SUPREME COURT DECISION ON ‘WILL’

                       

SUPREME COURT DECISION ON‘WILL’

Execution of a Will is required to be proved in terms of the provisions of Section 63(c) of the Indian Succession Act and Section 68 of the Indian Evidence Act.

In Janki Narayan Bhoir v. Narayan Namdeo Kadam, [(2003) 2 SCC 91], while dealing with the question elaborately, the Hon'ble Supreme Court has held as under:

“To say Will has been duly executed, the requirement mentioned in Clauses (a), (b) and (c) of Section 63 of the  Succession Act are to be complied with i.e., (a) the testator has to sign or affix his mark to the will, or it has got to be signed by some other person in his presence and by his direction; (b) that the signature or mark of the testator, or the signature of the person signing at his direction, has to appear at a place form which it could appear that by that mark or signature the document is intended to have effect as a will; (c) the most important point with which we are presently concerned in this appeal, is that the will has to be attested by two or more witnesses and each of these witnesses must have seen the testator sign or affix his mark to the Will, or must have seen some other person sign the Will in the presence and by the direction of the testator, or must have received from the testator a personal acknowledgement of signature or mark, or of the signature of such other person, and each of the 11 witnesses has to sign the Will in the presence of the testator."

As regards compliance of the provision of Section 68 of the Evidence Act, it was opined :

"In a way, Section 68 gives a concession to those who want to prove and establish a will in a Court of law by examining at least one attesting witness even though will has to be attested at least by two witnesses mandatorily under Section 63 of the Succession Act. But what is significant and to be noted is that one attesting witness examined should be in a position to prove the execution of a will. To put in other words, if one attesting witness can prove execution of the will in terms of Clause (c) of Section 63, viz., attestation by two attesting witnesses in the manner contemplated therein, the examination of other attesting witness can be dispensed with. The one attesting witness examined, in his evidence has to satisfy the attestation of a will by him and the other attesting witness in order to prove there was due execution of the will. If the attesting witness examined besides his attestation does not, in his evidence, satisfy the requirements of attention of the will by other witness also it falls short of attestation of will at least by two witnesses for the simple reason that the execution of the will does not merely mean the signing of it by the testator but it means fulfilling and proof of all the formalities required under Section 63 of the Succession Act. Where one attesting witness examined to prove the will under Section 68 of the Evidence Act fails to prove the due execution of the will then the other available attesting witness has to be called to supplement his evidence to make it complete in all respects. Where one attesting witness is examined and he fails to prove the attestation of the will by the other witness there will be deficiency in meeting the mandatory requirements of Section 68 of the Evidence Act."

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Proposed Land Acquisition Law – whether boon or bane?

Proposed Land Acquisition Law – whether boon or bane?

Acquisition of land for public utility shall always have social, economic and political repercussions and it is not an exception now. In spite of the fact that our country is predominantly agricultural sector based, if our country need to grow, the growth has to be from non-agricultural sector such as manufacturing and services, for which there is no alternative other than to depend on the land to provide much needed infrastructure development.

With this idea, Special Economic Zones (SEZs) were created; however, this concept did not work out effectively for obvious reasons, and there was a huge controversy over the land acquisition, resulting in several projects coming to a standstill. 

Recent studies reveal that delays in land acquisition is threatening to endanger investments in near term and may lead to create negative impact on our country’s economic growth, job opportunities and tax collection. 

In order to ensure that the owner of the land under acquisition shall have a right to fair compensation and the entire process will take place in a transparent manner, the Government brought into existence the ‘Right to Fair Compensation and Transparency in Land Acquisition Bill 2013”. In this, it is said to have features like compensation for the owners to the extent of four times the market value in rural areas and twice in case of urban areas, and it provides that consent of 80% of the displaced owners is required in case of acquisition for private or public sector. Even though these features appear to be attractive for the beneficiaries, there are some other features associated with the bill, such as, no consent required in case of acquisition for PSUs, and that the Government can temporarily acquire land for three years and that there would be no provision for rehabilitation and resettlement in such cases, etc. 

No doubt this proposed Law may be much advanced and fair replacement to the existing Law, but it is all the more important to ensure that the proposed Law is properly implemented for positive results. 

