Supreme Court Ruling Warns Homebuyers: Registration Is Not Ownership

CA Ramesh Agrawal

The Supreme Court in a significant ruling has stated that only registering a property does not make someone its legal owner. The judgement, delivered in the Mahnoor Fatima Imran vs M/s Visweswara Infrastructure Private Limited case, has direct implications for millions of Indian homebuyers and investors. If someone has bought a property solely based on a registered sale deed, then have a look at the below points.

 Understanding the Law: Registration Does Not Equal Ownership

“Ownership of a property comprises several aspects, of which registration is only one,” says Mr. Harsh Parikh, partner at a Law Firm, Khaitan & Co. Under Indian law, properties above Rs. 100 require registration, but that’s not all. “A buyer must also prove full payment, possession, and custody of original title documents,” he explains.

Chairman and Director of Prime Developments, Mr. Rakesh Malhotra stated that “Registration provides prima facie evidence of a transaction, but it doesn’t confer valid ownership if the transferor lacked the legal right to sell”.

 Circumstances Under Which Registered Property Transactions May Be Invalid

Registered Sale even can be set aside by courts in several scenarios: -

“If the buyer hasn’t fully paid, or fraud, coercion, or impersonation is involved,” says Harsh Parikh.

“If the seller is a minor, mentally incompetent, or doesn’t legally own the property,” adds Rakesh Malhotra.

 Aman Sharma, MD of Aarize Group, notes that lack of government approvals, like change of land use, can also render a sale invalid.

 In summary, a Registered Document doesn’t protect a buyer from a flawed transaction.

 How to Verify the Property Title in Correct Way: - Experts say that one should always do these checks before buying the property.

• Examine the full chain / History for Tittle of property for at Least 30 years
• Check & make sure that property is clear from all encumbrance and mutation records are updated.
• Ensure there is no pending litigation or Tax Dues.
• Issue a Public Notice to invite claims for the Property.
• Verify the Zoning Permissions and consult a Property Lawyer.

“Simply holding a registered deed is not enough. You must confirm that the seller actually owns what they’re selling,” states Malhotra.

 The Supreme Court’s Message: Buyer Beware

The ruling underscores a long-standing principle, i.e., caveat emptor, or “buyer beware.”

“The court has clarified that title flows from lawful ownership, not just paperwork,” says Sharma. If the Registered Deed is based on fraud or defective title, then then buyers can face eviction, lose money, or can get end up in court fights leading to various problems.

For people buying property in India, the message is very clear, just because a property is registered does not mean it is fully legal or safe to buy. One should do his homework i.e., get help of Expert, check all the details, verify ownership details