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

Mr. Gupta recently invested his life savings into what he believed was his dream villa in a gated community in Shantinagar, a prime locality in the city of Anandpur. He purchased the property from the first owner, Mr. Sharma, who was also a trusted friend. Believing in this friendship, Mr. Gupta made a critical error: he skipped the legal verification process. Mr. Sharma had originally bought the villa directly from the developer, a well-known company named ‘Apex Builders’.

The situation took a dreadful turn during a recent Annual General Meeting (AGM) of the residents’ association. It was revealed that Apex Builders had encroached upon government land to construct several villas, and Mr. Gupta’s new home was unfortunately one of them. It came to light that a few years prior, a social activist, Mr. Verma, had filed a Public Interest Litigation (PIL) against Apex Builders and the City Development Corporation (CDC) for this very encroachment.

The High Court had ordered a government survey, which confirmed extensive encroachment. However, Apex Builders engaged a senior counsel and managed to get the PIL dismissed. Mr. Verma then escalated the matter to the Supreme Court, but strangely, withdrew the case after a few hearings. The residents now suspect that the builder influenced the court outcomes and coerced the petitioner into withdrawing the case.

When Mr. Gupta confronted his friend, Mr. Sharma, he denied having any knowledge of the issue, a claim that seems dubious as most residents were aware of this long-standing problem. Approximately 20 villas are on the encroached land, yet neither the Resident Welfare Association (RWA) nor the other affected owners have taken any concrete legal action over the years. Mr. Gupta is now terrified that his house could be demolished, especially in light of recent anti-encroachment drives by the government.

Advice in such cases

Facing such a complex and distressing situation requires a calm and strategic approach. Here are the immediate steps you should consider:

• Gather All Documentation: Collect every piece of paper related to the property. This includes the sale deed, payment receipts, correspondence with the seller, property tax receipts, and any documents provided by the builder to the original owner.
• Conduct an Immediate Title Search: Hire an independent lawyer or a specialized agency to conduct a thorough legal verification and title search of the property. This will provide a clear report on the land’s history, survey numbers, and the extent of the encroachment.
• 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.
• Engage with the RWA: Speak with the office-bearers of the Resident Welfare Association and other affected homeowners. Collective action is often more effective and can help share the legal costs and efforts. Obtain a copy of the AGM minutes where the encroachment was discussed.

Applicable Sections of Law

Several legal provisions can be invoked in such a scenario, primarily focusing on fraud, cheating, and contractual breaches. Under the new Indian legal framework:

• Section 318 of the Bharatiya Nyaya Sanhita, 2023 (BNS): This section deals with cheating. If it can be proven that the seller, Mr. Sharma, knew about the encroachment and deliberately concealed this fact to induce you into buying the property, a criminal case for cheating can be filed against him.
• The Specific Relief Act, 1963: This civil law allows you to seek remedies like rescission of the contract (which would nullify the sale and require the seller to return your money) or sue for damages for the financial loss and mental agony caused.
• The Real Estate (Regulation and Development) Act, 2016 (RERA): You can file a complaint against the builder, ‘Apex Builders’, before the RERA authority for fraudulent practices, misrepresentation, and defects in the title of the land. RERA is empowered to order compensation.
• Sections 334 & 335 of the Bharatiya Nyaya Sanhita, 2023 (BNS): If any of the property documents provided by the seller or builder are found to be forged or fabricated, charges under these sections related to forgery can be pressed.

If you are the complainant

As the aggrieved party who has been defrauded, you are the complainant. Your course of action should be multi-pronged:

• File a Police Complaint: Approach the police and file a First Information Report (FIR) against the seller (Mr. Sharma) and potentially the builder (Apex Builders) under Section 318 of the BNS for cheating.
• Initiate Civil Proceedings: Concurrently, file a civil suit in the appropriate court seeking the cancellation of the sale deed and a full refund of the purchase amount along with interest and damages.
• File a RERA Complaint: Lodge a formal complaint against ‘Apex Builders’ with your state’s RERA authority, detailing the fraud and the defective title.
• 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

Realizing you are a victim of a massive property fraud can be overwhelming. It is crucial to act rationally and protect your interests:

• Secure Your Documents: Ensure all original documents related to the property are in your safe possession. Make multiple digital and physical copies.
• Document Everything: Keep a detailed record of all conversations, meetings, and correspondence with the seller, RWA, and other residents from this point forward.
• Avoid Unlawful Means: Do not attempt to resolve the issue through illegal means or by trying to bribe officials. This will only worsen your situation.
• 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 show reluctance to register an FIR, often mislabeling such cases as purely “civil disputes.” They may advise you to go to court directly. However, an experienced lawyer can draft a compelling complaint that clearly outlines the criminal elements of cheating and fraud, making it difficult for the police to refuse registration. Once an FIR is registered under the provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), the police are obligated to investigate. Their investigation will likely involve questioning the seller, the builder’s representatives, and officials from the City Development Corporation (CDC), as well as verifying the land records and survey reports.

FAQs people normally have

• Can I save my house from demolition? This is difficult. If the property is conclusively on government land, saving the structure is challenging. Legal remedies may focus more on getting compensation or an alternative property from the builder or seller. However, sometimes governments offer regularization schemes, which could be a potential, albeit uncertain, solution.
• Can I get my money back from my friend? Yes, you can take legal action against your friend (the seller) for hiding a material defect in the property’s title. You can sue for the cancellation of the sale and a full refund. The fact that he is a friend does not absolve him of his legal liability as a seller.
• Who is the main culprit, the seller or the builder? The primary fault lies with the builder, Apex Builders, who committed the original act of encroachment and fraud. However, the seller, Mr. Sharma, is also legally liable to you for not disclosing this critical information during the sale. You can pursue legal action against both.

What evidence is required?

To build a strong case, you will need to gather substantial evidence, including:

• The registered Sale Deed for your villa.
• Proof of payment (bank statements, transfer details).
• All communications with the seller (Mr. Sharma), such as emails, text messages, or chat logs.
• The government survey report confirming the encroachment.
• Documents related to the previous PIL, if obtainable.
• Minutes of the RWA’s AGM or any circulars discussing the issue.
• The independent legal scrutiny report that you will commission.

How long will the investigation take?

Property fraud cases are complex and time-consuming. The investigation and subsequent legal proceedings can take several months, and often years, to conclude. The timeline depends on factors like the cooperation of government departments in providing records, the complexity of the case, and the backlog in the judicial system. While the new Bharatiya Nagarik Suraksha Sanhita (BNSS) aims to expedite criminal procedures, practical delays are still common in such multi-layered investigations.

Advocate Sudhir Rao, Supreme Court of India