Therefore, one has to wait and watch over a period of time to understand whether the proposed Law will really offer what it promised and will lay the road for fast track infrastructure development or simply remain beating round the bush.  

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Querries on Property matters

Querries on Property matters

Certain hidden facts like pending cases, prior agreements, government notifications of the property cannot be traced out easily by verification of the documents.  How can these hidden factors be uncovered, and what should a purchaser do to protect himself against these hidden factors?

Rajan Kalyan, JP Nagar, Bangalore

Generally seller hands over the copies of the property documents to the purchaser to examine the title.  Such documents contain only title documents, which may be cross-checked in the sub registrar’s Office.  But they do not disclose any pending litigations, prior agreements which are not registered and government notifications.  As such, the Purchaser should be very cautious and make arrangements for thorough search of records at the concerned jurisdictional Courts to rule out the possibility of any pending cases and also in offices of Urban Development Authorities such as : BDA, BMRDA, KIADB, KHB, High way and other planning authorities etc., to rule out the acquisition notifications, if any.

Further, it would be difficult to verify any existing prior agreements or arrangements which are not registered.  As such, proper enquiries with owner of the property, and also with neighbours may be helpful.  It would always be better to register the sale agreement and get the property registered at the earliest.  Above all, Paper publication of the intention of the Purchaser to buy particular property would help the purchaser to a certain extent.  

What is Paper publication? How does it benefit the purchaser

Shenoy, Rajajinagar, Bangalore

Though the Paper Publication may not be a statutory requirement, yet the idea of getting a notice published in the widely circulated newspaper in the locality, is to elicit the information from the general public that a bona fide purchaser is intending to purchase the property from its owner.  Besides this, the paper notification also invites objections from various interested persons with documentary evidence in support of their claim within the specific period.

Even after issuance of such paper notification, a person said to have his claim to the property does not lose his rights just because he could not disclose his rights in response to such paper notification within the given time. 

I am not able to understand the difference between Khatha Certificate and Khatha extract.  Would you please enlighten me on this ? Could you also brief me about the importance of Encumbrance Certificate ?

Veeresh, Uttarahalli

Khatha is a revenue record maintained by the municipal authorities in respect of a property standing in the name of a particular person for purposes of assessment and collection of property tax.  As it is a secondary document in the absence of primary documents like Sale Deed, Gift Deed, Partition Deed, Release Deed, Will, Grant etc., however it does not establish the title in its totality. 

Khatha Certificate is a Certificate issued by the Municipal authority Office confirming that the Khatha of a particular property stands in the name of a particular person/s.

Khatha Extract is an Extract of the tax assessment register maintained at Municipal Office giving complete details of the property like: Area of the site, building, property tax levied, cess and total tax payable, name of the previous and present owner of the property, etc. 

Encumbrance Certificate is issued by Sub Registrar Offices for a specific period as required by the applicant.  It contain the details of the property like: Sy. No. House No. boundaries, and encumbrances on such property like: Sale, Gift, transfer, mortgage, if any, which are registered at the said sub registrar’s office.  However, the Encumbrance Certificate do not reflect the encumbrance transactions of deeds which are not registered. 

What is the procedure for Khatha transfer and how do we know that the Khatha transfer Certificate is genuine and original

Sreenivasa Prasad, Jayanagar, Bangalore

Transfer of Khatha of property to your name is to be done by the concerned jurisdictional revenue authority under whose jurisdiction the property is situated.  For this purpose, you have to apply for transfer of khatha in a duly filled Khatha Transfer application duly signed by both the Seller as well as Purchaser i.e., yourself, and enclose a copy of the registered Sale Deed, latest tax paid receipt and up to date encumbrance certificate along with the necessary fee. 

Thereafter, the authorities do acknowledge receipt of the application and indicate the date by which the process will be completed; however, the entire process is to be required to be completed within 45 days.  Meanwhile, the authorities may also call for certain additional information / document etc., if felt necessary for verification and confirmation.  Thereafter, the Khatha of the property would be transferred into your name and an endorsement will be issued in your name to this effect.  Thereafter, tax paid receipts on such property would be issued in your name, which show that the said property stands in your name. 

