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Drafting Pleading and Conveyancing
Drafting Pleading and Conveyancing
Drafting Pleading and Conveyancing
CONVEYANCING
A COMPREHENSIVE GUIDE
Table of Contents
Introduction
OBJECTIVE OF PLEADING
Fundamental Principles of Pleadings
o Statement of Facts:
o Inclusion of Material Facts:
o Factual Basis, Not Evidence:
o Concise, Precise and Certain:
o #1. Facts, Not Law:
Examples of Deficient Pleading:
o #2. Material Facts:
Examples of Material Facts:
Examples of Facts Not Material:
Exceptions
o #3 Facts and Evidence:
The code of civil procedure includes certain rules, which we will elaborate on with the
help of appropriate illustrations:
o (1) Malice, Knowledge, etc.:
o (2) Implied Contract:
o (3) Order VI Rule 13 :
o (4) Order VI Rule 2:
When drafting a pleading, it is important to keep the following points in mind:
o a) Ensuring Precision and Uniformity in Names:
o b) Prudent Avoidance of Pronouns:
o c) Adherence to Appropriate Terminology:
o d) Unvarying Descriptions:
o e) Precise Incorporation of Statutory Language:
o f) Minimization of Conditional and Ambiguous Phrases:
o g) Provision of Requisite Specifics:
o h) Structured Division into Paragraphs:
o i) Abstaining from Redundancy:
Order VI Rule 14 outlines the requirement for signing the pleading, and the key
points to note are:
o The pleading must be signed by the party and their pleader (if any):
o Absence or good cause:
o Prevention of denial:
o Signature of the party concerned:
o Exception for absence or good cause:
o Authorized person’s signature:
o Presentation of authority to sue or defend:
Order VI Rule 15 outlines the requirement for verification of pleadings, and the key
points to note are:
o Every pleading must be verified:
o Verification by a party or another person familiar with the facts:
o Specification of verified facts:
o Signature and date of verification:
o Purpose of verification:
o Legal consequences of false verification:
o Importance and responsibility of verification:
Essentials of a Deed:
o The non-operative part:
o The operative part:
o The formal part:
CONVEYANCE DEED
Sale Deed:
Features of a Sale Deed:
o 1. Parties Involved:
o 2. Property Description:
o 3. Title and Ownership:
o 4. Sale Consideration:
o 5. Rights and Liabilities:
o 6. Transfer of Possession:
o 7. Legal Validity:
o 8.Indemnity Clause:
o 9. Execution and Signatures:
o 10. Registration:
Before incorporating a Sale Deed, certain provisions need to be taken into
consideration.
o 1. Agreement to Sell:
o 2. Property Documentation:
o 3. Due Diligence:
o 4. Stamp Duty and Registration:
o 5. Witness and Notarization:
o 6. Drafting the Sale Deed:
o 7. Execution and Exchange:
o 8. Mode of transfer of property:
Contents of Sale Deed:
o 1. Parties in the sale deed:
o 2. Description of the sales property:
o 3. Sales agreement:
o 4. Sale consideration:
o 5. Payment method:
o 6. Advance payment:
o 7. Transfer of title clause:
o 8. Delivery of the deed:
o 9. Indemnity clause:
o 10. Liability in the case of default:
o 11. Registration and witnesses:
o 12. Right to quiet enjoyment of property clause:
o 13. Reddendum clause:
o 14. Tandem clause:
o 15. Warranty clause:
o 16. Time is of the essence clause:
Registration of a Sale Deed
Agreement for sale
MORTGAGE DEED
o Establishing lender’s interest:
o Property as collateral:
o Foreclosure and possession:
o Auctioning the property:
o Lien on the property:
o Loan repayment:
o Transfer of interest:
o Purpose of securing:
o Distinction from transfer of ownership:
o Security for obligations:
o Rights and remedies of the lender:
DIFFERENCE BETWEEN MORTGAGE AND HYPOTHECATION
o MEANING
Mortgage:
Hypothecation:
o APPLICABILITY
o UNDER ACT
o INDICATION
o MORTGAGE INCLUDES-
“Mortgage by Conditional Sale”
A Usufructuary Mortgage
English Mortgage
Anomalous Mortgage
o Examples of anomalous mortgages could include:
Combination Mortgages:
Mixed-Mortgage:
Reverse Mortgage:
Bridge Loan:
REGISTRATION OF MORTGAGE DEED
When a Mortgage Deed is required:
Why a Mortgage Deed is required:
The draftsman should study before incorporating a Mortgage Deed, specifically
regarding the proper description of the property:
o Importance of Property Description:
o Specificity of Property Description:
o Compliance with Registration Requirements:
o Clarity and Certainty:
o Verification of Property Details:
o Compliance with Local Laws:
o Professional Assistance:
CONTENT OF MORTGAGE DEED
o 1. NAME OF THE PARTIES
o 2. Details of Mortgage Property
Description of the property:
Type of property:
Rights and responsibilities:
o 3. Sum advanced and its repayment terms:
Principal amount:
Repayment terms:
Mode of repayment:
Prepayment or penalty provisions:
Security provisions:
o 4. The Insolvency clause:
Insolvency definition:
Notification requirement:
Mortgagee’s rights:
Priority of payments:
Cooperation of the parties:
Discharge of mortgage:
o 5. Mortgage Clause
Contents of Mortgage Deed in view of Mortgage clause:
Identification of the parties:
Description of the mortgaged property:
Purpose of the mortgage:
Loan amount and interest rate:
Repayment terms:
Rights and obligations of the mortgagor:
Rights and remedies of the mortgagee:
Insurance and taxes:
Assignment and subrogation:
o 6. The clause on Possession
Transfer of possession:
Custody of title deeds:
Protection of title deeds:
Inspection of title deeds:
Return of title deeds:
Indemnity for loss of title deeds:
Endorsement of discharge on title deeds:
o 7. Contents of Mortgage Deed in view of Redemption Clause:
Repayment obligations:
Redemption rights:
Prepayment options:
Calculation of redemption amount:
Notice of redemption:
Redemption process:
Consequences of redemption:
Registration of Mortgage Deed: Ensuring Legal Validity
o 1. Importance of Mortgage Deed Registration
o 2. Mortgage by Delivery of Title Deed
o 3. Conditions for Valid Registration
Signing by the Mortgage
Attestation by Two Witnesses
Payment of Stamp Duty
Conclusion
o RIGHT OF REDEMPTION
o RIGHT OF FORECLOSURE
LEASE DEED
o A lease of immovable property, as defined in section 105 of the Transfer of
Property Act, consists of the following essential elements:
Essentials of Lease:
o (1) Parties:
o (2) Subject Matter of Lease:
o (3) Consideration:
o (4) Sub-Lease:
Important Points while Drafting Lease Deed
In the absence of a contract or local customary practice indicating otherwise, the
lessor assumes certain rights and responsibilities as described below:
Contents of Lease Deed:
Registration of Lease Deed: Importance and Key Points
o Introduction:
o Legal Requirement:
o Authentication and Validity:
o Admissible as Evidence:
o Protection of Rights:
o Public Notice:
o Prevention of Third-Party Claims:
o Stamp Duty and Registration Fees:
o Procedure and Documentation:
o Time Limit and Penalties:
o Consultation with Legal Professionals:
o Conclusion:
Documents Required for Registration of Commercial Lease Deed:
o 1. Power of Attorney/Board Resolution:
o 2. Identification Proof:
o 3. Address Proof:
o 4. Passport-sized Colored Photographs:
o 5. Company PAN Card:
o 6. Company Seal/Stamp:
Characteristics of Leases:
GIFT DEED
o 1. Definition of a Gift
o 2. Essential Elements of a Gift
o 3. Legal Formalities
o 4. Conditional Gifts
Important things to remember-
Competency of the Donor:
Disposing Power of the Donor:
Properties of a Valid Gift:
Well-Defined and Existing Property:
Transferability:
Present Existence:
Tangibility:
o Existence and Ascertain ability of the Donee:
1. The donee, who receives the gift, must be an existing person at the time of the
gift.
2. The acceptance of a gift is a crucial requirement for its validity, and the
following points clarify this aspect:
o 3. Minors lack the legal capacity to enter into contracts,
o 4. Section 123 of the Transfer of Property Act, 1882 establishes distinct
provisions for gifts involving immovable and movable properties.
For Immovable Property:
o The Transfer of Property Act identifies specific circumstances in which gifts are
deemed void. These situations are as follows:
o The Transfer of Property Act includes additional provisions regarding void gifts,
which are as follows:
CERTAIN IMPORTANT POINTS FOR GIFT DEED
o 1. Consideration Clause:
o 2. Possession of Property:
o 3. Free Consent:
o 4. Property Details:
o 5. Details of Donor and Donee:
o 6. Rights and Liabilities:
o 7. Rights of the Donee:
o 8. Delivery Clause:
o 9. Clauses for Revocation:
TYPES OF PROPERTIES CAN BE GIFTED:
DOCUMENTS REQUIRED FOR GIFT DEED REGISTRATION
STEP FOR GIFT DEED REGISTRATION
Gifts under Mohammedan Law
o Hiba:
o Ariat:
o Sadaqah:
Revocation of Gift Deed:
The grounds for revocation of a gift include:
POWER OF ATTORNEY
IMPORTANT POINTS TO REMEMBER BEFORE MAKING POWER OF
ATTORNEY
Authority of Donee
Content of Power of Attorney
o Identification of Parties:
o Intent and Scope:
o Durability:
o Effective Date and Duration:
o Powers Granted:
o Limitations and Restrictions:
o Revocation:
o Signatures and Witnesses:
o Notarization:
Registration and stamp duty of Power of Attorney:
WILL
WHO CAN MAKE A WILL?
REASON OF MAKING WILL
TYPES OF WILL
o (1) Privileged and Unprivileged Will:
o (2) Contingent / Conditional Wills:
o (3) Joint Wills:
o (4) Mutual Wills:
o (5) Duplicate Wills:
o (6) Holographic Wills:
o (7) Concurrent Wills:
Contents of Will
Registration and Stamp Duty on Will
Revocation of Will
Probate and Letter of Administration
Introduction
The art of drafting pleading and conveyancing in civil litigation is still in need of
further development. The importance of emphasizing the art of pleading as a foundation
course cannot be overstated. Without adequate training, young lawyers often prioritize
verbosity over clarity and conciseness. Consequently, cases that could have been
resolved swiftly end up dragging on for years due to faulty drafting. Irrelevant details get
included, and the client’s facts are not effectively presented. As a result, essential facts
become entangled with non-essential matters.
Lord Halsbury once said, “The purpose of a pleading system is to ensure
that both parties are fully aware of the issues to be argued and have the
opportunity to present relevant evidence.” Pleading is an art that demands not only
technical and linguistic skills but also expert knowledge of the law. Even experienced
lawyers and attorneys are not immune to mistakes, proving the challenges inherent in
the craft of drafting pleadings. In the realm of pleadings, extensive experience and
linguistic acumen play vital roles.
The ultimate evaluation of success hinges on the efficiency and systematic
presentation of facts in front of the court. When individuals turn to the court for help in
any legal matter, it is customary for them to create a document that outlines their
assertions and the corroborating facts. These detailed statements, known as pleadings,
form the cornerstone of all types of legal proceedings. No judicial system can dispense
justice unless the court is fully aware of the plaintiff’s claims, as well as the
counterclaims and defenses put forth by the defendant.
In ancient times, when the king held ultimate authority over matters of justice,
petitioners would personally appear before the monarch to present the facts of their
case. Following this oral hearing, the king would summon the opposing party and
attentively listen to their defense statements. This historical practice underscores the
significance of articulating one’s case clearly and ensuring that all relevant information
reaches the court’s attention. Pleadings form the cornerstone of effective
communication between the parties involved, facilitating a fair and just resolution of
disputes within the judicial system.
In the past, the king himself would engage in cross-examination or questioning of
the parties involved in a case. Following this process, the king would render a decision.
While written statements were not commonly employed, oral pleadings did exist. The
king and his courtiers relied on their memory to maintain a mental record of the
proceedings. Only a select few serious and significant cases were formally recorded.
Over time, the landscape of the judicial system underwent transformative shifts. The
administration of justice was disentangled from the executive branch and entrusted to
distinct courts of law. This restructuring was propelled by the mounting intricacy of legal
matters, resulting in a surge of litigation cases. The prospect of oral hearings,
reminiscent of antiquated practices, became increasingly impracticable due to this
escalated litigation. To grapple with this challenge, scribes were designated to diligently
record proceedings. Nevertheless, this practice waned over time, and litigants were
granted the option to present their assertions and contentions in written form before the
esteemed courts. While the precise juncture of this transition remains uncertain, its
impact on legal procedure was profound.
The trajectory of procedural evolution was shaped not only by historical precedence but
also by pragmatic considerations. The introduction of written procedures engendered
considerable enhancements, streamlining the responsibilities of the court and
circumventing the perplexities that characterized previous oral hearings. By the dawn of
the nineteenth century, the framework of pleadings had evolved into a meticulously
structured and intricate process.
As codified civil laws emerged, the foundational principles underpinning
pleadings were also enshrined in statutory constructs. In accordance with Order VI,
Rule 1, the term “pleading” encapsulates both the plaint and the written statement.
Mogha, in further exposition, broadened this definition, delineating pleadings as written
declarations meticulously crafted and presented by each party embroiled in a legal
case. These written statements encapsulate the essence of each party’s case and
provide comprehensive particulars to the opposing party, facilitating the construction of
a responsive case.
The “plaint” functions as the instrument to delineate the cause of action and the
essential elements underpinning the plaintiff’s assertion. This elaborate document
serves as the bedrock of the plaintiff’s case, offering lucidity regarding the legal
foundations of their claim. Converse to this, in response to the plaintiff’s allegations, the
defendant compiles a comprehensive document known as the “written statement.” This
written rejoinder encapsulates all pertinent material facts and reservations that the
defendant wishes to submit to the court, whether in acknowledgment or denial of the
plaintiff’s assertions.
