Tir Master Circular

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e-Circular CREDIT POLICY AND PROCEDURES DEPARTMENT Sl. No. : 41/2013 - 14 Circular No. : CCO/CPPD-ADV/5/2013 - 14 Saturday, April 13, 2013. .

The Chief General Manager State Bank of India LHO/MCG/CAG

CPP/SGS/Cir/5 12/04/2013

Madam/Dear Sir, MASTER CIRCULAR ON TITLE INVESTIGATION REPORT (TIR) Background Law Department had issued Circular No.LAW/Cir/10 dated 29/03/2004 detailing the

process of verification of title deeds by the Advocates. Subsequent to that a number of

guidelines have been issued in this regard on various related issues from time to time.

2. Recently it has been observed that the frauds in the area related to Title Deeds are

on the rise. In view of the above, a need was felt to issue a Master Circular on TIR.

3. In supersession of existing guidelines in respect of investigation of title of immovable

properties for the purpose of creation of mortgages in favour of Bank, these instructions

are issued for the uniform application to all branches/ business units across the country

in respect of all segments.

4. Title investigation is to be conducted in respect of all types of immovable properties

that are to be accepted as mortgage security. Title investigation has the following

aspects:

i. Getting the documents of title in respect of the property examined by a panel

advocate;

ii. Scrutiny of the TIR report issued by the Advocate by the Bank’s dealing officials

to decide the acceptability of the advocate’s report; and

iii. Physical verification of the property to ensure the factual correctness of the

statements in the document/ reports.

5. Branches have to collect all details of the property including all the title documents

from the customer under proper acknowledgment and forward to the panel advocate

from whom it has been decided to obtain the Tile investigation Report (TIR).

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TIR to be obtained only from the panel advocates identified for submission of

such reports.

Branches to correspond directly with the panel advocate and the direct

correspondence between the advocate and the borrower/ mortgagor is to be

avoided.

Advocate has to submit the TIR in the prescribed format.

6. In respect of all cases where the loan amount is more than Rs.1.00 crore, the

advocate has to make search of the title of the property for not less than 30 years

irrespective of the fact that clear and marketable title is established by a shorter search

of 13 years.

7. Irrespective of the segment, in case of all loans of Rs.1.00 crore and above,

satisfactory TIR from two different panel advocates should be obtained separately.

8. In addition to the TIR by the advocates, the branches/business units have to search

the database of CERSAI (Central Registry) and CIBIL Mortgage Check to ascertain the

existing charges and credit history of the borrower/ mortgagor. The results of such

searches are to be scrutinised as part of due diligence to rule out any doubtful

circumstances in respect of the genuineness of the security offered. Further, a copy of

screen shot of search report/ search report of CERSAI and CIBIL Mortgage Check to

be attached with the loan proposal and subsequently preserved with the security

documents.

9.The format of the letter in which the panel advocate is to be requested for submission

of TIR is given in Annexure A. The details of the Property offered as security is to be

prepared by the Branch as per Annexure-A1.The checklist cum format for the

preparation of the TIR by Advocate is given in Annexure B. Along with the report as per

Annexure B, panel advocate has to submit a certificate on title as per Annexure C.

10. In case of take over loans from other banks/financial institutions, if the original title

documents are not available for scrutiny/verification by the advocate branches may

obtain an interim certificate as per Annexure C1 along with Annexure B. However, in

all such cases, after takeover of the loan is completed and original title documents are

received from such other Banks/ Financial Institutions, Advocate has to complete the

scrutiny/ verification of original title documents and to submit the certificate of title as per

Annexure C.

11. A Guidance Note for the Advocates entrusted with the work of issuing TIR for

verifying the genuineness of the documents is given in Annexure D, which can be

made use by the branch/bank officials also. Each Circle may issue necessary additional

instructions after examining the practice followed in the State(s) and if necessary by

getting an opinion from an Advocate specialized in this area for guidance of the Panel

Advocates in the respective Circles.