As regards ascertaining whether the Khatha Certificate issued is genuine and original or not, the Khatha Certificate is usually issued by the concerned jurisdictional Corporation Office and as such you may directly visit such office and obtain the same to confirm its genuineness and originality.      

Do the financial institutions permit the transfer of loan from one institution to other and what is the fee charged for such transfer and whether it would be better to transfer from one institution to other ?

Sadashiva murthy, Hosakote

Financial Institutions allow the transfer of loan from one institution to another even though they don’t want their existing loan accounts to be taken over by other institutions.  However, such institution which allow transfer of loan account may charge foreclosure charges for such transaction in order to minimize such transfer of loan accounts.  It is left to the customer as to when to transfer the loan from one institution to another taking into consideration various factors of which the major point is to look into the rate of interest besides other benefits which he would get from other institution on such transfer.  After obtaining in-principle approval from the taking over institution or bank, such transfer of loan account is possible. 

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11 MONTH LEASE DEED MUST BE REGISTERED

11MONTH LEASE DEED MUST BE REGISTERED

HC says if unregistered, such deeds cannot be ‘received as evidence of any transaction affecting the property’

The common practice of lease deeds (including rental agreements) between property owners and tenants for 11 months to avoid registering the deed is not the right thing to do. The high court of Karnataka has held that deeds where the term of the lease stated does not exceed one year alaso have to be registered.

In a particular case, the court held that such unregistered deeds cannot be received as evidence of any dispute between the tenant and property owner, unregistered deeds will only serve collateral purpose in courts and not as evidence.

Abdul Rasheed, a tailor and tenant of Srinivas, a retired district judge, approached the HC against a lower court order that refused to accept as evidence four unregistered lease deeds. Justice HG Ramesh probed the question “Whether a lease deed, where the term of lease stated therein does not exceed one year, requires to be registered under the Registration Act, 1908”.

In a significant order that comes as a surprise to common perception of this aspect of law, the courtheld, “In law, the lease deeds of the afore to be registered and therefore, such unregistered lease deeds cannot be received as evidence of any transaction affecting the property.”

Rasheed in his petition claimed that under the Act, if the term of the lease was less than one year, there was no need for registration.

Section 107 of the Act says, “ A lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument.” However, the HC order stressed the second paragraph of the section 107 which says, “All other leases of immovable property may be made either by a registered instrument or by oralagreement accompanied by delivery of possession.” Section 49 of the Act says that documents that need to be registered but are not cannot “be received as evidence of any transaction affecting such property.” The court held that the second paragraph of section makes it mandatory for lease deeds less than one year to be registered if they are not just oral. Therefore under section 49, they become inadmissible in court if not registered.

However, the court gave liberty to Rasheed to approach the trial court with the same documents specifically stating that they are for ‘collateral purpose’ only. Therefore unregistered lease agreements can be used only as collaborative evidence in court. The order renders most rental agreements invalid as evidence in court ifa dispute arises between the lessor and lessee.

 “Usually in disputes about rents, the rent receipts are produced as evidence. It is mostly residential properties that are registered for 11 months. Commercial properties usually have a longer lease agreement. The order is an eye-opener. In court, property owners do not produce the lease agreements as they are unregistered. If it is impounded by the court, they  will end up paying 11 times the stamp duty. This order may lead to a fresh struggle between house owners and tenants.”

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ADVANTAGE OF BUYING AN UNDER-CONSTRUCTION PROPERTY

         ADVANTAGE OF BUYING ANUNDER-CONSTRUCTION PROPERTY

                                                    

Many home-seekers are skeptical about buying under-construction flats as the transaction comes with an element of uncertainty. Ready-for-possession apartments, which do not pose such problems, always command premium. However, carrying out the requisite due diligence and taking some precautions could help you land in an attractive deal, mainly in terms of the discount in price and certain other benefits. 

For those buying a property from an investment perspective, an under-construction flat could offer good returns. Such investors can consider investing their money in a project when it has just been launched. Many developers offer to take the soft launch route-where the project details are circulated among a select few prospective buyers, with a discount on offer-before making a public announcement. 