Pleadings are the cornerstone of any litigation and necessitate meticulous
crafting. The avoidance of substantive omissions within the pleadings is imperative, as
their repercussions can be severe. Once the phase of evidence and argument unfolds,
parties are irrevocably bound by the points and issues raised within the pleadings. The
introduction of new grounds of claim or contentions inconsistent with earlier pleadings is
permissible only through formal amendment, as sanctioned by Order VI, Rule 17 of the
Civil Procedure Code. Instances of deviating from established pleadings can also
manifest in scenarios where a party seeks to assert a set-off.
The court retains the prerogative to permit modifications, acknowledging the
need for flexibility while preserving the integrity of pleadings. However, it is imperative to
ensure that the initial pleadings are comprehensive and sufficiently elucidate each
party’s assertions and defenses. This precludes the emergence of unforeseen issues
during subsequent stages of litigation, thereby facilitating a just and efficient resolution
of the matter. Pleadings encompass pivotal components such as material facts,
contentions, the plaintiff’s claim, as well as the defendant’s material facts, contentions,
denials, or admissions.
Two distinctive categories of counterclaims merit attention. The first category
encompasses counterclaims against the plaintiff’s demand, as stipulated in Order 8,
Rule 6. These counterclaims are permissible and constitute a valid response to the
plaintiff’s assertions. The second category encompasses autonomous counterclaims,
distinct from mere set-offs and potentially governed by other statutes. While courts may
not entertain the pleading of such autonomous counterclaims, if a defendant opts to
present such counterclaims, their written statement assumes the character of a plaint.
The divergent nature of these counterclaims, as well as their departure from routine set-
off scenarios, underscores this distinction.
A comprehensive grasp of varied counterclaim types and their treatment within
the legal framework is paramount for ensuring accurate and exhaustive pleadings. This
comprehension facilitates parties in articulating their viewpoints effectively while
adhering to the standards and protocols established by the court.
Lord Halsbury aptly encapsulated the essence of pleadings, emphasizing that
within a system of pleadings, the central objective is to ensure that each party is fully
apprised of the matters to be debated, affording them an opportunity to present
pertinent evidence. The principal aim of pleadings is to construct a framework that
furnishes both parties with comprehensive awareness concerning the subjects under
consideration. This awareness, in turn, enables parties to marshal and offer germane
evidence in support of their respective positions. Pleadings serve as a guiding compass
for parties navigating the legal process, fostering equitable and efficacious issue
resolution. By articulating the matters at hand explicitly, pleadings forestall any
unanticipated surprises during subsequent proceedings. Parties are afforded the
chance to foresee the arguments and evidence advanced by their adversaries. This
insight fosters a balanced terrain and upholds the principles of justice and fairness
within the legal realm.
Lord Halsbury’s observation underscores the pivotal role of pleadings in
facilitating thorough case preparation for parties. It underscores the imperative of a well-
crafted pleading as the foundation for skillfully presenting evidence and advancing
arguments within the courtroom. Individuals in pursuit of legal aid must furnish a
meticulous statement outlining their claims along with the factual underpinnings of those
assertions. These meticulously constructed declarations, encapsulating all contentions,
are referred to as “pleadings.” Pleadings constitute the bedrock of all forms of legal
proceedings.
The centrality of pleadings cannot be overstated. Irrespective of jurisdiction, no
judicial system can effectively dispense justice unless the court is comprehensively
apprised of the claims, contentions, counterclaims, and defenses put forth by the
parties. Pleadings serve as a vital instrument in furnishing the court with a
comprehensive understanding of the subjects under scrutiny. By methodically laying out
all contentions, pleadings confer lucidity and coherence to the course of litigation. They
empower the court to comprehend the myriad perspectives and arguments advanced by
each stakeholder. This comprehension is indispensable for the court to render an
informed and equitable judgment.
Consequently, the meticulous preparation of well-constructed pleadings assumes
paramount importance. Through these pleadings, claims, defenses, and counterclaims
are effectively communicated to the court.
OBJECTIVE OF PLEADING
When considering the realm of pleadings, there exist a set of fundamental principles
that govern their construction.
Statement of Facts:
A pleading’s core focus should be to present facts exclusively, refraining from the
inclusion of legal arguments. It ought to offer a succinct and lucid narration of pertinent
events and circumstances.
Incorporation of Material Facts:
Pleadings must encompass all pivotal facts, eschewing extraneous details.
Priority should be placed on delineating facts that hold significance to the case and
have direct pertinence to the prevailing issues.
Factual Foundation, Not Evidence:
Pleadings should articulate the foundational facts upon which a party bases its
claims, abstaining from delving into the particular evidence intended for substantiating
those facts. The emphasis lies in unveiling the crux of the pertinent facts themselves,
rather than the modalities of their validation.
Conciseness, Precision, and Certainty:
Pleadings should adeptly encapsulate material facts with brevity, preserving
precision and certainty. This demands meticulous drafting to ensure that the
fundamental elements of the case are clearly and unequivocally expounded.
By adhering to these fundamental tenets of pleadings, the result is enhanced
clarity, efficiency, and equity in legal proceedings. The focal point on facts while
eliminating superfluous information and furnishing a lucid and succinct portrayal of
pertinent occurrences through pleadings facilitates comprehension for both parties and
the court, thus promoting a more streamlined and efficacious resolution of legal
disputes. The ensuing elaboration explicates the Principles of Pleading in a more
comprehensive manner:
Distinction Between Facts and Law:
In situations of ambiguity, the plaintiff retains the option to invoke the plea of
‘inuendo,’ elucidating how the remark was commonly interpreted by individuals familiar
with the plaintiff. Through offering a comprehensive exposition of the facts, the plaintiff
bolsters their case, permitting a coherent and rational inference to be drawn.
Hence, the inclusion of specific facts within pleadings is pivotal in erecting a
robust foundation for the claims and defenses presented within a legal case. These
facts substantiate the arguments posited by the litigants and facilitate the court’s grasp
of the case’s context and merits.
Illustrative Instances of Inadequate Pleading:
In matters concerning matrimony, certain traditions are acknowledged, such as
unions involving individuals within proscribed degrees of consanguinity or specific
castes. Validating such marriages necessitates the demonstration of an existing custom
within the community that sanctions such unions. In matters of trade and commerce,
various customs govern business relations between parties, and these customs should
be pled alongside pertinent facts.
However, it is pertinent to acknowledge that if a custom has repeatedly come
under the purview of the courts and has acquired legal recognition, there exists no
compulsion to explicitly plead it, as the courts will take judicial cognizance of such well-
entrenched customs.
The rule also permits the incorporation of legal pleas that repudiate the legal
entitlements asserted by the opposing party. For instance, the defendant may assert the
defense of ‘res judicata’ or invoke the defense of limitation. In a scenario where a
landlord initiates a suit against a tenant as a trespasser, the defendant may raise the
legal plea of ‘estoppel’ under Section 116 of the Evidence Act. Such legal pleas can,
and should, be advanced by either party at the outset of the case, as the failure to do so
precludes the defaulting party from proffering evidence to substantiate them.
Fundamental Principles of Pleadings
In the context of pleadings, several cardinal principles govern their composition:
Statement of Facts:
A pleading should center exclusively on the presentation of facts, refraining from
the inclusion of legal arguments. Its focus lies in providing a succinct and lucid account
of the pertinent incidents and situations.
Inclusion of Material Facts:
Pleadings are required to encompass all critical material facts while eschewing
superfluous details. The emphasis should be placed on presenting facts that are pivotal
to the case and intimately connected to the pertinent issues.
Factual Basis, Not Evidence:
Pleadings must elucidate the factual underpinnings upon which a party relies,
abstaining from delving into the specific evidence earmarked for substantiating those
facts. The emphasis is on articulating the essential facts themselves, rather than the
methods for their validation.
Concise, Precise and Certain:
Pleadings should effectively communicate material facts in a succinct manner,
upholding precision and assurance. Attaining this demands meticulous drafting to
ensure that the vital constituents of the case are outlined distinctly and unambiguously.
Observing these cardinal tenets of pleadings enhances lucidity, efficacy, and
impartiality in the domain of legal proceedings. By concentrating on facts and
eliminating extraneous elements, while concurrently offering a succinct and explicit
account of the pertinent occurrences, pleadings empower both parties and the court to
apprehend the core elements of the case. This catalyzes a more streamlined and
proficient resolution of conflicts within the legal framework. The Principles of Pleading
are further elaborated below:
#1. Facts, Not Law:
In scenarios marked by ambiguity, the plaintiff may invoke the plea of “inuendo”
to elucidate how a particular remark was generally understood by individuals acquainted
with the plaintiff. By furnishing a comprehensive rendition of the facts, the plaintiff
fortifies their case and paves the way for a logical and organic conclusion.
In this light, the inclusion of specific facts within the ambit of pleadings assumes
paramount importance, serving as a robust foundation for the claims and defenses
expounded within a legal case. These factual underpinnings bolster the arguments
espoused by the parties and aid the court in grasping the backdrop and merits of the
case
Examples of Deficient Pleading:
In the context of matrimonial affairs, specific traditions have gained
acknowledgment, such as unions between individuals falling within the restricted
degrees of kinship or affiliated with specific castes. To validate such marital unions, it
becomes imperative for a party to establish the existence of a prevailing communal
custom that sanctions such alliances. Likewise, in commercial interactions, a spectrum
of customs governs business relationships between parties, necessitating the
incorporation of these customs in conjunction with pertinent factual information.
Nonetheless, it is noteworthy that if a custom has undergone repeated exposure
within the purview of the courts and has assumed the status of legal precedent, explicit
pleading thereof may not be requisite. In such instances, the courts, recognizing the
firmly entrenched nature of the custom, will judicially acknowledge its existence without
necessitating formal plea.
Furthermore, the rule accommodates the inclusion of legal pleas designed to
contest the legal entitlements asserted by the opposing party. For instance, the
defendant retains the prerogative to invoke the defense of res judicata or invoke the
defense of limitation. In circumstances where a landlord initiates legal action against a
tenant on the grounds of trespass, the defendant can interpose the legal plea of
estoppel pursuant to Section 116 of the Evidence Act. Such legal pleas assume
significance and merit presentation by either party at the case’s inception. The rationale
behind this is that the failure to introduce these pleas at the outset could potentially
preclude the defaulting party from proffering substantiating evidence later in the
proceedings.
#2. Material Facts:
When a litigant seeks the guidance of legal counsel, they provide a
comprehensive account of the facts and circumstances related to their case. This often
entails recounting a multitude of events, even those that may only possess remote
relevance. However, not all of these details warrant inclusion in the formal pleading.
Should every minute facet find its way into the complaint, the resulting document could
become unduly protracted, potentially diverting the judge’s focus from pivotal elements
while inundating them with extraneous data.
As such, the core focus remains on material facts—those integral to the case’s
immediate essence. On the contrary, secondary or ancillary facts can be prudently
omitted. Herein lies the responsibility of the legal practitioner, who must meticulously
scrutinize each fact, gauging its pertinence and applicability to the particular case. The
adept attorney ensures that these facts are meticulously arranged and prioritized prior
to their presentation in the form of a complaint.
Hence, the second cardinal principle of pleading stipulates that every pleading
must exclusively encapsulate a presentation of the material facts upon which the party
predicates their claim or defense. This tenet, articulated in Order VI, Rule 2, embodies
two significant facets:
1. The party making the plea is obliged to incorporate all material facts
forming the foundation of their claim or defense.
2. The party must confine their pleadings solely to material facts, refraining
from introducing immaterial facts and abstaining from pleading evidence.
In adhering to this edict, the pleading assumes a focused and succinct character,
proffering only those salient facts requisite for bolstering the party’s claim or defense.
This approach avoids unnecessary elaboration and the introduction of evidentiary
matters, thereby upholding the principle with unwavering commitment. Unquestionably,
this rule bears a stringent disposition. A natural question arises: What criteria define
material facts? Fundamentally, any fact upon which a cause of action or defense pivots
qualifies as material. The rule operates as a deterrent against the inclination of litigants
to include superfluous and unrelated minutiae within the record. It curtails the impulse to
recount every fleeting detail without regard for relevance. The rule enforces a process of
discernment on the litigant’s part, necessitating the selection and presentation of solely
essential facts.
Material facts encompass the complete spectrum of facts essential for
substantiation during trial to validate the presence of a cause of action or defense.
Moreover, certain other facts, while not directly foundational to the cause of action or
defense, wield significance in bestowing upon the pleading party the inherent
prerogative to substantiate them during the trial. The classification of a fact as material
or immaterial hinges upon the contextual dynamics of the case.
The task of gauging a fact’s materiality may not invariably reveal itself at the
initial phase of the case, as the significance of certain facts might progressively manifest
during the trial proceedings. In scenarios where a party entertains uncertainty regarding
a specific fact’s materiality or holds reasonable reservations, inclusion rather than
exclusion is advised. This approach is rooted in the rationale that failure to articulate or
plead a material fact impedes the presentation of evidence to substantiate said fact
during the trial—unless an amendment is sought in compliance with Order VI Rule 17.
The prevailing norm dictates that a party cannot substantiate a fact not explicitly
pleaded.
Consequently, the role of a legal practitioner is arduous. They are tasked with
upholding the rule of pleading only material facts while simultaneously guarding against
the inadvertent omission of seemingly inconsequential facts that may subsequently
emerge as material during trial. The proficient attorney must account for all potential
trajectories that the pleadings might traverse. By orchestrating and interlinking the facts
presented by their client with careful precision and scrutinizing the interplay between
these facts, they ascertain which ones are indispensable for substantiating the cause of
action or defense. This process is underpinned by formulating a preliminary mental
outline of the pleading, followed by a rigorous analysis of all presented facts.
This analysis endeavors to establish whether the substantiation of all material
facts would culminate in success. Through methodical elimination, the attorney
assesses whether omitting seemingly immaterial facts from the outline would still yield
favorable outcomes. If the answer is affirmative, the irrelevant facts are discarded.
