Categories
Property Law

How can you Resale Unregistered Apartment or Property in West Bengal and Kolkata through Tri-partite Agreements

Introduction:

In this article, we will discuss the unregistered apartment or property (Unregistered Deed), how we can register such deeds and also how we can transfer such property to a new buyer. We have found many cases where the owners of the flats or apartments don’t get their property registered on time and they face problems in the future regarding registering the property or to sale the property or for any other reason relating to their property. There are many provisions which restrict or bar the transfer or sale of the unregistered property but there is also a provision to transfer or sale the unregistered property in certain cases.

Provisions which restrict or bar the transfer or sale of unregistered property are as follows:

  1. Section 54 of the Transfer of Property Act, 1882 – This Section declares that the transfer of tangible immovable property of the value of 100 or more must be by way of the registered instrument. So, any tangible immovable property which has a value of 100 or more must be registered or we can say that it is compulsory to register immovable properties. This section should be read with Section 17 of the Registration Act, 1908.
  2. Section 17 of the Registration Act, 1908 – This Section Declares that all transactions which include the sale of immovable property for a value exceeding Rs 100 are to be registered. It is necessary to have a conveyance certificate or registered sale deed to sell the flat/property. It is hard to sell a flat/property without registering the same under the Registration Act, 1908 as the registered sale deed provides rights to inherit the property and transfers title to another person with evidentiary value.
  3. Section 17(1)(b) of the Registration Act, 1908 – This Section says that non-testamentary instrument which creates or declares any right or title or interest of the value of 100 or more in the immovable property then such property must be registered.
  4. Section 49 of the Registration Act, 1908 – This is also an important Section under Registration Act, 1908. This section declares that the effect of non-registration of documents required to be registered. This Section further says that the consequence of non-registration of a sale deed which is compulsorily registrable under Section 17 of the Indian Registration Act. This section states that no document that requires compulsory registration either under section 17 of the Registration Act or under any provision of the Transfer of Property Act, shall affect any immovable property comprised therein unless it has been registered.
  5. Rule 131(3) of the West Bengal Co-operative Society Rules 2011 – This Rule says that if any person or individual wants to sell his property (Flat or Apartment) then that person or individual must take permission or consent of the Society to transfer such property. This Rule should be read with Section 92 of the West Bengal Co-operative Societies Act, 2006.
  6. Section 92 (1) of the West Bengal Co-operative Societies Act, 2006 – This Section declares that any allotment including re-allotment of the plot of land or house or apartment is made by a Co-operative Housing Society to its members according to the bye-laws of the society then the member to whom the property is transferred or allotted is entitled to hold such property with such rights and interests which may be provided under prescribed conditions and according to the provisions of Sub-section (1) of Section 61 an instrument of transfer following the provisions of Transfer of Property Act, 1882 and the Registration Act, 1908 will be evidence in respect of the rights and interests in the immovable property.

Provision for transfer or sale of the unregistered property as follows:

  1. Tri-partite Agreement – This is an agreement made between three persons that are between the seller, buyer and builder or between Society, a Society member and buyer and so on. In this agreement, one party acts as a confirming party to the contract made between them. Normally, there are two parties in an agreement, but sometimes, under certain circumstances, the involvement of a third party that is indirectly related to the agreement may arise. This tri-partite agreement is made to avoid future conflicts which may arise due to different reasons. The main purpose of the tri-partite agreement is that the third party in these agreements acts as the confirming party. So, when a society, which is a registered one, is the third party to the agreement for buying and selling of flats then the third party has the power to confirm the transaction of the transfer of the property or in case of Apartment Association, the member, seller and builder can enter into a tri-partite agreement where a builder can act as a confirming party to transfer the property. So, we can conclude that if the parties enter a tri-partite agreement between them then they can transfer the Property.
  2. If anyone faces problems to register his property or his property is not registered and he wants to sell the property then such person can approach to the builder to make changes in the Builder-Buyer Agreement to transfer the property to a new buyer. The builder, in this case, levies some processing fees and deducts certain amounts and permits to register the property in the name of the new buyer.

Case Laws Analysis:

In Trailokya Nath &Ors vs Parikshit Das & Ors on 8 May 2014, the Gauhati High Court held that a sale deed which needs to be registered under Section 17 of the Registration Act, 1908 as well as under Section 54 of the Transfer of Property Act and it is not registered then it shall not affect the immovable property comprised therein and therefore, no title would be conferred thereby. It also cannot be received in evidence of any transaction affecting the property, and the court held that:

By proviso to the said Section use of such document for the collateral purpose only has been recognised. Payment of consideration or transfer of title is not a collateral purpose in the execution of a sale deed. In that view of the matter, the inevitable conclusion that can be drawn on Exhibit-Kha is that it did not involve payment of consideration and it could not affect the title of the property. Having so found all the 4 elements [(i) that a sale deed was executed by the plaintiffs in favour of the defendants; ii) that there was a realisation of valuable consideration from the defendants by the plaintiffs; iii) that the said sale deed was unregistered one and; iv) that the effect of the sale vide unregistered sale deed referred to above was not considered by the learned Court below] constituting the sole substantial question of law, in this case, are to be decided against the appellant thereby holding that the substantial question of law does not arise from the facts and circumstances in this case.”

In Sri Pradip Paul vs Smt. Ila Saha on 12 June 2020, the Tripura High Court held that under Section 49 of the Registration Act, 1908, unregistered sale deed can be received in evidence to prove the agreement between the parties but it will not create any contract to transfer the property.

Kamal Balasaheb Deshmukh vs Supriya Co-Op Housing Society … on 15 April 2011 State Consumer Disputes Redressal Commission In this case, the Appellant is a developer and builder and the appellant has taken a plot from CIDCO. There is a tri-partite agreement in respect of the plot given by the CIDCO i.e. between CIDCO, appellant and the original complainant-society.  Construction has been carried out and the possession has been delivered.  However, as per clause no.24 in the agreement conveyance was not affected.  Even to form a society and to convey the property in favour of the society is a statutory obligation of the builder and developer being promoter under the Maharashtra Ownership of Flats Act 1963.  Since the said obligation was not discharged, the proposed society filed a complaint bearing no.200/09 and it was decided on 08/10/2010 and the appellant has been directed to execute the Conveyance deed in respect of the land in favour of the society by constituting the said society. The District Consumer Forum has also directed to pay the cost of 5000/-. Even though society has claimed damages, District Consumer Forum has not granted damages.  It is further directed that the amount shall be paid within 60 days otherwise there will be interest at 10% p.a. till the realization of the amount. This order of the District Consumer Forum is challenged.

Conclusion:

This article will give you a clear knowledge about unregistered deeds and other information related to it. We have also mentioned all the necessary provisions which are given under different Acts related to the unregistered deed and transfer of the unregistered deed to another person or individual. One can transfer the property based on a tri-partite agreement where one party acts as a confirming party to the agreement but it must be remembered that to transfer the property, we must always register the property with the Registrar of our local jurisdiction because a registered sale deed transfers all the rights and interests of the property to the concerned person and there will be no question of any disputes arising from the property in the near future. So, we hope that this article will serve its purpose to a great extent.

Leave a Reply