The investor can sell the apartment to a third party and benefit from the appreciation. The only point to bear in mind in such transactions is that they are done on the basis of the allotment letter alone the agreement is not registered and the stamp duty is not paid. However, it is a perfectly legal transaction. 

The other advantage of buying an under-construction property is, obviously, the discounted price per sqft. The price of the property increases in line with the stage of completion. If a developer has launched a project before excavation, the discount could be in the region of 25%. It could shrink to 20% once which the construction is completed. 

Pre-construction phase is defined as the period starting from the date of borrowing and ending on March 31 immediately preceding the year in which construction is completed. For instance, if you have taken a loan in June 2008 and the construction is completed in May 2010, the period from June 2008 to March 31,2010 will be deemed to be the pre-construction period. 

Now, let's assume the total loan amount is Rs. 40lakh, borrowed at the rate of 10% per annum. If the total interest payable for the pre- period is Rs. 5lakh, 20% of the amount - Rs. 1lakh can be added to the interest component of each of the five years, starting from the year in which the construction is completed.If your house is self-occupied, the deduction on interest payable would be restricted to Rs.1,50,000 per financial year. 

Also, it needs to be noted that deduction of repayment of principal amount can be claimed under section 80C only from the financial year in which construction is completed. While taking the decision on the purchase of under construction flat, keep in mind the developments likely to take place in and around the area, in terms of infrastructure projects as well as other amenities like malls, schools and healthcare facilities expected to come up in and around the area. Most important is to verify the track record, previous performance of the promoter before entering into the agreement.

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ADJUDICATION AS TO STAMPS

                                ADJUDICATION AS TO STAMPS

                                                 

                                                 

                                      

The provisions of The Karnataka Stamp Act, 1957 regarding Adjudication as to stamps are as below;

Adjudication as to proper stamps

Section 31(1) When any instrument, whether executed or not and whether previously stamped or not is brought to the Deputy Commissioner, and the person bringing it applies to have the opinion of that officer as to the duty (if any) with which it is chargeable, and pays a fee of (one hundred rupees) the Deputy commissioner shall determine the duty (if any) with which, in his judgement, the instrument is chargeable.

(2) For this purpose the Deputy commissioner may require to be furnished with an abstract of the instrument, and also with such affidavit or other evidence as he may deem necessary to prove that all the facts and circumstances affecting the changeability of the instrument with duty or the amount of the duty with which it is chargeable are fully and truly set forth therein, and may refuse to proceed upon any such application, until such abstract and evidence have been furnished accordingly:

Provided that –

a)No evidence furnished in pursuance of this section shall be used against any person in any civil proceeding except in any enquiry as to the duty with which the instrument to which it relates is chargeable; and

b)Every person by whom any such evidence is furnished, shall on payment of the full duty with which the instrument to which it relates, is chargeable, be relieved from any penalty which he may have incurred under this Act by reason of the omission to state truly in such instrument any of the facts or circumstances aforesaid.

Certificate by Deputy Commissioner.

Section 32(1) When an instrument brought to the Deputy Commissioner under section 31, is in his opinion, one of a description chargeable with duty, and 

a)The Deputy commissioner determines that it is already fully stamped

b)The duty determined by the Deputy Commissioner under section 31, or such a sum as, with the duty already paid in respect of the instrument, is equal to the duty so determined, has been paid, the Deputy Commissioner shall certify by endorsement on such instrument that the full duty (stating the amount) with which it is chargeable has been paid.

(2)When such instrument is, in his opinion, not chargeable with duty, the Deputy Commissioner shall certify in manner aforesaid that such instrument is not so chargeable.