Conversely, if the answer is negative, their inclusion is warranted. An alternative litmus
test for assessing fact materiality involves evaluating whether proving a specific fact
would undeniably establish the cause of action or defense.
The fundamental objective is to sidestep including any fact in the pleading that
would fail to enhance the party’s position, even if proven. Why expend resources—time,
energy, and funds—validating a fact that contributes nothing substantial to the party’s
case? Lengthy discussions on trivial matters frequently elongate litigation duration,
contributing to the already extended legal proceedings. In India, courts grapple with a
diverse range of litigation, while attorneys contend with a plethora of cases, which often
leaves them inundated. Legal practitioners, hampered by time constraints, might find it
challenging to meticulously evaluate the materiality of the facts laid out by their clients.
The result is often unwieldy and protracted pleadings, rendering the framing of
issues a cumbersome endeavor. Despite the litigants’ yearning for expeditious
resolution, the litigation continues to be protracted. Legal professionals bear the
responsibility of ensuring that pleadings hew closely to the regulations stipulated in the
code of civil procedure. Their discretion should supersede acquiescence to the
idiosyncrasies of their clients. By adopting such a stance, the litigation process can be
streamlined and rendered more efficient.
Examples of Material Facts:
When embarking on a petition for judicial divorce founded on the grounds of
desertion, the presence of material facts holds utmost significance. Specifically, the
departure of the respondent from the petitioner without due consent or a valid excuse is
of central import. Furthermore, other facts interlinked with the respondent’s intent to
desert, such as explicit declarations made to acquaintances or family members
expressing an inclination to permanently sever ties, are also of considerable import.
In cases where legal action seeks the eviction of a trespasser from a tract of land
along with the attainment of an injunction, it becomes pivotal to assert the defendant’s
“threats and intentions to perpetuate the unlawful act.” Equally, if a party solicits a stay
order to prevent the demolition of their property, shop, or edifice by any authoritative
body, it becomes imperative to aver their lawful ownership of the asset and the proper
authorization of architectural plans or maps by the relevant entity. In instances involving
government-owned property, the party’s claim hinges on asserting undisrupted
possession of the land for over a twelve-year span. The inclusion of these facts is
indispensable, as their substantiation can lay the foundation for the cause of action.
Within the context of a defamation lawsuit, meticulous articulation assumes
paramount significance. It becomes pivotal to assert that the spoken or written words
were crafted with the intention to malign the plaintiff or were, at the very least,
apprehended by the general populace as defamatory. In situations where the words
exhibit ambiguity, the necessity arises to invoke an “innuendo” that unveils their ironic
usage or intended defamatory connotation.
These material facts undertake a pivotal role in buttressing the respective claims
or defenses propounded during the legal proceedings. If a party seeks to leverage a
specialized rule or custom, it becomes obligatory to incorporate all pertinent facts that
fall within the purview of such a framework. For instance, in property-related contentions
where the legitimacy of a marriage involving individuals within prohibited relational
degrees is contested, the party impugning the marriage’s validity must assert the
nonexistence of any custom permitting or endorsing such unions. Furthermore, the
presence of a longstanding familial or caste-specific custom authorizing such marriages
must be explicitly stated.
Similarly, in a suit entailing monetary claims, the assertion of partial loan
repayment and other facts capable of extending the limitation period by a triennial span
is of paramount importance to avert the suit’s imposition of limitation-based dismissal.
In cases where a plaintiff relies on a document as evidentiary support for their
claim, it is indispensable to clarify the legal implications of the document in question. For
instance, in scenarios hinging on a sale deed, it becomes essential to declare that a
specific individual executed the property transfer to the plaintiff via a sale deed on a
particular date, a document duly authenticated by registration.
Finally, in a suit pursuing specific performance of a contract, it becomes material
to affirm that the plaintiff has consistently displayed a willingness to fulfill their
contractual obligations. This affirmation effectively underscores the plaintiff’s
unwavering commitment and readiness to fulfill their end of the agreement.
2. Property Documentation:
It is essential to gather all relevant documents related to the property, such as the title
deed, previous sale deeds, encumbrance certificate, tax receipts, approved building
plan, and possession certificate. These documents help establish the ownership and
legal status of the property. It is crucial to verify the authenticity and correctness of
these documents to avoid any legal complications.
3. Due Diligence:
Conducting thorough due diligence is crucial to ensure that the property is free from any
legal disputes, liens, or encumbrances. This includes verifying the seller’s title, checking
for pending litigation or claims on the property, and confirming that all necessary
approvals and permissions have been obtained. Due diligence helps mitigate risks and
ensures a smooth transfer of ownership.
4. Stamp Duty and Registration:
Adequate stamp duty must be paid on the Sale Deed as per the applicable state
laws. The stamp duty is calculated based on the property’s value or the sale
consideration mentioned in the deed. After paying the stamp duty, the Sale Deed needs
to be registered with the appropriate government authority within the prescribed time
frame. Registration provides legal validity and protects the buyer’s interests.
5. Witness and Notarization:
The Sale Deed should be witnessed by at least two witnesses who are not
related to either the buyer or the seller. Their signatures and addresses should be
mentioned in the document. Additionally, it is advisable to notarize the Sale Deed to add
an extra layer of authenticity and evidentiary value.
6. Drafting the Sale Deed:
The Sale Deed should be drafted carefully, ensuring that all the necessary
clauses and provisions are included. The document should clearly identify the buyer
and the seller, describe the property in detail, specify the sale consideration, outline the
rights and responsibilities of both parties, and include any additional clauses agreed
upon. It is recommended to seek legal assistance or consult a professional while
drafting the Sale Deed to ensure accuracy and compliance with legal requirements.
7. Execution and Exchange:
Once the Sale Deed is prepared, it needs to be executed by both the buyer and
the seller. They must sign the document in the presence of witnesses, and each party
should retain a copy of the executed Sale Deed. The original Sale Deed is typically
handed over to the buyer upon completion of the registration process.
8. Mode of transfer of property:
The Sale Deed serves as a legal instrument for the transfer of ownership rights
from the seller to the buyer. There are different modes of transfer that can be used to
execute a Sale Deed, such as outright sale, exchange, gift, or lease with an option to
purchase. The chosen mode depends on the agreement between the parties and the
specific circumstances surrounding the transaction. Each mode of transfer carries its
own legal implications and requirements, which should be carefully considered and
addressed in the Sale Deed.
In summary, before incorporating a Sale Deed, certain provisions need to be
taken care of, including identifying the parties involved and providing accurate details of
the property being sold. Additionally, understanding the different modes of transfer is
crucial to determine the appropriate method for executing the Sale Deed. By
considering these aspects, a Sale Deed can be effectively prepared to facilitate the
legal transfer of ownership rights between the buyer and the seller.
Contents of Sale Deed:
1. Parties in the sale deed:
The sale deed is a legal document that transfers the ownership of a property
from the seller to the buyer. It is essential for the sale deed to accurately identify and
include the details of the parties involved in the transaction. Here are the key points to
consider regarding the parties in the sale deed:
Names: The sale deed should clearly mention the full names of the buyer and the
seller. It is important to provide accurate and complete names to avoid any confusion or
disputes in the future.
Age: The age of the parties involved should be mentioned in the sale deed. This helps
establish their legal capacity to enter into the transaction. In some jurisdictions, certain
restrictions or requirements may apply based on the age of the parties.
Address: The sale deed should include the current residential addresses of both the
buyer and the seller. This ensures that they can be easily contacted or served with legal
notices if necessary. Providing accurate addresses is crucial for effective
communication and documentation purposes.
Proper Parties: It is important to ensure that the parties mentioned in the sale deed are
the correct individuals or entities who have the legal authority to enter into the
transaction. This means that the buyer and seller should be the rightful owners or
authorized representatives of the property being transferred.
Sales Agreement: The details provided in the sale deed should align with the terms
mentioned in the sales agreement or the agreement to sell. The names, addresses, and
other relevant information of the parties mentioned in the sales agreement should be
consistent with those mentioned in the sale deed.
By including accurate and complete details of the parties in the sale deed, the
document becomes legally valid and establishes a clear transfer of ownership. It helps
avoid any ambiguity or disputes regarding the identification of the parties involved in the
property transaction.
2. Description of the sales property:
A detailed description of the property in the sale deed is one of the essentials.
This description helps in accurately identifying and distinguishing the property that is the
subject of the transaction. Here are the key points to consider regarding the description
of the sales property:
Total plot area: The sale deed should mention the total area of the plot on which the
property is situated. This helps in determining the size and extent of the property being
transferred. The area may be mentioned in square feet, square meters, or any other
relevant unit of measurement.
Identification number: If applicable, the sale deed should include any identification
number or code associated with the property. This can include unique identifiers such
as survey numbers, plot numbers, or parcel numbers that help in precisely identifying
the property.
Exact location: It is crucial to provide the exact location of the property in the sale
deed. This includes details such as the street name building or complex name and any
other specific landmarks or features that help in locating the property accurately.
Flat or unit details: If the property being sold is a flat or an individual unit within a
larger building or complex it is important to mention the specific details of that unit. This
can include the floor number block or wing name and any other relevant information that
distinguishes the unit from others in the building..
Both the buyer and seller will have a clear grasp of the property that is being
transferred if a detailed description of the sales property is included in the sale
paperwork. This description serves as a reference point for future reference and
eliminates any doubt or arguments concerning the identity of the property.
3. Sales agreement:
It is usual practise for the parties concerned to enter into a sales agreement
before drafting a sale document. This agreement acts as a preliminary contract outlining
the sale’s terms and circumstances. The following are the most important aspects to
learn regarding the sales agreement:
Purpose of the agreement: The major purpose of the sale agreement is to establish a
mutual understanding between the buyer and seller regarding the terms of the sale. It
outlines both parties rights and obligations and also serves as a legal contract to
safeguard their interests.
Terms and conditions: The sales agreement encompasses a range of terms and
conditions that supervise the progression of the sale. These terms and conditions
encompass contractual elements like the buying price, payment schedule, expected
completion timeframe, transfer of ownership, and any unique situations that the involved
parties have mutually agreed upon
Advance payment: As part of the sales agreemen the buyer typically pays an advance
amount also known as earnest money to the seller. This payment signifies the buyer’s
dedication to moving forward with the purchase.. The amount is usually a percentage of
the total sale price and is adjusted against the final payment.
Default and remedies: The sales agreement may outline the consequences of default
or breach of the agreed-upon terms by either party. It may specify the remedies
available to the non-defaulting party such as seeking legal action or retaining the
earnest money.
Legal validity: As soon as both parties have signed it, the sales agreement holds the
weight of a legally enforceable document. It establishes the foundation for the
subsequent sale deed and provides legal protection to the buyer and the seller.
The sales agreement serves as an initial stride towards the ultimate sale deed,
guaranteeing that both sides are aligned on the conditions of the sale. It provides clarity
and safeguards the interests of the buyer and seller throughout the transaction process.
It is essential to consult legal professionals and adhere to local laws and regulations
when drafting and executing a sales agreement to ensure its enforceability and validity.
4. Sale consideration:
The sale consideration refers to the amount or price at which the property is
being sold. In the sale deed there is a specific clause that mentions the sale
consideration and it is important to provide the price in both words and numbers. Here
are some details to understand about the sale consideration clause:
Significance of sale consideration: Within the sale deed, the sale consideration plays
a pivotal role since it establishes the financial worth at which the property is handed
over from the seller to the buyer. It signifies the prearranged value for the property.
Mentioning the price in words and numbers: To avoid any ambiguity or confusion it
is customary to mention the sale consideration in both words and numbers. This
ensures clarity and accuracy in identifying the exact value of the transaction. For
example if the sale consideration is Rs. 50,00,000, it should be mentioned as “Fifty
Lakhs Rupees” in words and “Rs. 50,00,000” in numbers.
Currency and mode of payment: The sale consideration clause may also specify the
currency in which the payment will be made. Furthermore it has the potential to provide
more details about the payment approach that both parties have concurred upon. This
could encompass alternatives like physical cash, cheque, electronic bank transfer, or
any other fitting methods of payment.
Implications for stamp duty and registration fees: The sale consideration has a
direct impact on the stamp duty and registration fees payable for the sale deed. In many
jurisdictions these fees are calculated based on a percentage of the sale consideration.
Therefore accurately mentioning the sale consideration is essential for determining the
applicable fees and ensuring compliance with legal requirements.
Accuracy and legal implications: It is crucial to accurately state the sale consideration
in the sale deed as any discrepancies or misrepresentation of the price can lead to legal
complications in the future. Both the purchaser and the seller need to come to a
consensus regarding the sale amount and verify that it’s accurately mirrored in the
deed.
The sale consideration clause in the sale deed plays a significant role in
documenting the agreed-upon price for the property and establishing the financial
aspect of the transaction. It is essential to provide the price in both words and numbers
to maintain transparency and avoid any misunderstandings regarding the monetary
value of the sale.
5. Payment method:
In the sale deed, the parties involved mutually agree on the payment method to
be used for completing the transaction. Here are some details to understand about the
payment method clause in a sale deed:
Agreement on payment method: The buyer and seller engage in a conversation to
settle on the preferred method of payment for the fund transfer Common methods
include cash, net banking, demand draft, cheque, or any other mode of payment
acceptable to both parties.
Clarity on the chosen method: The sale deed should clearly mention the specific
payment method agreed upon by the parties. This measure guarantees absolute clarity
and eliminates any potential uncertainties concerning the manner in which the payment
will be executed.
Amount and installment details: The sale deed could additionally incorporate
particulars concerning the overall sum to be remitted and whether it will be disbursed in
a solitary installment or across multiple installments. If there are installment payments,
the sale deed should outline the due dates or intervals for each payment.
Compliance with legal requirements: It is important to ensure that the chosen
payment method complies with the legal and regulatory requirements of the jurisdiction
where the sale is taking place. For example, certain transactions may have limitations
on cash payments or require specific documentation for online transfers.
