Chapter X: Loss of Property Documents

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By Advocate S. R. Agarwal

One is expected to exercise due care in the preservation of his/her property documents, as these are the only proof of the ownership of the property. As and when a property transaction takes place by way of transfer or assignment of the rights, title and interest therein, all the previous documents from the very root are passed on, in original, to the transferee, as per the well-established practice in such type of transactions. Not only for the transfer or assignment, as said, when financial assistance is required from the banks or a housing finance company, hereinafter referred as the ‘financial institution’, all the property documents in original are required to be submitted as a condition precedent, in-as-much as security is created in favour of the financial institution by way of deposit of title deeds, popularly known as equitable mortgage, as it is less expensive and time-consuming, as against the creation of the security by way of registered mortgage.

In terms of Section 58 (f) of the Transfer of the Property Act, mortgage by deposit of title deeds (equitable) is created when a person delivers his title deeds to a creditor with the intention to create a security thereon at a notified town. Thus as per the said provision, such mortgage is created by merely delivering any or more title deeds of the same property. Therefore, it is a well established practice in vogue that all the original title deeds relating to the same property right from the root are deposited in original with the creditor to rule out the possibility to any earlier charge or encumbrance on the property on the basis of any one or more original documents, because such charge cannot be known from the search of the records of the office of the Sub-Registrar, as the same is not required to be registered, except in the State of Tamilnadu, where a Memorandum of Deposit of the Title Deeds has, recently, been made compulsorily registerable.

Some time certified true copies of the documents, which are not available in original, are submitted under the belief of these copies being the original, which is a misconception in the sense that a certified true copy of a document can not be taken or deemed by any stretch of the imagination as the original. A person may obtain as many as certified true copies from the office of the Sub- Registrar, as he may desire, and the possibility of an earlier charge or encumbrance on the basis of the originals of such certified true copies may not be ruled out.

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