(3) Subject to any orders made under Chapter VI, any instrument upon which an endorsement has been made under this section shall be deemed to be duly stamped or not chargeable with duty, as the case may be; and, if chargeable with duty, shall be receivable in evidence or otherwise, and may be acted upon and registered as if it had been originally stamped:

Provided that nothing in this section shall authorise the Deputy Commissioner to endorse-

a)Any instrument executed or first executed in India and brought to him after the expiration of one month from the date of its execution, or first execution, as the case may be;

b)Any instrument executed or first executed out of India and brought to him after the expiration of three months after it has been first received in the State of Karnataka; or

c)Any instrument chargeable with a duty not exceeding fifteen paise or a mortgage of crop (Article 35 (a) of the Schedule)  chargeable under clause (a) or (b) of section 3 with a duty of twenty-five paise, when brought to him, after the execution thereof, on paper not duly stamped. 

c)Any instrument chargeable with a duty not exceeding fifteen paisa or a mortgage of crop chargeable under clause of section 3 with a duty of twenty five paise,when brought to him, after the execution thereof on paper not duly stamped

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ADDITIONS,ALTERATIONS AND CANCELLATIONS TO PROPERTY DOCUMENTS

ADDITIONS,ALTERATIONS AND CANCELLATIONS TO PROPERTY DOCUMENTS

                                                   

                                                     

Documents are the record of assorted transactions; they contain sure terms, conditions, thought quantity, and names of the parties to the dealing, date of the dealing, clear and complete description of the topic of dealing, thus on build them simply known. For example; Sale Deed of a property contains the origin, flow of the title, gift standing, names of marketer and buyer, thought quantity, easementary right and temporary description of the property with construction and limits. They’re the permanent records that are relied on for generations. Such documents should be clear, readable, and freed from error and will not produce any doubts or disputes. They replicate the terms of dealing that each the parties have freely consented.

At times, some additions, alterations, cancellations are inevitable, that are noticed at the time of execution. Any such alterations, cancellations, additions ought to be done before presenting the document for registration. All such modifications ought to be attested by full signature of all the parties to the documents. But, signature of witness isn't necessary for such modifications. Solely full signatures and not initials or short signature ought to be insisted. For cancellations, the initial words ought to be showing neatness stricken off; it ought to be signed by parties to the document. 

Erasing with fluid shouldn't be used. Registering Authority records such additions, alterations, cancellations page wise on the document itself. This validates the additions, alterations, cancellation etc. Any modifications done once the registration aren't valid and don't kind a part of the document. Moreover, the document itself becomes invalid. Copies of the registered documents are maintained at registering Offices and authorized copies issued by such Authorities additionally record on certified copies the amount of cancellations, additions and alterations done before registration. They are doing not contain something supplemental, deleted, changed once registration. So, correct care should be taken so all the modifications are done before registration below the complete signatures of all the parties to the transactions. If something should be modified once registration a separate Rectification Deed should be dead.

Filling up the blanks

Some documents could have blanks because the needed info are going to be out there solely at the time of execution. Typically date of execution is left blank, till the date is finalized. The small print of demand drafts, cheques like range, name of Bank, branches are all left blank. All such blanks ought to be crammed up before presenting the document for registration and will be attested by all the parties to the document or executor below full signature.

Attestation

Attestation means that witnessing the documents. Sure documents like can, Agreement to Sale, Sale Deed need attestation. Execution of the documents ought to be witnessed by 2 Persons, who are Major and of Sound mind. Each the witnesses ought to affix their full signature and will furnish their address. Attestation isn't necessary just in case of sure documents.

Thumb Impression

There are many folks who cannot sign. Thumb impression of such folks is taken for execution of documents rather than signature. Left hand Thumb impression (LTM) in case of males and right hand Thumb Impressions (RTM) in case of females ought to be obtained on documents for execution. Temporary description “LTM   or   RTM of Sri/Smt………………… “Has to be written at once below the thumb impression. Because the persons, who affix thumb impression are illiterate, who cannot browse or write, the whole contents of the documents ought to be browse over and explained to them and a separate note thereto result should be annexed to the document ideally signed by an Advocate.

Thus, the transfer or assignment of right, title and interest over the properly, no matter the character of transfer, entirely depends upon the Deed of Conveyance. Any ambiguity, inadvertent addition or deletion within the Deed could create to disputes. Therefore, to avoid any unsavory things care ought to be taken whereas drafting the property documents.

Possession of property

It is important that, the transferrer transfers possession of the property in favor of the Transferee. It’s not necessary that actual physical possession should be bimanual over to the Transferee, however even grant of ownership can transfer and make right and interest over the property in favor of the Transferee.

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