It is not uncommon that we do come
across publication of notices in newspapers concerning the property
transactions.The reason for such publication is to make known to all the concerned
people that a particular property is under process of purchase by the Advertiser
and to give an opportunity to the affected party to raise objections, if any,
against such purchase.
For peaceful possession and enjoyment of the
property the Purchaser has to exercise proper care and diligence to ensure that
property purchased by him is free from encumbrances, charge and litigation.Any
laxity on the part of Purchaser to conclusively find out as to whether the Vendor
has good and marketable title and the property is free from encumbrance would
land the Purchaser not only in uncalled for litigation but also to financial
strain.
Public Notice:
At the outset, it may stated that issuance of Public
Notice in respect of purchase of an immovable property is not a statutory
requirement.There is no hard and fast rule as to the procedure an intending Purchaser
has to adopt to find out whether the Vendor has a valid and marketable title
and the property is free from encumbrance.The charge or encumbrance created
under an unregistered document on the property cannot be discovered from the
documents obtainable from the Registering or Municipal Authorities. Charge
created by deposit of Title Deeds, Pending Court Cases or Transfer of Property
under a will would fall into this category.
To protect
the interests of the Purchaser upon purchase of the property and to avoid litigation, normally Public Notices are taken out in leading and widely
circulated newspapers notifying the intention of the Purchaser to purchase the
property in question so that the persons, who have an vested interest in the
property could put forth their objections for such sale supported by
documentary proof. Such notices are generally published immediately after
entering into a Sale Agreement with the Vendor in two dailies one in English
language daily and other in vernacular language daily, which have wide
circulation in the area where the property is situated. The notice acts as an
intimation or information or a caution to all the concerned to facilitate them
to take such steps as are necessary to protect their interest.
A notice shall contain the intention of the Purchaser,
description of the property with boundaries and the fact of execution of the Sale Agreement, if any.The notice invites the public having interest in the property
to file objections along with documentary proof within a stipulated time.The
notice shall also indicate that in case no objections are received within the
stipulated time, the sale process will be preceded with treating the property
as unencumbered with a clear rider clause that objections received after the
stipulated time will not be acted upon. The notice must spell out in clear
terms the intention of the party with no ambiguity whatsoever.
It is to be noted that the issuance of Public Notice
can at best be termed as a precautionary step since, it has no binding force on
any one having interest in the property to act in a particular manner.The
interested party may not act swiftly in terms of the notice and enforce his
right over the property at an opportune time. Further, there is very likelihood
that the Public Notice may go unnoticed by the affected party.However, the Public
Notice would serve as intimation to the Public that the Purchaser has a bonafide
interest in the property and the interested parties can file objections, if
any, for the said sale transaction.The Purchaser in his own interest has to get
the objections scrutinised by an experienced Advocate having knowledge in property matters so that he can avoid the likely litigations and embarrassment
at a later date after the purchase.
Section 55(1) of the Transfer of Property Act,1882
makes it mandatory that the Seller is bound to disclose to the Buyer any
material defect in the property or in the Seller’s title thereto, which the
Seller is and the purchase in not aware and the Buyer could not with ordinary
care discover such defect. But, the Seller for obvious reasons may not truly
disclose all the defects in the property or in his title.Therefore, it is
advisable that the Purchaser of the property should verify and make search of
all the relevant documents and exhaust all the avenues available to him to find
out that the property under consideration is free from encumbrance and the Vendor
has a good and marketable title.
Deemed Notice:
The Transfer of Property Act, 1882 puts some onus on
the Purchaser and in certain cases the Purchaser is deemed to have notice of
encumbrances. Section 3 of Transfer of Property Act defines “Notice”. A person
is said to have notice of a fact, when he actually knows the fact, or when, but
for willful abstention from an enquiry or search which he ought to have made,
or gross negligence, he would have known it. According to Explanation I to
sec.3, where any transaction relating to immovable property is required by Law
to be registered and accordingly registered, any person acquiring such property
or any part of or share or interest in the property shall be deemed to have
notice of such instrument from the date of registration.
The Explanation II to sec.3 stated that any person
acquiring any immovable property or any share or interest in any such property
shall be deemed to have notice of the title, if any, of any person who is for
the time being in actual possession thereof. Further, Explanation III to sec.3
states that a person shall be deemed to have had notice of any fact if his Agent
acquires notice thereof whilst acting on his behalf in the course of business
to which that fact is material. Thus, notice could be classified into (1)
Actual notice when a person has the knowledge of actual fact, (2) Constructive
notice, where the information is available on proper inquiry and search, and
(3) Notice to the Agent of the Purchaser, where the information is given to or
received by the Agent in the course of his ordinary duties, whether he
communicates it to his principal or not. Notice to the active partner of a firm
has the effect of notice of the firm.
Purchaser’s Obligation:
It is obligatory on the part of the Purchaser to
make sure that the Vendor has a clear marketable title of the property and the
property is free from encumbrance. Most of the encumbrances may be discovered
by verification of records at Jurisdictional Sub-Registrar’s Office and on verification
of the documents. It is an obligatory on the part of the Purchaser to verify
the title of the property as recorded in Registrars of Jurisdictional
Sub-Registrar’s Office. Registration of a document operates as notice and the
actual possession of the property by a person other than the Seller also
operates as notice. Therefore, it would be safer that the Purchaser shall visit
the property to ascertain whether the property is in possession of the Seller.
In case the property is in possession of a person other than the Vendor, it
should get confirmed whether the Occupant will vacate the property before
registration and the Vendor has every right to get the property vacated from
its Occupants since the Specific Relief Act 1963 recognizes the possession as a
notice and there are instances where properties are leased, but Lease Deeds are
not registered.
Though not a legal requirement,Public Notice
regarding purchase of immovable property would immensely benefit the Purchaser
since the Purchaser shall come to know as to whether there is any claimant over
the property under consideration and if any objections to the transactions are
received, the Purchaser may request the Vendor to sort out the issue before
completing the sale transaction or in the alternative he may cancel the deal.
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