12.Verification of the TIR obtained from the panel advocate by the branch/ operating

officials is also important to determine the acceptability of property offered as security. A

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thorough and meticulous scrutiny of TIR will help not only in understanding the nature of

title of the property but also in averting any chances of fraud. A detailed checklist for

scrutiny of TIR is enclosed as Annexure E and the Branch/Business Unit has to verify the TIR on the lines of the said Annexure. 13.Identification of the property by physical verification of the same is crucial. This

needs to be done at the time of accepting the security and cannot be postponed till to

the possible event of enforcement of security on a future date. A checklist for the

identification and physical verification of the properties offered as securities is enclosed

as Annexure F.

14.Certain important aspects relating to procedures, precautions and due diligence for

prevention of frauds, etc., in connection with the title investigation/creation of mortgage

are covered in Annexure G. 15. Panel Advocates have an important role not only in advising the legal validity of the

title of the property in question but also to guide the branches in detecting the fraudulent

attempt by any unscrupulous persons. Advocate has to make an actual and personal

inspection of relevant books and indexes maintained/kept in the office(s) of sub-

registrar, office of registrar and other relevant offices wherever applicable. The search

should cover all the sub-registrar/ registrar offices wherein the title documents are

registered as well as such offices where such registration is legally possible. Advocate

has to obtain certificates of encumbrance (EC) from the relevant offices (wherever such

facility is available) to ensure that there are no subsisting charges/encumbrance on the

property offered as security. Advocate is also required to obtain the certified copies of

all the relevant title documents directly from the office of the concerned sub-registrar/

registrar office and compare the same with the documents submitted by the customer.

They have to attach along with the Report(TIR) all such certified copies and the receipt

for fees paid for obtaining certified copies.

16. At no circumstances, the Advocate should submit a Title Investigation Report (TIR)

certifying clear and marketable title of the property with conditions or stipulations to be

complied. Further, the TIR along with all the original documents and certified copies of

documents are to be submitted directly to the Branch/BU concerned and in no

circumstances the same to be handed over to the borrower/guarantor or his/their

agent/representative.

17. The work of TIR needs to be entrusted to those panel advocates who have the

competency and expertise in doing proper title investigation as above. Wherever

possible, legal firms having such facilities and expertise may be considered for

empanelling to Bank’s panel of advocates for conducting TIR.

18. A separate annexure about the panel advocates to be entrusted with TIR work is

given as Annexure H. A copy of MOU to be obtained from the panel advocates who are

entrusted with the work of issuing TIR is given as Annexure H-1.

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19. Please arrange to bring the contents of the circular to the notice of operating units /

branches under your control. Kindly note that for any clarifications in this regard Law

Department may be contacted directly.

Rationale:- To consolidate, modify and update the instructions in respect of obtention of Title Investigation Report (TIR) for creation of mortgage.

Yours faithfully

Sd/- for Deputy Managing Director & Chief Credit and Risk Officer

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List of Annexures Annexure Details Annexure A Letter to the panel Advocate for search and

verification of title deeds/documents. (To be prepared by the Branch).

Annexure A-1 Details of the property offered as the security (To be prepared by the Branch).

Annexure B Report of Investigation of Title in respect of immovable Property. ( To be submitted by the panel Advocate).

Annexure C Certificate on title to be submitted by the panel Advocate.

Annexure C1 Interim certificate to be submitted by panel Advocate in respect of takeover loans.

Annexure D Guidance Note for the Advocate verifying the Genuineness of Title Documents.

Annexure E Checklist on scrutiny of TIR by the branches/ operating units. (To be prepared by the Branch).

Annexure F Checklist on identification and physical verification of the property. (To be prepared by the Branch).

Annexure G Procedure, precautions and due-diligence.

Annexure H Review of Panel Advocates.

Annexure H-1 Memorandum of Understanding with Panel Advocate.