Recording the payment details: The sale deed should include provisions for recording
the payment details, such as the transaction reference number, cheque numbers, or
any other relevant information that verifies the completion of payment. This
documentation serves as evidence of the financial aspect of the transaction.
Acknowledgment of receipt: Following the completion of payment, it is a customary
practice for the seller to furnish the buyer with an acknowledgment of the received
amount. This confirmation might take the form of an independent document or a section
within the sale deed, validating the receipt of payment as per the established terms.
The payment method clause in a sale deed ensures that both parties are in
agreement on how the funds will be transferred. By clearly specifying the chosen
method and any associated details, such as the payment amount and installment
schedule, the sale deed establishes a framework for a smooth and transparent financial
transaction.
6. Advance payment:
In the course of purchasing a flat or property, it’s a regular practice for the buyer
to extend an upfront payment to the seller. Termed as an advance payment or
sometimes referred to as a token sum, this upfront payment signifies the buyer’s intent
to carry forward with the transaction. Here are some important details to understand
about the advance payment clause in a sale deed:
Purpose of advance payment: The buyer provides an advance payment to secure
their intention to purchase the property. By making this payment, the buyer expresses
their seriousness and commitment towards the deal. The seller, on the other hand, is
assured of the buyer’s intent to proceed with the purchase.
Amount and receipt: The sale deed must clearly mention the specific amount that has
been paid as an advance by the buyer. It is important to record this amount accurately.
Additionally, the seller is responsible for providing a receipt or acknowledgment of
receiving the advance payment. This receipt serves as evidence of the payment made.
Payment in instalments: In certain instances, the buyer might encounter challenges in
settling the complete upfront sum in a singular instance. Consequently, the sale
agreement can encompass clauses allowing the buyer to remit the upfront amount
through a series of instalments. The specifics of these installment-based payments,
encompassing any applicable interest, ought to be mutually settled and distinctly
articulated within the sale agreement.
Agreement on the installment payment clause: It is imperative for both the purchaser
and the vendor to align on the stipulations outlined within the installment payment
provision. This encompasses defining the sum, frequency, and deadlines for the
installment disbursements These details should be specified in the sale deed to avoid
any confusion or disputes in the future.
Legal and financial implications: It is important to ensure that the advance payment
and any installment payments comply with legal and financial regulations. The sale
deed should reflect the agreed-upon terms and comply with any applicable laws
governing advance payments and installment schemes.
The inclusion of an advance payment clause in the sale deed provides security
and clarity for both parties involved in the transaction. It formalizes the buyer’s
commitment to purchase the property and ensures that the seller acknowledges and
records the payment made. By outlining the terms and conditions of the advance
payment, including any installment payment arrangements, the sale deed establishes a
legally binding agreement that protects the interests of both the buyer and the seller.
7. Transfer of title clause:
The clause pertaining to the transfer of title within a sale deed establishes the
seller’s firm intention to pass the property’s ownership rights to the buyer. This holds
immense significance, ensuring a transparent and lawful transition of property
ownership. Here are several key points to grasp about the transfer of title clause:
Intent to transfer ownership: This clause unambiguously declares the seller’s intent to
vend the property to the buyer. It affirms the seller’s dedication to relinquishing all
property rights, interests, and ownership to the buyer.
Legal transfer of ownership: The transfer of title clause guarantees the lawful
transference of property ownership from the seller to the buyer. This encompasses all
rights, privileges, and obligations associated with the property.
Documentation and formalities: To finalize the ownership transfer, certain legal
requirements and paperwork might be necessary. These could involve executing the
sale deed, officially registering the property, and settling applicable taxes and fees. The
transfer of title clause acknowledges and incorporates these essential measures to
assure a valid and lawful ownership transfer.
Rights and obligations: Upon the completion of title transfer, all rights and duties
linked to the property migrate from the seller to the buyer. This covers the right to
possess, utilize, and relish the property, along with the duty to uphold and manage it.
Clear identification of the property: The sale deed should distinctly identify the
property undergoing transfer. It should encompass particulars like the address,
boundaries, dimensions, and any pertinent data that uniquely characterize the property.
Legal implications: The transfer of title clause holds legal weight by officially
establishing the shift of ownership in a legally binding manner. It safeguards both the
buyer and seller by guaranteeing that the ownership change is duly documented and
endorsed by law.
The transfer of title clause holds essential status within a sale deed, validating
the seller’s commitment to sell and transmits property ownership rights to the buyer. It
forges the legal framework for ownership transference, ensuring a seamless and
legitimate transaction. By incorporating this clause into the sale deed, both parties can
confidently rely on the legal legitimacy of the property transfer, along with the
accompanying rights and responsibilities
8. Delivery of the deed:
The delivery of the sale deed marks a pivotal juncture in the property transfer
procedure. It encompasses physically presenting the original sale deed document from
the seller to the buyer. Here are some essential points to comprehend concerning the
delivery of the deed:
Handing over the sale deed: Once the sale deed has been meticulously prepared and
executed, it becomes imperative for the seller to tangibly hand over the authentic sale
deed to the buyer. This action commonly coincides with the property’s possession
handover.
Possession of property: Frequently, the delivery of the deed aligns with the moment
of property possession. This dual transaction ensures that the buyer not only gains
physical possession of the property but also obtains the essential legal documentation,
inclusive of the sale deed.
Importance of the sales agreement: In conjunction with the sale deed, the sales
agreement stands as another pivotal record that necessitates delivery to the buyer.
Within the sales agreement, the terms and conditions that were mutually agreed upon
by both parties prior to executing the sale deed are documented. This agreement acts
as a point of reference for the buyer, outlining their entitlements and responsibilities.
Legal validity: The delivery of the sale deed carries weight due to its role in solidifying
the shift of ownership rights from the seller to the buyer. It stands as tangible evidence
of the concluded property transaction, offering substantiation of the buyer’s rightful
ownership.
Documentation for future reference: Following the delivery of the sale deed to the
buyer, it takes on a pivotal role as a document of future reference. It warrants careful
safekeeping by the buyer, as its utility may span various purposes, including securing
loans, validating ownership, or navigating any legal matters linked to the property.
Transfer of responsibility: With the delivery of the sale deed, the buyer takes on the
mantle of property responsibility. This encompasses property maintenance, tax
payments, and adherence to all legal commitments associated with the property.
The delivery of the sale deed holds substantial significance within the property
transfer journey. It guarantees the buyer’s receipt of essential legal documentation,
along with assuming ownership of the property. Through the delivery of both the sale
deed and the sales agreement, the seller fulfills their obligation to furnish the buyer with
the requisite documents pertaining to their ownership rights.
9. Indemnity clause:
Incorporating an indemnity clause into a sale deed holds paramount importance
as it acts as a shield safeguarding the buyer against potential liabilities or
encumbrances linked to the property. Here are key particulars regarding the indemnity
clause
Clearing of charges: The indemnity clause underscores that the property on sale must
be devoid of any unresolved obligations or liabilities, encompassing pending utility bills,
maintenance fees, and similar. This ensures that the buyer is shielded from inheriting
financial responsibilities predating the ownership transfer.
Buyer’s rights: If any undisclosed charges or dues surface post-sale, the buyer
possesses the right to seek indemnification from the seller. In essence, the seller is
bound to reimburse the buyer for expenses incurred in addressing the outstanding
dues.
Scope of indemnity: The indemnity clause extends its coverage beyond explicitly listed
charges in the sale deed, encompassing any unanticipated expenses linked to the
property. This provision offers the buyer legal safeguarding and financial compensation
should unexpected liabilities arise.
Buyer’s claim process: In case the buyer unearths any charges or dues subsequent to
the sale, they must formally notify the seller in writing within a stipulated timeframe, as
stipulated within the sale deed. Furnishing evidence of the charges and related
expenses incurred is crucial.
Seller’s responsibility: Upon receipt of a legitimate claim under the indemnity clause,
the seller is held accountable for reimbursing the buyer for the specified charges. The
seller may need to directly compensate the buyer or settle the dues on the buyer’s
behalf.
Time limitation: The indemnity clause might impose a specific time constraint within
which the buyer can submit a claim for indemnification. Adhering to the designated
timeline is essential to ensure the validity of the claim.
Documentary Corroboration: To effectively invoke the indemnity clause,
meticulous documentation of all charges, payments, and correspondence between the
buyer and seller is pivotal. This includes retaining receipts, invoices, and written
exchanges related to the pertinent charges.
Inclusion of the indemnity clause within the sale deed champions the buyer’s
interests, affirming the property’s freedom from lingering charges or liabilities. It
institutes a mechanism enabling the buyer to solicit compensation from the seller for
substantiated claims stemming from such obligations. Ultimately, the indemnity clause
fosters fiscal security and nurtures a transparent and equitable transaction environment
for all parties involved
10. Liability in the case of default:
In a sale deed, it is imperative to address the potential occurrence of default by
either party engaged in the transaction. Here’s an in-depth look at the considerations
surrounding liability in the context of default:
Default scenario:: The sale deed ought to delineate the scenarios that qualify as
defaults by either the buyer or the seller. This could encompass scenarios like untimely
payment, failure to meet specific obligations, or any breaches of the stipulated terms
and conditions within the sale agreement.
Penalty clause: To safeguard the rights of the non-defaulting party, the sale deed
might incorporate a penalty clause. This clause spells out the penalty or compensation
that the party in default must render to the aggrieved party as a consequence of their
default. The penalty not only discourages defaults but also guarantees compensation to
the non-defaulting party for any incurred losses.
Determination of fault: In the event of a default, clearly ascertaining which party is at
fault becomes pivotal. Such determination can be anchored in the sale deed’s terms
and conditions, the obligations vested in each party, and any tangible evidence or
documentation substantiating the default.
Resolution process: The sale deed should establish the procedure for addressing
defaults and implementing the penalty clause. This may involve issuing formal notice to
the party in default, allowing a chance to rectify the default, and specifying a timeframe
for corrective action. Should the default remain unaddressed within the stipulated
period, the penalty becomes payable by the party in default.
Protection for the innocent party: The inclusion of a liability clause within the sale
deed is primarily aimed at safeguarding the interests of the non-defaulting party. It
ensures that if one party falls short of fulfilling their commitments, the other party is
compensated for any incurred losses and is not unfairly burdened by the default.
Mediation or legal action: If negotiations or discussions fail to resolve the default, the
sale deed may propose alternative mechanisms for dispute resolution, such as
mediation or arbitration. In cases where these avenues prove ineffective, the aggrieved
party could choose to initiate legal proceedings to enforce the terms of the sale deed
and claim the stipulated penalty fee.
Incorporating a liability clause within the sale deed cultivates accountability and
motivates both parties to meet their responsibilities promptly. It offers a structured
approach for addressing defaults, while simultaneously assuring protection and
compensation to the non-defaulting party in instances of breach..
11. Registration and witnesses:
The process of registering a sale deed is a pivotal measure to bestow it with legal
legitimacy and enforceability. Here’s a closer examination of the registration process
and the role of witnesses within a sale deed:
Execution of the sale deed: After the meticulous preparation and finalization of the
sale deed, the participation of both the buyer and the seller is requisite for its execution.
Their respective signatures stand as a testament to their concurrence with the terms
and stipulations outlined in the deed,
Witnesses’ Role: Beyond the endorsements of the buyer and seller, the sale deed
necessitates the presence of two witnesses during execution. These individuals serve
as impartial third parties who can affirm that the involved parties willingly entered into
the agreement and appended their signatures. The witnesses’ names and addresses
are duly recorded within the sale deed.
Registration Act 1908: The registration of the sale deed adheres to the guidelines
stipulated by the Registration Act of 1908. This Act furnishes the legal framework for the
registration of assorted documents, encompassing sale deeds. It sets forth the
prerequisites, procedures, and timelines governing registration.
Timeframe for registration: A specific timeframe must be adhered to for the
registration of the sale deed to validate its legality. As per legal mandates, the sale deed
should be registered within four months from its execution date. Failure to meet this
registration deadline may lead to legal complexities and could impact the deed’s validity.
Registration process: The sale deed registration necessitates the submission of the
document to the relevant Sub-Registrar’s Office, alongside the requisite registration
fees. Following this, the deed is officially documented in government records, and a
unique registration number is allocated. This registration procedure ensures that the
sale deed becomes an integral part of public records, serving as irrefutable legal proof
of ownership transfer.
Importance of registration: The registration of the sale deed delivers manifold
benefits, including legal credibility, safeguarding of rights, and prevention of fraudulent
activities. It cements the transaction’s authenticity and integrity and endows the deed
with admissibility as evidence in legal proceedings. Furthermore, registration aids in
averting disputes and lays the foundation for a lucid ownership lineage.
Certified copy: Upon the successful registration of the sale deed, the buyer is entitled
to acquire a certified copy of the registered document from the Sub-Registrar’s Office.
This certified copy stands as substantiation of ownership and proves invaluable for
diverse applications, spanning loan acquisitions, utility transfers, and resolution of
property-associated legal matters.
Incorporating witnesses and undertaking the registration process bolsters the
legality and authenticity of a sale deed. It extends legal protection to both parties,
affirming a sound transfer of ownership that is firmly grounded in legality.
12. Right to quiet enjoyment of property clause:
The presence of the ‘right to peaceful property enjoyment’ clause within a sale
deed secures the buyer’s untroubled and undisturbed possession and utilization of the
property, shielding them from any interference by the seller or external parties. Here’s
an exploration of key aspects related to this clause:
Protection of buyer’s possession: This clause unequivocally ensures that once the
property changes hands and the buyer assumes possession, they possess the
unequivocal right to utilize and relish the property without any obstructions or
disturbances. It effectively bars the seller from intruding upon the buyer’s possession or
initiating any disruptions that may impede the serene enjoyment of the property.
Absence of vendor interference: After the transfer of property to the buyer, the seller
is stripped of any rights or actions that might impede the buyer’s possession and
gratification. This prohibition encompasses activities such as trespassing, making
attempts to reclaim possession, or asserting any claims that could infringe upon the
buyer’s peaceful possession.
