verification of encumbrance certificates is a part of scrutiny of property documents to rule out any subsisting encumbrance over the property. But, such certificates cannot be totally relied upon since there are instances wherein transactions duly registered in the concerned Sub Registrars office are not reflected in the E.Cs issued by the department. In such cases it is necessary to do the search in the office of the Sub Registrar, on payment of the prescribed fees. 

Minors interest

In cases of sale of ancestral property, it is necessary to find out whether the vendor has a clear title over the property and there are no claims of minors interest. If the property proposed to be conveyed is ancestral property, then the involvement of Minors interest is very common. In cases where minors interest are being transferred or conveyed, permission from the court for conveying the property is mandatory under the provision of Guardianship and Wards Act. If the property is conveyed in contravention of the provisions of this Act, then such conveyance can be challenged by the Minor within three years from the date of his attaining majority or from the date of getting knowledge of such a sale. 

Thus, for purchase of property it is necessary to verify as to how the vendor has acquired the property. Only upon being satisfied about the valid title of the vendor, the purchaser can negotiate and enter into an agreement of sale with the vendor. It may be noted that if the property is a composite property, then most of the owners will retain the original title documents and only Xerox copies of such documents will be delivered to the purchaser. 

Since scrutiny of property documents is technical in nature, utilization of services of an experienced advocate in property matters would help the purchaser immensely and while scrutinizing the documents the advocate shall be able to decide as to which documents are to be in original and which could be certified copy or Xerox copy.

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INSURANCE

INSURANCE

Insurance policies like Standard Fire & Special Perils Policy, Marine (Cargo), Marine (Hull), Engineering and Burglary Insurance policies cover various types of properties.

Which policy best suits to household?

Householder Insurance Policy comprising of 10 sections, covers most of the risks faced by a household and is best suited one. 

Burglary Insurance cover:

It covers theft of property after actual forcible and violent entry or exit.

Industries and Civil Construction:

Two broad groups of engineering policies are available for industries:

1.Construction Phase Contractor All Risk Insurance, Erection All Risk Insurance, Marine-Cum-Erection Insurance, Contracts Works Insurance and Delay in start-up Insurance.

2.Operational Phase Machinery Breakdown Insurance, Boiler & Pressure Plant Insurance, Machinery Loss of Profit Insurance, Contractor Plant and Machinery Insurance, Civil Engineering Completed Risk, Electronic Equipment and Deterioration of Stock Insurance.

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Marine (Hull) Insurance:

It covers loss/damage suffered to a ship and machinery of vessel.

Marine (Cargo) Insurance:

The Insurance of goods, which are in transit from one place to another by any single or combined mode of sea, rail, road, air or inland waterways is Marine (Cargo) Insurance.

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Standard Fire & Special Perils Policy:

Building; Machinery & Equipment; Furniture; fixture & fittings, and stocks can be covered under Standard Fire & Special Perils Policy.

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WILL AND SUCCESSION

WILL AND SUCCESSION 

How can I revoke my Will?

The Will executed by a testator/testatrix can be revoked at any time during his or her life time in the following manner :

A] By executing another Will or Codicil.Such a Will or Codicil would automatically revoke the Will written earlier.

B]  By physically destroying the Will by burning, tearing or by any other mode of destroying the same.

C]  By a written declaration confirms the intention to revoke and this requires compliance of certain formalities as envisaged under the Indian Succession Act, 1925; and 

D]  By operation of law.

Is there any provision for safe custody of the will?

Yes.There is a provision for safe custody of will as provided in the Indian Registration Act, 1908.The testator or his duly authorized agent may deposit the sealed cover containing the will with any Sub-registrar for safe custody upon payment of prescribed fees.

The cover should  be superscribed with the name of the testator or his agent with a statement of the nature of the document.The deposited cover may be withdrawn by the testator or his agent on payment of prescribed fees. 

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