Annexure I List of earlier circulars covered in this Master Circular.

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Annexure – A: Letter to advocate for search and verification of title deeds/documents

Dear Sir/ Madam,

You are requested to make an investigation of title to the properties more fully described

in the Schedule A-1 below, to enable us to obtain a valid and enforceable mortgage of

the said property(ies). Annexure ‘B’ enclosed herein is the format for the preparation

of the title investigation report. Please note that the items sought in Annexure ‘B’ are

required to be filled up by you with full details. While the items mentioned in Annexure

‘B’ are illustrative for making an effective search, we expect you to make an exhaustive

and complete search of the title of the property.

2. Please know that the responsibility of making search of the records required for the

purpose at various Govt./ registering authority/ revenue offices/ Company Registrar etc.

is entirely on you and you shall be liable for any loss caused to the bank due to

negligent search on your part or on the part of the agent/authorised representative

engaged by you for this purpose.

3. Please note that you have to make an actual and personal inspection of relevant

books and indexes maintained/kept in the office(s) of sub-registrar, office of registrar

and other relevant offices wherever applicable. The search should cover all the sub-

registrar/ registrar offices wherein the title documents are registered as well as such

offices where such registration is legally possible.

4. Please also note to obtain certificates of encumbrance (EC) from the relevant offices

(wherever such facility is available) to ensure that there are no subsisting

charges/encumbrance on the property offered as security.

5. Please do not hesitate to demand any document/record/material required by you for

the purpose of making proper investigation into the title to the property of the mortgagor.

6. The search for title/encumbrances is normally required to be made for a period of 30

years. If this is not possible for unavoidable reasons, please note that the search

should be atleast for 13 years, provided you are entirely satisfied that the 13 years

search would be sufficient in the particular facts and circumstances of the matter in

hand. If you are not fully satisfied regarding the title to the property by making an

investigation/search for a period of 13 years only, you should invariably ask for

records, documents, as you feel necessary and should verify those also for conducting

an effective search. However, in respect of security offered for loans of Rs.1.00 crore

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and above, search for title/ encumbrances for a period of not less than 30 years is

mandatory.

7. Please note that you are required to verify the original title deeds only, particularly,

title deeds which are the subject matter of the mortgage. If the original title

deeds/documents are not available and certified extracts are produced, kindly examine

whether that should be sufficient for creation of a valid and enforceable mortgage and

state what precautions are to be taken for the purpose.

8.You are also required to obtain the certified copies of all the relevant title documents

directly from the office of the concerned sub-registrar/ registrar office and compare the

same with the documents submitted by the customer. Please also attach all such

certified copies along with your Report along with the receipt for fees paid for obtaining

certified copies.

9. In case of agricultural lands offered as security, please specify as to whether there

are any restrictions under the local laws for creation and enforceability of the mortgage

of agricultural lands.

10. In case of Lending by Consortium members/Multiple Lenders and/ or extension of

mortgages, priority of charges existing in favour of other charge holders, intervening

charges created if any will have to be verified in detail, and please advise the Bank as to

the restrictions/ limitations/ impediments, and remedial measures if any.

11. Please advise about all legal formalities/procedures required under laws to be

complied with for valid creation of mortgage in favour of the Bank. If there are any legal

impediments/restrictions, kindly advise as to whether such impediments can be cured

and if so, what procedure is to be followed.

12. Please note that at no circumstances, you should submit a title investigation report

(TIR) certifying clear and marketable title of the property with conditions or stipulations

to be complied.

13. Please sign the duplicate of this letter acknowledging the receipt of the documents

detailed in the Schedule A-1 and acceptance of the aforesaid stipulations under which

you will be providing the required search report and certificate. The format of the TIR

and Certificate on Title to be given as per Bank’s standard format, i.e. Annexure ‘B’ and

Annexure ‘C’.

