LEGAL CHAT
A bad purchase can put one in a spot
R.L. NARAYANAN
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With frequent reports of fraudulent transactions one has to be on guard while buying a property
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Photo: Vipin Chandran
Give it a good look: There is a variety in fraudulent dealings of late. Scrutinise the papers well.
There has been a spate of newspaper reports, recently regarding fraudulent transactions. These reports are to the effect that several persons are systematically indulging in forgery, fraud, making of false documents, duping banks, purchasers, etc. Often, there is also an inside hand, helping the persons. In the wake of many types of attempts and incidents of fraud, forgery and the like, it is better to have a broad idea of things which can go wrong.
You may purchase a property considering various options. Whatever be your level in life, a bad purchase can make an adverse impact. Hence, you have to exercise caution in your dealings with properties.
As with many things, there is a great variety which is employed in fraudulent dealings. The authorities like Police and Courts are very stern and effective in dealing with such transactions. However, in almost every case, you approach the Police or the Court after you have been a victim. Being victimised by itself is very agonizing and may have caused considerable damage in spite of relief that may be forthcoming. As such, a cautious approach will go a long way in a possible avoidance of being victimised. For this purpose, you have to be aware as to where the pitfalls are.
Recently, there are instances where these types of fraud and forgery are being committed in a brazen manner. The fraudster often displays a sign of affluence. He or she would be a glib talker. Their schedules will be very tight. Their time will be full of constraints. Their style of dressing and mode of conveyance will be impressive. They will give a picture as if they are well connected.
They will have a very laudatory web site. They will slip names and give details of transactions. It is also possible that they will take you to big and reputed offices of advocates, Chartered Accountants, Management Consultants, Real Estate dealers, Real Estate Consultants, Multinational Banks, etc. Most of these purported transactions are very big and may involve big money or funding. As several systems like that of advocates, Chartered Accountants and other professionals work on trust and fee becomes payable over a period of time, the mere production of any opinion or certificate or letter or document from such institutions or offices are not to be taken as a serious measure for payment of money from your end. In other words, if ultimately there is lot of talk and consistent demand of payment alone without performance, grounds are made out for a cautious dealing from your end. It is better to check out everything. It is better to ask and check with the person to whom payments are supposed to be made if such identity is disclosed.
Time-tested systems
It is unfortunate that some of these persons employing fraud, forgery, etc will also use time-tested systems to their advantage. Thus, money may be demanded for obtaining opinions, providing documents, supposed kick backs, etc, when their only intention is to pocket the money by employing novel methods. The trap may also be laid in many ways. Be aware that in the first place, it is possible that the property or the properties that the person may offer to purchase or procure may not exist at all. It is also possible that such property or properties may exist but one or more documents may be forged.
Typical types of fraudulent transactions or forgery may involve a number of documents, which do not require registration. This could be a purported Court order passed before a substantial period of time. Purported rights may arise based on such a document which is forged and may involve creation of subsequent documents in an intelligent manner to make it appear as if things are in order. In certain cases, the documents may not involve any forgery, but may involve certain orders, which are obtained by suppression of true facts and circumstances, which may never be brought to the notice of the Court. Documents like Will, Patta, Chitta and Adangal Extracts, Memorandum recording oral partitions, declarations, Affidavits, Death Certificates, Legal Heirship Certificates, sketches, plans, approvals, permits, permissions, licenses, etc which are not registered with the office of the Registrar of Assurances, are some of the documents which are usually forged. The fact that these are not registered documents makes it difficult to detect the forgery or fraud. Certain documents like Power of Attorney and also a Will can be easily registered. The simplicity of the registration procedure and the nominal stamp duty and registration charges payable are also taken advantage in making false documents.
Nowadays, Settlement Deeds, Release Deeds, Mortgage Deeds, Receipts, Powers evidencing certain payments and other documents can also be registered at a reasonable cost. These costs are incurred by those making false documents to give weightage to the documents in question.
Encumbrance certificate
Encumbrance Certificate is a very critical document. Often, forgery involves omission of genuine transactions rather than making a false entry. In other words, it will not disclose any encumbrance regarding the property and all other documents will be of a nature that may induce you to opt for the purchase or acquisition. One has to be very careful on this aspect.
At times, a small change is introduced or made in the description or location or the extent of the property. All other documents may be correct. These matters are also likely to land one in trouble. Certain matters may involve the forging of substantial number of documents with one or two genuine transactions involving certain innocent persons as a result of which forgery or fraud may be perpetrated.
The person involved in fraud or forgery may also attempt this at many levels including banks that will involve obtaining loan on the basis of false documents or inducing a purchaser to take a loan for purchase of a property, which may involve such false or fraudulent documents. In most cases, on hind sight, it can be seen as to where or how the fraud has been committed. However, when one is involved in a contemporaneous situation, this may not come to light at all as there may not be any room for suspicion. Also, the participation of an inside hand cannot be ruled out.
Persons who plan the making of false documents are aware of the systems at various points. They get in touch with persons involved in the systems and may exploit such persons for their personal ends by offering inducements, payments and other benefits. As a result of this, at times, the system is breached more on the basis of confidence and trust than otherwise.
The persons who are employing fraud or forgery are also aware of the powers of colour photocopying systems, communication by emails, posting of web sites and are adept in usage of computers, software, etc. They handle technology with ease. However, in critical matters, they do not put their signature. They remain in the background. The author is partner, RANK Associates & Advocates, Chennai.
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