Protection from third-party claims: The right to quiet enjoyment equally extends to
offering protection against any claims or actions originating from third parties that might
disturb the buyer’s possession. This assurance safeguards the buyer from legal
disputes, encumbrances, or assertions initiated by parties other than the seller. The
buyer can enjoy the property without apprehensions of displacement or interference due
to such claims.
Legal remedies: Should the buyer’s right to tranquil property enjoyment be violated by
the seller or a third party, the buyer retains the capacity to pursue legal remedies. This
could involve initiating legal proceedings, seeking an injunction, or claiming
compensation for any losses incurred due to the interference. The specific remedies
attainable could be contingent on the governing laws and jurisdiction.
Importance for buyer’s peace of mind: The inclusion of the right to quiet enjoyment
clause in the sale deed extends a sense of security and tranquility to the buyer. It
guarantees them exclusive possession rights, assuring them of unencumbered
utilization and enjoyment of their acquired property, untroubled by any hindrances or
legal complexities originating from the seller or other entities.
The right to enjoy property in tranquility is a foundational facet of property ownership. It
enforces the buyer’s capacity to serenely cherish the property they’ve acquired,
shielding their possession, safeguarding them from disruption or claims, and affording
them complete liberty to relish and make use of their property entitlements without any
disruptions.
Presence of parties and witnesses: A sine qua non for the registration process entails
the physical presence of both the buyer and the seller, accompanied by two witnesses,
at the hallowed precincts of the sub registrar’s office. This hallowed ritual ascertains the
authenticity and legality of the entire transaction.
Relevant documents: The imperative accoutrements—ranging from the original sale
deed, substantiating the identities and addresses of the stakeholders, property
documents, to the NOC (No Objection Certificate) if relevant—ought to accompany the
coterie to the registrar’s office for meticulous scrutiny.
Signing the sale deed: In the august presence of the witnesses, the buyer and the
seller affix their signatures to the sale deed. Within its parchment resides an exhaustive
compendium encompassing property minutiae, the cast of characters, contractual
tenets, sale consideration, and sundry pivotal particulars.
Registration process: Following the endorsement by the stakeholder signatories, the
sale deed marches forth to the hallowed register, invoking the provisions housed within
the venerable edifice of the Registration Act, 1908. Here, the registrar assumes the
mantle of the vigilant guardian, scrutinizing the corpus of documents, ensuring
seamless alignment with the juridical stipulations, and subsequently enshrining the sale
deed within the annals of official records.
Certified copy: Subsequent to this triumphant inscription, the buyer is duly empowered
to procure a certified copy of the meticulously registered sale deed from the hallowed
precincts of the registrar’s office. This authenticated copy stands as a tangible beacon
of ownership, adroitly serving diverse purposes such as wielding clout in loan
acquisition or substantiating assertions during legal altercations.
Submission of original documents: An admonition vital is that the original pantheon
of property documents—encompassing the sacred sale deed—be tendered unto the
registry of the registrar within the four-month stipulated interregnum post the registration
date. This mandate ensures the consummate fruition of the entire transaction.
Payment of charges: The buyer is responsible for paying the stamp duty and
registration charges associated with the sale deed. These charges vary from state to
state and are based on the property value. The seller, on the other hand, needs to clear
any outstanding payments related to the property, such as property tax, cess, and water
and electricity charges, before the sale deed is signed.
Registering a sale deed provides legal validity to the transaction and safeguards
the interests of the buyer. It establishes the buyer’s ownership rights and protects
against any future disputes. It is essential to comply with the rules and regulations of the
Registration Act and consult the specific procedures of the concerned registrar’s office
for a smooth and lawful registration process.
Agreement for sale
An agreement for sale stands as a legal instrument delineating the contours of a
forthcoming property transaction. Serving as a prelude to the actual sale deed, this
agreement illuminates the compact between the prospective buyer and seller. Here, an
intricate elaboration of the agreement for sale unfolds:
Future sale: The agreement for sale germinates with the intent of facilitating a future
property sale. Its essence lies in delineating the framework that will underpin the
impending transaction, orchestrating the sale’s realization as per the agreement’s
terms.
Terms and conditions: This agreement meticulously spells out the tenets governing
the property’s transference. These encompass critical aspects such as the sale price,
payment schedule, mode of payment, possession date, and other salient conditions
embraced by the stakeholders.
No transfer of ownership: It is imperative to grasp that an agreement for sale does not
itself culminate in the transference of ownership or the establishment of any lien on the
property. It functions as a precursor, shaping the terms underpinning the impending
ownership shift.
Protection of interests: The agreement for sale dons the mantle of legal protection for
both buyer and seller alike. It serves as a bulwark against potential disputes or
misunderstandings that could mar the sale’s progression, ensuring the fidelity of the
agreed-upon terms.
Preparing for the sale deed: This preliminary agreement serves as the blueprint that
informs the ensuing creation of the sale deed—a legal instrument effectuating the
ownership transference. The agreed terms crystallized in the agreement gracefully
segue into the sale deed, ensuring a seamless continuity from agreement to actual sale.
It merits emphasis that the legal requisites and dynamics pertaining to an
agreement for sale may diverge from jurisdiction to jurisdiction. The wisdom of seeking
counsel from legal experts or those well-versed in real estate jurisprudence is
incumbent, ensuring scrupulous adherence to the laws and regulations that govern this
sphere.
In a nutshell, an agreement for sale unfurls as a pivotal juncture in the property
acquisition or disposition journey. This document foments mutual understanding and
forges the bedrock for an impending property transaction.
Section 54 of the Transfer of Property Act elucidates that an agreement for sale,
whether executed with or without possession, does not metamorphose into a
conveyance. It thus falls short of transferring the ownership of an immovable property.
Here, the tenets of this provision are expounded:
Requirement of a registered instrument: Section 54 unequivocally mandates that
the sale of immovable property exclusively transpires through a registered instrument—
a saliently recognized sale deed. This instrument, duly sanctioned by legal validation,
serves as the harbinger for the transfer of property ownership from seller to buyer.
Agreement for sale does not create interest or charge: Conversely, an agreement
for sale does not bear the capacity to kindle any interest, lien, or right upon the property
in question. It essentially culminates as a contractual understanding etched between the
buyer and the seller, charting the course for a future property transfer..
Distinction between agreement for sale and sale deed: The crux of distinction
between an agreement for sale and a sale deed resides in their legal connotations. The
former carves the path for a future transfer, while the latter consummates the actual
shift of ownership.
Importance of a registered sale deed: For the seamless transference of property
ownership, the sine qua non is the presence of a duly stamped and registered sale
deed—endowed with legal sanctity. This sacred document begets the evidence of
ownership shift and ushers legal authentication to the transaction.
Registration requirement: The essence of registration reverberates with paramount
importance, buttressing the document’s authenticity and enforcement. Registration is
the process of recording the sale deed with a designated government entity—typically
the sub-registrar’s office. This regimen secures a public record of the transaction while
affording protection to both stakeholder interests.
Compliance with stamp duty laws: Additionally, the sale deed’s legitimacy hinges
upon compliance with the extant stamp duty laws of the relevant state. Stamp duty
constitutes a levy upon property transfer, commensurate with the property’s value.
Complying with this duty is pivotal to cementing the sale deed’s legal efficacy.
In summation, an agreement for sale is bereft of the capacity to enact
conveyance. It remains a prologue to the future transference of property ownership. The
substantive transference necessitates the heralding of a registered sale deed, a legally
endorsed document that stands in harmony with the mandates of stamping and
registration stipulated by the law..
MORTGAGE DEED
A mortgage deed stands as a legal instrument that formalizes a lender’s vested
interest in a property when a borrower secures a loan with the said property. It acts as a
safeguard for the lender’s financial stake. Here, a comprehensive exposition of a
mortgage deed takes shape:
Establishing lender’s interest:
When a borrower procures a loan, often to acquire a property, the lender
necessitates a security interest in the property to ensure loan repayment. The mortgage
deed is the official document that establishes this vested interest.
Property as collateral:
By signing the mortgage deed, the borrower agrees that the property being
purchased will serve as collateral for the loan. This means that if the borrower fails to
make the required loan payments according to the agreed-upon terms, the lender has
the right to take ownership of the property.
Foreclosure and possession:
In the event of loan default, the lender has the option to initiate foreclosure
proceedings. Foreclosure is a legal process through which the lender can claim
ownership of the property and sell it to recover the outstanding loan balance. This
process typically involves court proceedings and can result in the borrower losing their
property.
Auctioning the property:
Post successful foreclosure, the lender might choose to auction the property,
thus recouping the outstanding loan sum. The sales proceeds are allocated to settling
the debt, and any surplus may be returned to the borrower if applicable.
Lien on the property:
The mortgage deed empowers the lender to establish a lien on the property,
entailing a legal assertion against the property until the loan is satisfactorily repaid.
Consequently, the borrower cannot divest or transfer property ownership without retiring
the mortgage debt.
Loan repayment:
As the borrower meets periodic loan repayments, the mortgage debt diminishes.
Upon full loan repayment, the lender’s interest in the property is released, rendering the
borrower the sole proprietor devoid of any encumbrances.
In summation, a mortgage deed embodies a legal document that bestows the
lender with a security interest in a property linked to a borrower’s loan acquisition. It
furnishes the lender the ability to foreclose and attain property possession in instances
of loan default. The mortgage deed also enforces a property lien, which curtails the
borrower’s capacity to sell or transfer ownership until the debt is settled. It emerges as a
pivotal document preserving the lender’s prerogatives and ensuring the borrower’s
fulfillment of repayment obligations.
Section 58 of the Transfer of Property Act, 1882, furnishes a definition for
mortgage. As per this section, a mortgage comprises the transfer of a specific interest in
immovable property to secure particular obligations. Below, a comprehensive
elucidation of this definition emerges:
Transfer of interest:
Within a mortgage, the borrower (termed as the mortgagor) conveys a distinct
interest in the immovable property to the lender (referred to as the mortgagee) as
collateral for certain obligations. This interest transfer bequeaths the lender specific
rights concerning the property.
Purpose of securing:
The immovable property’s interest transfer transpires to secure the performance
of specified obligations. These obligations can encompass the reimbursement of
advanced or prospective loans, the repayment of existing or future debts, or the
fulfillment of engagements that may potentially incur pecuniary liabilities (financial
obligations).
Distinction from transfer of ownership:
Significantly, comprehending that the transfer of interest within a mortgage
diverges from the transfer of ownership in a sale (Section 54 of the Transfer of Property
Act) is crucial. While a sale consummates the comprehensive transfer of property
ownership from seller to buyer, a mortgage conveys only a specific interest in the
property, leaving ownership intact with the borrower.
Security for obligations:
The cardinal objective of a mortgage revolves around furnishing security to the
lender to guarantee loan or debt repayment. By effecting an interest transfer in the
property, the borrower confers upon the lender the prerogative to exercise the security
interest in instances of non-compliance.
Rights and remedies of the lender:
Within a mortgage, the lender is vested with specific rights and remedies should
the borrower default. These may encompass the entitlement to initiate foreclosure
proceedings, vend the property, or even take possession to reclaim the outstanding
debt.
To encapsulate, a mortgage embodies the transfer of a distinct interest in
immovable property to secure designated obligations. It deviates from the
comprehensive ownership transference characterizing a sale. A mortgage, apart from
bestowing security, endows the lender with rights and remedies in the face of borrower
default.
DIFFERENCE BETWEEN MORTGAGE AND
HYPOTHECATION
MEANING
Mortgage and hypothecation are distinct terms within the realm of securing loans
or debts, each carrying unique implications. Here’s an exploration of the disparities
between mortgage and hypothecation:
Mortgage:
Mortgage involves a specific category of security whereby the borrower (also
known as the mortgagor) transfers an interest in particular immovable property to the
lender (the mortgagee). This transfer serves as collateral for a loan or debt. The
principal motive behind this interest transfer is to ensure the repayment of the loan. A
pivotal facet of a mortgage is that the lender possesses the prerogative to take
ownership of the property and facilitate its sale if the borrower defaults on the debt
repayment.
Hypothecation:
Conversely, hypothecation constitutes another form of security wherein the
borrower (termed as the hypothecator) pledges movable assets—such as machinery,
vehicles, or inventory—to the lender (referred to as the hypothecatee). This pledge
operates as collateral for a loan or debt. It’s noteworthy that the borrower retains both
possession and ownership of the pledged assets. However, a charge or hypothecation
is established over these assets. In the event of default, the lender can lawfully take
hold of the hypothecated assets..
In summation, the fundamental distinction between mortgage and hypothecation
resides in the nature of assets deployed as collateral. Mortgage encompasses the
transfer of interest in immovable property, while hypothecation revolves around the
pledging of movable assets. Additionally, in the mortgage context, the lender possesses
the capacity to assume property possession, whereas hypothecation permits the
borrower to retain asset possession.
APPLICABILITY
Mortgage pertains exclusively to immovable assets, particularly real estate or
property. When a borrower secures a loan and employs the property as collateral, a
mortgage over the property is established. This delineates that failure to adhere to the
stipulated loan terms empowers the lender to initiate property foreclosure and
subsequent sale to recoup the unpaid debt. Immovable property, in the realm of
mortgages, operates as the security for the loan.
Hypothecation is apt for movable assets. This construct involves a borrower
committing movable assets—such as equipment, vehicles, or inventory—as collateral
for a loan. The borrower preserves possession and utility of these assets, while
concurrently conferring hypothecation rights upon the lender. In the event of borrower
non-compliance, the lender can seize and vend the pledged assets to recuperate the
outstanding debt. Hypothecation facilitates borrowers in utilizing their movable assets as
collateral without necessitating asset ownership transfer.
UNDER ACT
Mortgage is defined under the Transfer of Property Act, 1882. Encompassing
the legal landscape in India, the Transfer of Property Act governs property rights
transference. It furnishes the regulatory framework for various property transactions,
including mortgages, leases, sales, and gifts. The Act delineates and manages the
rights and responsibilities of involved parties in property transfers. It codifies the rights
and remedies of mortgagees and mortgagors, ensuring protection for both lenders and
borrowers.
