If you are stuck in such a situation, here is what to do.

Mr. Ajay Sharma recently purchased a flat in a developing area of Vikasnagar in early 2024. He secured a home loan from Secure Trust Bank to finance the purchase of his flat, designated as Flat No. 101. He took possession and has been living there with his family for nearly a year. However, his peace was shattered when representatives from Apex Financial Bank arrived at his doorstep with a notice under the SARFAESI Act, intending to seize the property.

Upon investigation, a shocking reality emerged. The same flat had been sold to another individual, Mr. Rohan Verma, back in 2021, but with a slightly different door number, Flat No. 101-A. Mr. Verma had also taken a loan from Apex Financial Bank. Due to construction delays and the pandemic, he was never given possession. When Mr. Verma defaulted on his loan payments, Apex Financial Bank initiated recovery proceedings, leading them to Mr. Sharma’s home. It was discovered that two separate registrations existed for the same physical property. The property is under the jurisdiction of a local municipal authority and lacks official occupancy or completion certificates, and a permanent electricity meter is yet to be installed, complicating the matter further.

Advice in such cases

Navigating such a complex property fraud requires a strategic and immediate legal response. Here are the steps you should consider:

• Gather all your documents, including your sale deed, loan agreement, payment receipts, and any correspondence with the seller or builder.
• Immediately file a police complaint (FIR) against the seller for cheating, forgery, and criminal breach of trust.
• File a civil suit in the appropriate court seeking a ‘declaration of title’ in your favour and a ‘permanent injunction’ to prevent anyone, including the other bank, from dispossessing you.
• If a bank has initiated action under the SARFAESI Act, you must challenge their notice before the Debt Recovery Tribunal (DRT).
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think

Applicable Sections of Law

This situation involves aspects of both criminal and civil law. The primary legal provisions that apply are:

• Bharatiya Nyaya Sanhita, 2023 (BNS): Sections pertaining to cheating (Section 318), forgery for the purpose of cheating (Section 334), and using a forged document as genuine (Section 335) are applicable against the fraudulent seller.
• Transfer of Property Act, 1882: The principles of this act will be crucial in determining who has the rightful title. Your possession of the property gives you a significant advantage.
• Specific Relief Act, 1963: This act allows you to file a suit for a declaration of your ownership rights and an injunction to protect your possession.
• Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002: The action taken by Apex Financial Bank falls under this act. Any challenge to this action must be made before the Debt Recovery Tribunal (DRT), not a civil court.

If you are the complainant

As the person who has been defrauded, you are the complainant in the criminal case. Your role would be to:

• Lodge a First Information Report (FIR) with the police, clearly stating all the facts and naming the seller/builder.
• Provide the police with copies of all your property documents, the fraudulent documents of the other party (if you can access them), and details of the bank notices.
• Cooperate fully with the police during the investigation and follow up on the progress of the case.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think

If you are the victim

As the victim in possession of the property, your primary goal is to protect your home and investment. Your actions should be swift and decisive:

• Your first priority is to secure your possession. File a suit for a permanent injunction to prevent the bank or any other party from evicting you.
• Simultaneously, file a criminal complaint against the seller to initiate criminal proceedings.
• Engage a lawyer to file a formal objection and application before the Debt Recovery Tribunal (DRT) against the SARFAESI proceedings started by the other bank, proving you are a bona fide purchaser in possession.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think

How the police behave in such cases

Initially, the police might view the matter as a civil dispute and may be hesitant to file an FIR. However, you must insist that the elements of cheating and forgery are clearly present, which makes it a criminal case. Once an FIR is registered under the relevant sections of the Bharatiya Nyaya Sanhita (BNS), the police are obligated to investigate. They will summon the seller for questioning, verify the documents from the Sub-Registrar’s office, and collect evidence to file a chargesheet against the accused.

FAQs people normally have

Who has the stronger claim to the property?
Generally, the person who is a bona fide purchaser and is in actual physical possession of the property has a stronger claim. The fact that you are living in the flat and have been doing so for a while works in your favour.

Can the second bank seize my property even if I am paying my loan regularly?
The second bank cannot arbitrarily seize your property. They must follow the due process of law. You have the right to challenge their action in the Debt Recovery Tribunal (DRT) by proving that you are the legitimate owner in possession and that their claim is against a property fraudulently sold to their loanee.

What is the role of the Sub-Registrar’s office in this fraud?
The Sub-Registrar’s office is responsible for registering property sale deeds. A double registration points to a serious lapse or potential collusion at the Sub-Registrar’s office, which should be a key part of the police investigation.

What evidence is required?

To build a strong case, you will need to gather the following evidence:

• Your original registered Sale Deed.
• The loan sanction letter and agreement with your bank.
• Receipts for stamp duty and registration fee payments.
• Any bills (electricity, water, maintenance) and property tax receipts in your name, which act as proof of possession.
• A copy of the other party’s sale deed, if possible, which can be obtained through an application for a certified copy at the Sub-Registrar’s office.
• The notice received from the other bank under the SARFAESI Act.

How long will the investigation take?

The legal process can be lengthy. A police investigation and the subsequent criminal trial can take several years. Similarly, a civil suit for declaration of title is a time-consuming process. However, the most critical step is to obtain an interim injunction or a stay order from the court or DRT quickly. This initial relief, which can often be secured within a few weeks or months, will protect your possession while the main case proceeds, preventing any immediate threat of eviction.

Advocate Sudhir Rao, Supreme Court of India