Kabja Property Opinion:
- There is only transfer of interest in the property, and not transfer of
title of the Property.
- The transfer of interest is being carried by way of unregistered
agreement/deed between the parties on Rs. 100/- non judicial stamp paper,
and the same is being notarised with the public notary.
- No registered sale deed/conveyance deed is being executed between the
parties for transfer of rights and title of the property.
Now, That the Apex Court of India has clearly pronounced in Suraj Lamps &
Industries Pvt. Ltd. v State of Haryana
that immovable property can be
lawfully transferred/conveyed only by a registered deed of conveyance. Where the
deed is not registered, there is no transfer, and property does not pass.
Mere delivery of the deed will not operate as delivery of the property, nor in
the recital in the sale deed of delivery of possession suffice, for such a
recital might be inserted without any attempt at fulfilment. However, if the
unregistered deed of value less than Rs. 100/- is accompanied by delivery of the
property, the sale would be effective by virtue of delivery of possession, and
would not be rendered nugatory by the unregistered deed.
Kabja property would not create a valid mortgage (whether equitable or
registered), and we cannot securitized/invoked, in case of default by the
Borrower/Security Provider. If this will be the only security from the Borrower
for the loan facility, then such loan facility shall be treated as unsecured