Hypothecation isn’t allocated a specific definition within an Indian act.
Nonetheless, it constitutes a commonly employed term within financial and banking
domains. Hypothecation denotes the practice of offering an asset as collateral for a loan
sans transferring ownership. The rights and duties intertwined with hypothecation are
typically subject to contractual agreements between borrowers and lenders. These
agreements encompass the formation, enforcement, and release of hypothecation. A
melange of laws—comprising the Indian Contract Act, Banking Regulation Act, and the
Securitization and Reconstruction of Financial Assets and Enforcement of Security
Interest (SARFAESI) Act—might apply to distinct facets of hypothecation transactions.
These regulations ensure equitable practices and safeguard the rights of all involved
parties.
INDICATION
Mortgage alludes to the transfer of interest in a specific asset, often an
immovable property such as land or a house, from the borrower (referred to as the
mortgagor) to the lender (the mortgagee). This transfer is executed to secure a loan or
debt repayment. While the borrower sustains possession and ownership of the property,
the lender garners a lawful interest. This interest transfer empowers the lender to seize
the property and effectuate its sale to retrieve the pending debt if the borrower fails to
fulfill the loan conditions. Complete repayment of the debt prompts the release of the
mortgage, reinstating unencumbered property ownership to the borrower.
MORTGAGE INCLUDES-
“Mortgage by Conditional Sale”
Mortgage by Conditional Sale denotes a distinctive form of mortgage
arrangement wherein the borrower seemingly sells the property to the lender,
contingent on the understanding that ownership will be reinstated to the borrower upon
full repayment of the mortgage debt.
In this construct, the initial transaction mirrors a sale procedure, as the borrower
transfers property ownership to the lender. Nevertheless, this ownership transfer is
conditioned upon the understanding that once the mortgage amount is fully reimbursed,
ownership will revert back to its original possessor.
The fundamental rationale behind this mortgage variant is to furnish the borrower
with financial backing while utilizing the property as collateral. By partaking in a
mortgage by conditional sale, the borrower can access funds by temporarily
surrendering ownership to the lender, with the clear intent of regaining total ownership
post debt settlement.
Throughout the mortgage tenure, the borrower sustains possession and usage
rights of the property. The lender retains the title as security for the loan, yet the
borrower maintains specific entitlements and obligations tied to the property.
Upon the borrower’s complete discharge of the mortgage debt, the stipulated
condition of the conditional sale is fulfilled. Subsequently, the lender effects the transfer
of property ownership back to the borrower, effectively concluding the mortgage
transaction.
It’s imperative to acknowledge that if the borrower falters in repaying the
mortgage as per the agreed terms, the lender might possess the prerogative to initiate
property foreclosure and effectuate its sale to recuperate the pending debt.
In essence, a mortgage by conditional sale stands as a legal accord that
momentarily furnishes the borrower with financing options through property collateral. It
presents a channel for securing a loan while concurrently upholding the potential for the
borrower to regain complete property ownership upon successful debt settlement
A Usufructuary Mortgage
A Usufructuary Mortgage is a specific type of mortgage in which the possession
of the property is handed over to the mortgagee (lender). Differing from other mortgage
forms, this setup grants the mortgagee not only the property for security purposes but
also the entitlement to reap the property’s income or advantages during the mortgage
tenure.
In this structure, the borrower (mortgagor) transfers property possession to the
mortgagee. The mortgagee can either utilize the property for personal use or lease it out
to generate income. The income garnered from the property serves as a channel for
repaying the mortgage debt.
Despite the mortgagee’s right to possess and gain from the property, ownership
remains vested in the borrower. The borrower retains the title and holds the potential to
reclaim property possession and ownership upon the successful repayment of the
agreed-upon mortgage debt.
Throughout the mortgage term, the mortgagee bears the responsibility of
property maintenance and covering pertinent taxes or expenses linked to the property.
They possess the authority to collect rent or exploit the property’s resources to their
advantage.
Usufructuary mortgages are frequently employed in scenarios where the
mortgagee seeks a steady income stream during the mortgage period. It furnishes the
mortgagee with the ability to utilize the property for generating income and recovering
their investment.
It’s crucial to underscore that if the borrower falters in meeting their repayment
commitments, the mortgagee holds the prerogative to instigate property foreclosure and
vend it to recoup their outstanding debt.
In a nutshell, a usufructuary mortgage encompasses the transference of property
possession to the mortgagee, who is entitled to relish the property’s earnings and perks.
This setup grants the mortgagee the avenue to generate income while upholding the
property’s role as security. The borrower upholds ownership and has the prospect to
regain property possession upon the complete discharge of the mortgage debt.
English Mortgage
An English Mortgage represents a specific category of mortgage where the
borrower (referred to as the mortgagor) relinquishes property ownership to the lender
(known as the mortgagee) under the provision that ownership will be restored to the
borrower once the complete mortgage debt is settled.
This kind of mortgage entails the borrower’s personal commitment to repay the
mortgage sum on an agreed-upon date, as stipulated in the mortgage agreement. The
repayment sum generally encompasses the borrowed principal along with any accrued
interest.
The transfer of ownership within an English Mortgage is subject to a condition.
The lender holds the property as security until the borrower fulfills their repayment
commitments. Upon the full repayment of the mortgage debt, the lender then reverts the
ownership rights back to the borrower..
Throughout the mortgage duration, the borrower preserves the entitlement to
possess and utilize the property. The borrower bears the responsibility of property
maintenance and addressing applicable taxes or expenses tied to the property.
In the eventuality that the borrower defaults on their repayment obligations, the
lender holds the authority to initiate property foreclosure. Foreclosure entails the sale of
the property to recover the pending debt. The funds garnered from the sale are initially
allocated to repay the mortgage debt, with any remaining balance being returned to the
borrower.
The English Mortgage is named after the traditional mortgage system used
in England. It is also known as a “traditional mortgage” or a “legal mortgage.”
It’s pivotal to underscore that the specific terms and conditions governing an
English Mortgage can diverge based on the arrangement between the borrower and the
lender. These terms encompass the repayment timetable, interest rate, as well as any
supplementary provisions or clauses articulated in the mortgage agreement.
In summation, an English Mortgage entails the temporary transfer of property
ownership to the lender, conditioned upon its eventual restoration to the borrower
following the complete settlement of the mortgage debt. The borrower personally
commits to repaying the sum on an agreed date, and the lender retains the property as
security until the debt is entirely satisfied.
Anomalous Mortgage
Anomalous Mortgage is a category of mortgage that includes any other type of
mortgage or a combination of the previously defined mortgages. It refers to mortgage
arrangements that do not fit into the specific categories of mortgages such as Simple
Mortgage, Mortgage by Conditional Sale, Usufructuary Mortgage, or English Mortgage.
Anomalous Mortgage allows for flexibility and customization in mortgage
agreements. It enables parties involved to create unique mortgage arrangements that
suit their specific needs and circumstances. This category encompasses any mortgage
structure that deviates from the standard forms of mortgages but still operates within the
legal framework of mortgage laws.
The term “anomalous” suggests that these types of mortgages are not typical or
commonly encountered. They are considered exceptions or variations from the
established mortgage types. Anomalous mortgages may involve innovative provisions,
alternative repayment terms, or specific conditions that are not found in traditional
mortgages.
Examples of anomalous mortgages could include:
Combination Mortgages:
These involve a combination of two or more types of mortgages. For instance, a
mortgage arrangement may combine elements of a Simple Mortgage and an
Usufructuary Mortgage, creating a unique structure tailored to the specific needs of the
parties involved.
Mixed-Mortgage:
A mixed-mortgage pertains to a mortgage arrangement that amalgamates
attributes of both a mortgage and a pledge. Within this framework, the lender maintains
a security interest in the property akin to a mortgage, while also possessing the property
as collateral similar to a pledge
Reverse Mortgage:
A reverse mortgage is a category of mortgage tailored for homeowners,
frequently targeting older individuals. It facilitates borrowing against the accumulated
equity in their residences. The loan is settled upon the borrower’s property sale,
relocation, or demise. Reverse mortgages are crafted to offer seniors an added income
stream during their retirement phase
Bridge Loan:
A bridge loan is a short-term mortgage that helps bridge the gap between the
purchase of a new property and the sale of an existing property. It provides temporary
financing until the borrower can secure permanent financing or sell the property.
It’s crucial to emphasize that the precise terms and stipulations of an anomalous
mortgage can exhibit considerable diversity, contingent upon the agreement reached
among the concerned parties. These distinctive arrangements may necessitate
meticulous evaluation and legal counsel to guarantee conformity with pertinent laws and
regulations.
To encapsulate, Anomalous Mortgage represents an extensive classification
encompassing diverse mortgage arrangements that deviate from conventional
mortgage types. It allows for customized mortgage structures or combinations of
existing mortgage types to suit the specific requirements of the parties involved. These
mortgages are considered unique and may involve innovative provisions, alternative
repayment terms, or specific conditions that deviate from traditional mortgage
arrangements.
REGISTRATION OF MORTGAGE DEED
Requirement of Registration: The registration of a Mortgage Deed is mandated in
accordance with the regulations outlined in the Registration Act of 1908. This
registration is essential to confer legal authenticity upon the document and to establish
its admissibility as evidence in a court of law.
Document Preparation: The meticulous drafting of the Mortgage Deed ensues,
encompassing comprehensive particulars of the mortgage arrangement. This
encompasses the identification and contact information of the involved parties, intricate
specifications of the mortgaged property, the precise terms and conditions governing
the mortgage, as well as any specific clauses mutually agreed upon.
Stamp Duty Payment: The payment of stamp duty on the Mortgage Deed is a requisite
step, the magnitude of which hinges upon the value of the mortgage or the sum secured
by it. This financial obligation is discharged via the procurement of appropriate stamp
papers, adhering to the regulations stipulated by the relevant state statutes.
Visit to the Sub-Registrar’s Office: A joint visit by both the mortgagor (borrower) and
the mortgagee (lender) to the local Sub-Registrar’s Office ensues. The original iteration
of the Mortgage Deed, coupled with requisite photocopies, constitutes the essential
documentation during this visit.
Presentation of Documents: The conveyed documentation, inclusive of the Mortgage
Deed and its photocopies, is presented before the Sub-Registrar for scrutiny. The
official undertakes a meticulous review, validating the accuracy and completeness of
the provided information.
Witness Requirement: The involvement of two impartial witnesses, distinct from the
involved parties, is often a requisite during the registration proceedings. These
witnesses validate their presence by appending their signatures, substantiating the
formal execution of the Mortgage Deed.
Document Examination: The Sub-Registrar meticulously scrutinizes the Mortgage
Deed, contrasting it with the provided photocopies. This comprehensive review
endeavours to detect any potential errors, omissions, or inconsistencies within the
document.
Execution and Registration: Following the Sub-Registrar’s contentment with the
precision and legitimacy of the Mortgage Deed, both the mortgagor and mortgagee
formally endorse the document in the presence of the Sub-Registrar. This culminates in
the official registration of the Mortgage Deed, wherein a distinct registration number,
seal, and stamp are affixed to validate the process.
Document Return: Subsequent to successful registration, the duly endorsed Mortgage
Deed is returned to the respective parties, inclusive of appropriate endorsements and
seals substantiating the fulfillment of the registration protocol.
Certified Copies: Parties are entitled to procure certified copies of the registered
Mortgage Deed from the Sub-Registrar’s Office. These certified reproductions serve as
tangible evidence of registration and can be instrumental for future reference or legal
proceedings.
Time Limit: It is paramount to acknowledge the time-bound aspect of Mortgage Deed
registration, as stipulated by the pertinent state statutes. The failure to adhere to this
designated timeframe could potentially attract penalties or render the mortgage legally
unenforceable.
The act of registering a Mortgage Deed not only confers legal validity but also
reinforces the enforceability of the mortgage agreement. It effectively safeguards the
rights and interests of both the mortgagor and mortgagee by instating an officially
documented record of the mortgage transaction
Gift Deed: The main document that outlines the transfer of the property as a gift from
the donor to the donee. It should be prepared on stamp paper of the appropriate value
and duly executed by the donor and the donee.
Identity Proof: Documents that establish the identity of the donor and the donee, such
as their Aadhaar card, PAN card, passport, or any other government-issued
identification.
Address Proof: Proof of residence for both the donor and the donee, which may
include documents like a utility bill, bank statement, or voter ID card.
Property Documents: Relevant property documents that establish the ownership of the
property being gifted, such as the sale deed, title documents, or previous gift deeds (if
any).
No Objection Certificate (NOC): In some cases, a NOC may be required from other
legal heirs or family members who have a share in the property, waiving their rights to
the gift.
Encumbrance Certificate: This document provides information about any existing
encumbrances, such as mortgages or liens, on the property being gifted.
Passport Size Photographs: Recent passport-sized photographs of the donor and the
donee may be required for the registration process.
STEP FOR GIFT DEED REGISTRATION
To draft a deed with the following essentials, the points to consider are:
Date and Place of Execution: Begin by mentioning the date and place where the deed
is being executed.
Information about Donor and Donee: Provide detailed information about the donor
and the donee, including their respective dates of birth, residential addresses, full
names, and the relationship between them.
Description of the Property: Include a comprehensive description of the property
being gifted, highlighting its specific details such as the address, dimensions,
boundaries, and any distinguishing features.
Presence of Two Witnesses: Ensure the presence of two witnesses during the
execution of the deed. Provide their names, addresses, and other relevant details to
establish their credibility.
Signatures of Donor and Donee: Obtain the signatures of both the donor and the
donee on the deed, indicating their consent and agreement to the terms mentioned. The
signatures serve as evidence of their involvement in the transaction.
Signatures of Witnesses: Lastly, obtain the signatures of the witnesses on the deed,
signifying their presence and attestation to the execution of the document. Their
signatures provide additional authenticity and validity to the deed.
By incorporating these essential elements into the deed, including the date and
place of execution, details of the donor and donee, a comprehensive property
description, the presence of witnesses, and the respective signatures, a well-drafted
and legally binding gift deed can be created.
