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No flats despite full payment
The Navhind Times
Are you buying property in Goa? Doing so without acquiring the title
certificate and the nil-encumbrance certificate on the property would cost you
dearly. This has happened to about 24 persons who paid a builder an average of
Rs four lakh each and bought flats in Diyana Holiday Homes at Umtavaddo,
Calangute. The builder even gave them physical possession of the flats but
subsequently, the Economic Development Corporation Limited (EDC) attached the
property and in a recent newspaper advertisement, has announced it will
auction on September 7. The builder had mortgaged the property to the EDC to
avail of a loan of Rs 65 lakh before he sold the flats to the unsuspecting
buyers. He took their money but concealed the fact that the property they were
buying was mortgaged.
According to Mr Benedict Nazareth, a Mapusa-based lawyer for four of the
flat-owners in Diyana Holiday Homes, the buyers should have obtained the
title certificate and the nil-encumbrance certificate on the property before
they paid the builder. Every person who buys immovable property has to
ensure that the property title is clear and marketable. The title
certificate is issued by any lawyer who will conduct the necessary
investigations and issue it, Mr Nazareth said. Secondly, they should have
also obtained a nil-encumbrance certificate from the office of the
sub-registrar. The moment a mortgage is registered, the same is reflected in
the encumbrance register maintained by the sub-registrar. Had the buyers
approached the sub-registrar, they could easily have found out that Diyana
Holiday Homes was mortgaged.
Mr Nazareth has published an advertisement in the newspapers to inform
members of the public that his clients are owners, in physical possession of
the flats in Diyana holiday homes and to warn prospective buyers not to buy
the flats at the planned auction. Doing so would be at their own risk, he
says.
One of the duped buyers, Mr Martin DMello, through his power-of-attorney,
has lodged a complaint of cheating and misappropriation of funds against the
builder with the Calangute police.
In his complaint, he states that the agreement of sale for the flat was
executed in September 1995. The payments were then made and he was given
physical possession of the flat in February 1999. Repeated requests to the
builder to execute the conveyance deed was ignored by the builder. Mr D
Mellos power-of-attorney was shocked to read in the newspaper dated August
14, 2004, an advertisement by the EDC that Diyana Holiday Homes were to be
auctioned at 3 p.m. on September 7. He was even more shocked to learn that
the builder had mortgaged the property to EDC in February 1995, a full seven
months prior to executing the agreement of sale.
In his complaint, Mr DMello states that the builder dishonestly concealed
the fact that the property was mortgaged and if he had been told the truth,
he would not have parted with his hard-earned money.
Mr Nazareth said, the builders intent was clearly to cheat. Otherwise, he
would not have taken a mortgage before the sale of agreement and concealed
the fact of the mortgage. He affirms that concealing the mortgage and
inducing a person to part with his money amounts to cheating in the sense of
Section 420 of the Indian Penal Code. But the Calangute police are still
studying whether this constitutes an offence of cheating and have not yet
registered the case.
But Mr Nazareth also says this is a breach of a contractual obligation which
leads to civil liability and one has to sue the offending person under the
Specific Relief Act to enforce the contract. Unfortunately, most of the
duped owners of flats in Diyana are based in Mumbai and fighting legal
battles in Goa are very cumbersome for them.
Mr Nazareth says the only solution to this imbroglio could be an intricate
legal tri-partite agreement between the EDC, the duped owners and new buyers
of the flats, through which he hopes to safeguard his clients interests.
One may notice that the builder has not been mentioned in this possible
solution. With laws as they are, it is feared that he may go off scot-free.
Says Mr Nazareth, the law says Buyers beware! take precautions or else,
you may be crying in vain before police and lawyers and courts while the
builder laughs all the way to the bank with your money.
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