Printing on Stamp Paper: Once the gift deed is drafted, print it on stamp paper with
the appropriate value as per the stamp duty rates applicable in the respective state. The
stamp duty amount may vary from state to state.
Determine Stamp Duty Rate: Research and ascertain the stamp duty rate applicable
in the state where the gift deed is being executed. The stamp duty is usually based on
the market value or the transaction value of the gifted property.
Obtain Stamp Paper: Obtain the required denomination of stamp paper from a
licensed stamp vendor or authorized agency. Ensure that the stamp paper is valid and
complies with the legal requirements.
Execute the Gift Deed: Sign the printed gift deed in the presence of witnesses. The
donor, the donee, and the witnesses should put their signatures at the designated
spaces on the deed.
Register at Registrar/Sub-registrar Office: Finally, visit the registrar/sub-registrar
office in your locality to register the gift deed. Submit the signed and stamped gift deed
along with the necessary supporting documents as per the registrar’s requirements.
Pay Registration Fees: Pay the applicable registration fees for the gift deed
registration process. The registration fees are based on the value of the gifted property.
By following these steps, including printing the gift deed on stamp paper of the
applicable value, determining and paying the stamp duty, executing the deed with
signatures of the parties involved, and registering the gift deed at the registrar/sub-
registrar office, the entire process can be completed effectively and in compliance with
legal procedures.
Gifts under Mohammedan Law
In Muslim Law, the concept of gift differs from that outlined in the Transfer of
Property Act. In this context, a gift refers to the transfer of property or rights from one
individual to another based on Islamic principles. It encompasses the following:
Hiba:
Hiba refers to the immediate and unconditional transfer of ownership of a
property or right without any consideration attached to it.
Shariat:
Shariat involves granting a limited interest to someone in relation to the use or
enjoyment of a specific property or right.
Sadaqah:
If a gift is made without any consideration and the intention behind the gift is to
attain religious merit, it is referred to as sadaqah.
In Muslim Law, these various forms of gifts serve as means of transferring
property or rights between individuals based on Islamic principles, highlighting the
importance of intention and religious merit in the act of giving.
Declaration by the Donor: The donor must clearly express their intention to make the
gift.
Acceptance by the Donee: The donee must accept the gift willingly and explicitly.
Delivery of Possession: If possible, the physical transfer of the gifted property should
take place.
Dissimilar to the Transfer of Property Act, the registration of a document is not
obligatory to validate the gift of immovable property according to Muslim Law.
Furthermore, within Muslim Law, a gift made in favor of a child in the mother’s womb
remains valid if the child is born within six months from the gift’s date. This presumption
is rooted in the child’s existence during the gift’s occurrence.
To sum up, the key components of a gift under Mohammedan Law encompass
the donor’s declaration of the gift, the donee’s acceptance, and, if feasible, the actual
delivery of possession. Immovable property doesn’t require mandatory registration, and
a gift to an unborn child remains valid if the child is born within six months of the gift
Revocation of Gift Deed:
Under Section 126 of the Transfer of Property Act, 1882, there exist particular
situations in which gifts have the possibility of being revoked. Revocation signifies the
nullification of the Gift Deed, leading to the property’s possession being returned to the
donor.
The grounds for revocation of a gift include:
Failure to Meet Conditions: In cases where the conditions outlined in the gift deed are
not satisfied, the donor retains the authority to revoke the gift.
Non-Performance of Obligations: Should the donee not uphold their responsibilities
or carry out agreed-upon actions as detailed in the gift deed, the donor possesses the
prerogative to revoke the gift.
Non-Acceptance: If the donee refuses to accept the gift or explicitly declines it, the
donor can revoke the gift.
Mutual Agreement: The donor and donee can mutually agree to revoke the gift,
typically through a written agreement.
Legal Proceedings: There are instances where a court might decree the revocation of
a gift due to legal reasons like fraud, coercion, or undue influence.
Upon revocation of a gift, the Gift Deed is rendered void, and ownership of the
property returns to the donor It is essential to follow the legal procedures and
requirements outlined in the Transfer of Property Act to ensure a proper and valid
revocation of a gift. In the case of Thakur Raghunathjee Maharaj v. Ramesh Chandra,
the Honorable Supreme Court made a significant ruling regarding the validity and
enforceability of conditions in a gift deed. The court stated that even if a condition is not
explicitly mentioned in the gift deed itself, but is agreed upon separately as part of the
transaction, it would still be considered valid and enforceable.
This landmark judgment highlights the importance of recognizing the intent and
agreement of the parties involved in a gift transaction. It emphasizes that the terms and
conditions agreed upon by the donor and donee, regardless of whether they are stated
in the gift deed or separately in a mutual agreement, hold legal weight and must be
honored.
This ruling provides clarity and protection for parties involved in gift transactions,
ensuring that any additional conditions agreed upon between the donor and donee are
legally binding. It reinforces the principle that the terms of a gift extend beyond the
contents of the gift deed itself, as long as they are part of the overall transaction and
have been mutually agreed upon.
Therefore, individuals involved in gift transactions should carefully consider and
clearly define any conditions they wish to impose, whether they are mentioned in the gift
deed or agreed upon separately, to ensure their enforceability and avoid any potential
disputes in the future.
POWER OF ATTORNEY
A Power of Attorney (POA) is a formal written document that authorises one
person to act on behalf of another. The individual who grants this authority is generally
referred to as the primary, grantor, or donor. Depending on the specific legal
terminology used in the area, the individual receiving the right to act is commonly
referred to as the agent, attorney, or attorney in fact.
In historical context the term “power” referred to a document sealed under
authority while a “letter” indicated a document signed by involved parties. However
modern practices might require powers of attorney to be notarized or witnessed for
validation.
A Power of Attorney empowers the designated individual to make decisions, sign
documents and perform specific tasks on the principal’s behalf. The extent of authority
can range from limited powers for specific matters to broad powers covering diverse
legal and financial affairs.
Using a Power of Attorney offers flexibility and convenience for individuals who
cannot or are unavailable to handle certain matters themselves. It empowers them to
designate a reliable individual to represent their interests and make decisions on their
behalf in situations where they are unable to do so.
Significantly, the authority granted through a Power of Attorney can be withdrawn
or modified by the principal, provided they are mentally competent. Additionally the
agent or attorney in fact is obligated to act in the principal’s best interests and strictly
within the boundaries of the authority specified in the Power of Attorney document.
A power of attorney is a legal document that permits one or more people to
delegate authority to another person or people to act on their behalf. It serves as a
written authorisation that allows one individual to delegate particular activities or make
choices on their behalf.
The person providing the authority is referred to as the “donor,” while the person
receiving the authority is called the “donee.”
The power of attorney functions as a mechanism for the donor to transfer their
rights and responsibilities to the donee. This enables the donee to act on behalf of the
donor in various matters, including legal, financial, or personal affairs. The scope of
authority granted can be customized to suit the donor’s specific requirements.
Different types of powers of attorney exist based on the nature of the authority
granted. A “special power of attorney” is designated for a specific act or set of acts. This
confines the authority to particular tasks or situations. Conversely, a “general power of
attorney” is employed for a wider range of actions or responsibilities. It bestows the
donee with general authority to act on behalf of the donor across various matters.
The power of attorney is a versatile legal tool that allows individuals to designate
a trusted person to manage their affairs, especially when they are unable or unavailable
to do so themselves. The donor must carefully consider the extent of authority granted
and select a dependable donee to act in their best interests.
Crucially, a power of attorney can be revoked or modified by the donor as long as
they possess the legal capacity to do so. The donee is bound to act in accordance with
the donor’s instructions and wishes, within the authority established by the power of
attorney document.
IMPORTANT POINTS TO REMEMBER
BEFORE MAKING POWER OF ATTORNEY
The law governing power of attorney is regulated by the provisions of the Power
of Attorney Act, 1882. According to this law:
An agent acting under a power of attorney operates on behalf of the principal.
The agent carries out actions and signs documents in the name of the principal,
unless specified otherwise.
Any document executed or task performed by an agent based on the power of
attorney is considered legally valid and binding, as if it were done by the principal
directly.
The agent’s authority is derived solely from the powers granted to them in the
power of attorney by the principal.
The agent’s actions are limited to the scope of authority specified in the power of
attorney.
The agent’s authority is strictly confined to the powers expressly granted to them
and must not extend beyond the instructions outlined in the power of attorney
document.
The agent bears the responsibility to exclusively prioritize the principal’s best
interests and act in alignment with the principal’s directives.
The actions carried out by the agent hold legal validity on behalf of the principal,
with the principal assuming accountability for the outcomes stemming from those
actions.
A power of attorney establishes a legally binding relationship between the
principal and the agent, defining their respective rights, obligations, and confines.
The principal retains ultimate oversight and control over the areas entrusted to
the agent and retains the ability to revoke or modify the power of attorney as long as
they possess the legal competence to do so.
In essence, a power of attorney empowers an agent to act on the principal’s
behalf within the specified scope of authority, attributing the agent’s actions to the
principal. The agent is compelled to consistently uphold the principal’s instructions and
act in their utmost interest.
An agent does not receive any personal benefits of any kind. This principle was
affirmed in the case of Suraj Lamp and Industries Private Limited v/s. State of Haryana
& Anr., where it was established that:
A power of attorney does not transfer any form of ownership, rights, or interest in
an immovable property. Instead, it establishes an agency relationship that empowers
the agent to carry out specific actions on behalf of the grantor. When these actions are
undertaken by the agent, they are legally binding on the grantor as if the grantor had
personally executed them.
The power of attorney retains the potential for revocation or termination at any
point, unless it is formally designated as irrevocable in accordance with recognized legal
procedures.
In essence, a power of attorney refrains from granting ownership or rights
concerning an immovable property. It serves as a legal tool authorizing the agent to act
on behalf of the grantor, with the grantor retaining full accountability for the agent’s
actions. The power of attorney can be revoked or terminated, unless it is explicitly
stipulated as irrevocable, adhering to the relevant legal norms.
The execution of a power of attorney can involve multiple individuals as either
grantors or recipients of authority. When endowing authority to multiple individuals, it’s
prudent to specify whether the donees will act collectively or both collectively and
individually.
To ensure the safeguarding of one’s interests, several precautions should be
observed when entering into a power of attorney agreement. These fundamental
guidelines apply universally, regardless of whether the power of attorney is bestowed
upon a family member or a trusted acquaintance. By adhering to these precautions, one
can protect their rights and establish a secure arrangement.
1. It’s pivotal to comprehend the distinction between a Letter of Authority
(LOA) and a Power of Attorney (POA). While an LOA suits minor tasks, for
more substantial matters involving significant financial transactions or
assets, it’s advisable to execute a power of attorney. A POA confers more
enforceable rights and responsibilities, especially in situations involving
disputes or legal complications.
2. Assurance must be taken that the Power of Attorney is duly registered and
that the relevant stamp duty is paid in accordance with the regulations of
the state where the POA is executed. The legal jurisdiction pertaining to
the POA should align with its execution location and the stipulated stamp
duty payment. An unregistered POA holds a comparable legal status to an
LOA and might lack enforceability in a court of law.
3. Ensure that the signatures and photographs of both the principal and the
power agent are affixed to the Power of Attorney. This serves as a
valuable source of information in case any transactions under the POA are
disputed in the future or if the POA becomes subject to legal proceedings.
4. Before accepting the POA, the holder should verify whether the principal
or donor of the POA possesses a valid title to the property, and that their
name is duly recorded as the owner in government revenue records.
Additionally, the holder must also confirm that a no encumbrances
certificate has been obtained, indicating the absence of any outstanding
claims or liabilities against the property. These precautions help protect
the interests of the power agent and ensure a smooth execution of the
powers conferred by the POA.
5. Clearly define the rights and responsibilities of both the principal and the
POA holder in the Power of Attorney document. This should include
provisions for important decisions such as leasing the property,
hypothecating the property, and selling the property. When using the POA
for loan purposes, verify that the power agent has the authority to sign
loan documents and create an equitable mortgage on behalf of the
principal in favor of banks or financial institutions.
6. Verify that the POA remains valid and the principal is alive on the date of
executing any document based on the POA. If the POA is not in force or
the principal is deceased, the POA becomes void from the beginning.
Generally, pre-dated or post-dated POAs are not accepted during the
registration process with the relevant authorities. These precautions
ensure the legal effectiveness and validity of the POA and protect the
interests of all parties involved.
7. If the Power of Attorney (POA) is being executed abroad, it is crucial to
follow these steps:
Ensure that the POA is either notarized or signed before Indian Consulate
officials.
After execution, the POA should be duly adjudicated within 120 days from the
date of execution.
Adjudication involves getting the POA certified and stamped by the appropriate
authority.
This process is particularly important for Non-Residential Indians (NRIs) who
often grant POAs to operate their local bank accounts and demat cum online trading
accounts.
Adhering to these requirements ensures the validity and legality of the POA,
especially when it involves international execution and transactions.
Authority of Donee
According to Section 2 of the Power of Attorney Act, 1882 (as amended in 1982),
the person to whom a power of attorney is granted, known as the “donee,” has the
authority to execute or perform any instrument or action using their own name,
signature, and seal (if required). This authority is granted by the donor of the power,
who is the person granting the power of attorney. When the donee exercises this
authority and executes or performs any instrument or action, it holds the same legal
effect as if it had been executed or done by the donee in the name, with the signature,
and seal (if applicable) of the donor.
In simpler terms, the donee of the power of attorney is allowed to act on behalf of
the donor, using their own name and signature, with the donor’s permission. Any
actions or instruments carried out by the donee in this manner are legally valid and
binding, just as if the donor had executed them personally using their own name,
signature, and seal. This provision empowers the donee to act with the full authority of
the donor, ensuring that transactions and legal matters can be efficiently and effectively
handled on the donor’s behalf.
Content of Power of Attorney
The contents of a power of attorney document can vary based on the specific
purpose and needs of the situation. Nevertheless, certain vital components should be
incorporated to ensure lucidity, enforceability, and the safeguarding of the rights and
interests of all concerned parties. The following are crucial aspects that should be
addressed in a power of attorney::
Identification of Parties:
The power of attorney should unequivocally identify the parties engaged in the
arrangement, namely the “principal” (the individual granting the power) and the “agent”
or “attorney-in-fact” (the individual receiving the power).
Intent and Scope:
The document should clearly state the intent to grant the power of attorney and
specify its scope. This includes defining the specific authority granted to the agent, such
as managing finances, making healthcare decisions, or conducting real estate
transactions.
Durability:
If the power of attorney is intended to remain in effect even if the principal
becomes incapacitated, it should include language indicating that it is a “durable” power
of attorney.
Effective Date and Duration:
The document should specify the date on which the power of attorney becomes
effective and outline any time limitations or expiration dates, if applicable.
Powers Granted:
A comprehensive list of the specific powers granted to the agent should be
included. These powers may include buying or selling property, operating bank
accounts, signing legal documents, making healthcare decisions, and more.
Limitations and Restrictions:
Any limitations or restrictions on the agent’s authority should be clearly outlined
to prevent misuse or unauthorized actions.
Revocation:
The process for revoking or terminating the power of attorney should be
addressed. This may include specifying the conditions under which the power of
attorney can be revoked and the method by which the revocation should be
communicated.
Signatures and Witnesses:
The power of attorney document should be signed and dated by the principal, the
agent, and any required witnesses. The witnessing requirements may vary depending
on local laws.
Notarization:
Although not universally obligatory, it is recommended to have the power of
attorney document notarized, as this adds an extra level of authenticity and legal
validity.
It’s worth highlighting that the contents of a power of attorney can differ based on
the jurisdiction and the specific demands of the scenario. Seeking guidance from a legal
expert is advised to guarantee that the document adheres to applicable laws and fulfills
the principal’s intentions and requirements.
Registration and stamp duty of Power of
Attorney:
In legal practice, the authority to appoint an attorney through a power of
attorney is vested in individuals who are at least 18 years old and mentally
competent. However, minors are not eligible to be appointed as attorney
holders. For a power of attorney to hold legal validity, it must be duly signed by both the
principal and the attorney, and the signatures must be witnessed by two individuals.
Additionally, the power of attorney document should be executed on a stamp paper of
appropriate value, taking into account the stamp duty rates applicable in the specific
state where it is being created. The payment of stamp duty for a power of attorney is
governed by Article 48 of the Stamp Act.
While it is essential to ensure the proper execution and stamping of the power of
attorney, registration is not mandatory unless the document involves the transfer of
property rights or titles. In such cases, registration becomes necessary to make the
power of attorney deed legally enforceable in the eyes of the law.
Overall, understanding these crucial points is essential for individuals seeking to
establish a legally valid power of attorney. By adhering to the prescribed procedures
and legal requirements, one can ensure that the power of attorney grants the
appropriate authority to the attorney-in-fact while protecting the rights and interests of
the principal.
WILL
A Will, also known as a Testament, is a legally binding document that outlines a
person’s desires regarding the distribution of their property after their death. It also
designates an executor who will be responsible for managing the property until its final
distribution. While there has been a distinction in the past between “will” referring to real
property and “testament” referring to personal property, historical records indicate that
these terms have been used interchangeably. Therefore, the term “will” is valid for both
personal and real property, encompassing all types of assets that a person wishes to
allocate according to their wishes. The Indian Succession Act of 1925 contains the laws
pertaining to wills, except for wills made by Mohammedans. Mohammedan Law governs
the creation of wills for individuals following the Islamic faith, allowing them to make oral
or written wills without the need for specific formalities such as signatures and attesting
witnesses.
However, Mohammedans are not restricted from executing written wills that
comply with the requirements set forth in the Act. It’s important to note that Hindus,
Buddhists, Sikhs, and Jains are not subject to all the provisions outlined in Part VI of the
Indian Succession Act. As per Section 2 (h) of the Act, a “will” refers to the lawful
expression of a testator’s intention regarding the distribution of their property, which
they wish to be executed after their demise. The primary concept behind a will is for the
testator to allocate their property or the permissible portion thereof, according to their
personal law, in a manner that they consider most suitable.
WHO CAN MAKE A WILL?
Any individual who has reached the age of majority, which is 18 years in India
according to the Indian Majority Act of 1875, and is mentally competent, has the right to
create a will. Even a person of unsound mind can create a valid will if it is done during a
lucid interval. However, a will made by a minor is considered void, although a
testamentary guardian may dispose of their property. As for the beneficiaries of a will,
the answer is straightforward. Sections 112-117 of the Indian Succession Act specify
that any person who is capable of holding property can be named as a beneficiary in a
will. This means that minors, individuals of unsound mind, juristic persons, corporations,
and others can all be recipients of bequests in a will.
REASON OF MAKING WILL
Creating a will is often perceived as a cumbersome task, leading many
individuals to pass away without a will, known as dying intestate. However, the
significance of having a will cannot be overstated. To illustrate this, consider the
following scenario: Mr. India has three sons named Goa, Assam, and Punjab. While he
shares a close bond with Goa, he does not have a favourable relationship with Assam
and Punjab. Due to the belief that making a will is a complex process, Mr. India chooses
not to create one. Unfortunately, he passes away unexpectedly. As a result, his property
is divided equally among his three sons, contrary to Mr. India’s wish of leaving
everything to Goa. This example underscores the importance of having a will. In the
following points, I will highlight ten compelling reasons why it is essential for every
individual to have their own will.
The primary importance of a will lies in its ability to provide clear and
unambiguous instructions regarding the distribution of the deceased individual’s
property and estate.
By specifying the beneficiaries for each share of the property, a will reduces the
potential for confusion and minimizes the likelihood of future disputes among family
members.
A will empowers individuals to choose the recipients of their property after their
demise. In the absence of a will, the property is distributed according to the laws of
intestate succession outlined in the Hindu Succession Act, which may result in
individuals inheriting the property whom the deceased may not have preferred.
Creating a will provides a safeguard for minor children by allowing the individual
to appoint a guardian of their choice and make financial arrangements for their well-
being.
A will plays a crucial role in safeguarding one’s business interests. By
designating preferred heirs and transferring power of attorney, individuals can ensure a
smoother transition of their company and minimize conflicts in future business
endeavours.
In the event of remarriage, a will helps protect the inheritance rights of children
from a previous marriage, ensuring they are not excluded from receiving their rightful
share of the estate.
Wills not only allow individuals to designate inheritances for friends and family
members but also provide the opportunity to include charitable organizations or any
other desired beneficiaries.
A significant advantage of a will is its flexibility. It can be revoked or modified
during the testator’s lifetime. If circumstances change or if the testator becomes
dissatisfied with the behaviour of any relatives, they have the freedom to exclude them
from their will.
When a person dies without a will (intestate), complex laws of inheritance and
succession come into effect. These laws are often intricate and challenging to interpret.
Due to their subjective nature, people tend to interpret them according to their own
interests, resulting in family disputes over the deceased’s property. Additionally, these
laws vary among individuals of different religions, adding further complexity to the
situation.
TYPES OF WILL
(1) Privileged and Unprivileged Will:
The Indian Succession Act of 1925 grants certain privileges to soldiers, airmen,
and mariners at sea who are involved in expeditions or active warfare. These privileges
are designed to address the challenging circumstances faced by individuals in military
service. Section 66 of the Act outlines the provisions related to these privileges, and
wills falling under this category are known as Privileged Wills. Privileged wills can be
oral or written, and they enjoy certain exemptions from the formalities required for
unprivileged wills, such as the need for signatures and attestation. Notably, privileged
wills may include valid instructions expressed verbally in the presence of witnesses or
written instructions that are considered valid after the soldier’s death.
(2) Contingent / Conditional Wills:
Contingent or conditional wills are created with provisions that depend on the
occurrence of a specific event in the future for their execution. These types of wills
serve various purposes. As an example, a person creating a will might want to motivate
a family member by specifying that they’ll receive a certain property only upon
successfully completing law school with a minimum grade of 70%. Moreover, an
individual preparing to travel overseas could incorporate a provision in their will to
ensure that their assets are distributed appropriately in case of their demise during the
journey. It’s essential to emphasize that any condition that contradicts the law or is
considered unenforceable cannot be included in a will.
(3) Joint Wills:
Joint wills are testamentary documents created when two or more individuals
agree to make a single will together. These types of wills are commonly made by
married couples, with the intention of leaving their property to their spouse upon the
death of one of them. A joint will can also be designed to take effect only after the
passing of all the testators. In such cases, as long as any of the testators are alive, a
single testator cannot revoke the will on their own. Revocation of the joint will would
require the consent of all the testators. Only when all the other testators have passed
away, the surviving testator can revoke the will individually.
(4) Mutual Wills:
Mutual wills are a type of will where two individuals agree to create a will based
on mutually agreed terms and conditions. In these wills, the testator designates the
other person as their beneficiary. Typically, married couples who have children from
previous marriages make mutual wills to protect the interests of those children. The
terms and conditions of the will remain binding on the surviving partner after the death
of the first partner. Mutual wills help ensure that the property passes to the deceased’s
children rather than a new spouse of the surviving partner in the event of remarriage.
(5) Duplicate Wills:
When there exist two identical copies of a will, they are referred to as Duplicate
Wills. Although there are two copies, they are considered as a single will. Creating a
duplicate will is a straightforward process. The testator needs to make a second copy of
the will, sign it, and have it attested in the same manner as the original will, as per
Section 63 of the Indian Succession Act, 1925. One copy can be retained by the
testator, while the other may be stored securely, such as in a bank locker, with a
trustee, the drafting attorney, or with the executor. The testator creates a duplicate will
with the intention of ensuring the execution of the will after their death. If the testator
destroys the copy of the will in their possession, it automatically revokes the other copy.
(6) Holographic Wills:
Wills that are entirely handwritten by the testator are referred to as Holographic
Wills. These types of wills carry their own significance. Since they are handwritten by
the testator themselves, they hold a strong presumption regarding their authenticity and
proper execution.
(7) Concurrent Wills:
Typically, a testator creates a single will to express their testamentary intentions.
However, for various reasons or ease of management, the testator may choose to make
separate wills for properties situated in different geographical locations. These co-
existing wills, addressing the testamentary wishes of the same testator, are referred to
as Concurrent Wills.
Contents of Will
Any person who has attained the legal age of adulthood and possesses the
cognitive ability to make informed decisions is eligible to draft a will, whether they
choose to do so independently or with the guidance of a legal professional. There is no
strict requirement to employ specialized legal terminology when composing a will.
Various forms of writing, such as handwritten or printed documents, are permissible.
However, it’s crucial to use clear and straightforward language that is accessible to
individuals without legal expertise, while refraining from intricate terminology that might
be challenging for non-experts to grasp.. t is advisable for the testator to familiarize
themselves with the laws concerning real properties and to study the provisions outlined
in Sections 57 to 120 of the Indian Succession Act.
The required content of a will can vary depending on the jurisdiction, but
generally includes the following:
Testator’s Name and Address: The will should mention the name and address of the
person making the will (the testator).
Clear Identification: The testator must clearly identify themselves as the creator of the
will. This is typically indicated by using the words “last will and testament” on the face of
the document.
Revocation of Previous Wills: The testator should explicitly declare that they are
revoking all previous wills and codicils (amendments to the will).
Capacity to Dispose of Property: The testator may demonstrate that they possess the
capacity to distribute their property and that they are doing so willingly and without any
undue influence.
Signature and Attestation: The testimonial clause, containing the testator’s signature,
and the attestation clause, involving the witnesses, play a critical role in the validity of a
will. Adhering strictly to the legal requirements for these clauses is essential for ensuring
the will’s legitimacy.
Both the testator and all the witnesses must sign on each page of the will
in the presence of the testator. While the witnesses are not obligated to be aware of
the will’s contents, they must have observed the testator signing or making their mark
on the will, or have witnessed another individual signing the will under the testator’s
guidance.
An executor is entrusted with the responsibility and authority to carry out
the instructions outlined in the will. This includes gathering and liquidating the
deceased’s assets, settling outstanding debts, and distributing the legacies as specified
in the will.
Registration and Stamp Duty on Will
No stamp duty is applicable to wills, and the registration of a will is not mandatory
but rather optional according to Section 18(c) of the Registration Act, 1908. However,
there are certain advantages to having a registered will.
A testator, either personally or through an authorized agent, has the option to
deposit their will in a sealed cover with any registrar. The cover should be clearly
labeled with the name of the testator and if applicable, the name of their agent.
Additionally the cover should indicate the nature of the document as stated in Section
42 of the Registration Act, 1908.
The testator, or any person claiming as executor or under the will after the
testator’s demise, has the right to present the will to any Registrar or Sub Registrar for
registration under Section 40 of the Registration Act, 1908.
Revocation of Will
According to Section 62 of the Indian Succession Act, a will can be revoked or
changed by the testator at any time when they have the ability to dispose of their
property through a will. Section 69 states that the marriage of the testator will
automatically revoke the will. Additionally, a will can be revoked by creating a new will.
The process of revoking unprivileged wills or codicils is specified in Section 70, while
Section 72 outlines the revocation procedure for privileged wills.
Probate and Letter of Administration
As per Section 213 of the Indian Succession Act, it is mandated that no
individual can establish their right as an executor or legatee in any court of law unless a
competent court in India has granted probate for the will or has issued letters of
administration along with the will or a duly authenticated copy of the will attached to it.
This requirement ensures that the legal recognition of rights and responsibilities under
the will is obtained through the appropriate legal channels.
Probate refers to the official certification granted by a competent court, which
confirms the authenticity of a will as the genuine will of the testator. It also grants the
authority to the executor named in the will to administer the deceased’s estate in
accordance with the instructions laid out in the will. This certificate is issued under the
seal of the court and serves as a legal validation of the will and the executor’s role in
carrying out the testator’s wishes.