14. The TIR along with all the original documents and certified copies of documents are

to be submitted directly to the Branch/BU concerned and in no circumstances the same

to be handed over to the borrower/guarantor or his/their agent/representative.

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15. Please acknowledge receipt.

Yours faithfully,

Signature

Name

Designation

Branch/Unit

Contact details

:

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Annexure-A1: Details of the property offered as the security (To be prepared by the branch)

a)Name & Constitution of the Borrower 1.

b)Whether the loan proposal is for Rs. 1.00

crore and above? (Search for not less than 30

years is mandatory in such cases.)

2. Name and constitution of the intended

mortgagor

3. Relationship between intended mortgagor and

borrower (Please specify whether the intended

mortgagor and borrower are one and the same

or related as guarantor, co-borrower, power of

attorney, etc.)

4. Description of property/ properties

4.1 Survey / Door No.

4.2 Extent

4.3 Location

Boundaries

East West South North

4.4

List of documents delivered to Advocate for

verification (specify original/certified extracts/

copies, etc.)

Sl.

No

Date Name/ Nature of the

Document

Original/

certified

copy/

certified

extract/

photocopy,

etc.

In case of

copies,

whether the

original was

scrutinized

by the

Branch.

5.

6. Location Details

6.1 Complete postal Address of the property/

properties.

6.2 Prominent landmark

6.3 Bus route

6.4 Bus stop

7. Rough location sketch

7.1 Approach sketch to the location

7.2 Exact location of construction/ purchase and

working plan

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8. Please mention details about the builder (if

applicable)

8.1 Name of the Firm

8.2 Address of the Firm

8.3 Telephone No.

8.4 Contact person

8.5 Is the builder/ project in the Bank’s latest approved list. Mention the date of approval of the builder and validity of the current approval.

Yours faithfully,

Signature

Name

Designation

Branch/Unit

Contact details

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Annexure – B: Report of Investigation of Title in respect of immovable Property (All columns/items are to be completed/commented by the panel advocate)

a)Name of the Branch/ Business Unit/Office seeking opinion.

b)Reference No. and date of the letter under the cover of which

the documents tendered for scrutiny are forwarded.

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c)Name of the Borrower.

a)Name of the unit/concern/ company/person offering the

property/ (ies) as security.

b)Constitution of the unit/concern/ person/body/authority offering

the property for creation of charge.

2.

c)State as to under what capacity is security offered (whether as

joint applicant or borrower or as guarantor, etc.)

Complete or full description of the immovable property/

(ies) offered as security including the following details.

(a) Survey No.

(b) Door/House no. ( in case of house property)

(c) Extent/ area including plinth/ built up area in case of

house property

3.

(d) Locations like name of the place, village, city, registration,

sub-district etc. Boundaries.

a)Particulars of the documents scrutinized-serially and

chronologically.

(a) Nature of documents verified and as to whether they are

originals or certified copies or registration extracts duly certified.

Note : Only originals or certified extracts from the

registering/land/ revenue/ other authorities be examined.

Sl.

No.

Date

Name/ Nature of

the Document

Original/

certified copy/

certified extract/

photocopy, etc.

In case of

copies,

whether the

original was

scrutinized

by the

Advocate.

4.

5. Whether certified copy of all title documents are obtained from

the relevant sub-registrar office and compared with the

documents made available by the proposed mortgagor? (Please

also enclose all such certified copies and relevant fee receipts

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along with the TIR.)

a)Whether the records of registrar office or revenue authorities

relevant to the property in question are available for verification

through any online portal or computer system?

b)If such online/computer records are available, whether any

verification or cross checking are made and the comments/

findings in this regard.

6.

c)Whether the genuineness of the stamp paper is possible to be

got verified from any online portal and if so whether such

verification was made?

a)Property offered as security falls within the jurisdiction of which

sub-registrar office?

b)Whether it is possible to have registration of documents in

respect of the property in question, at more than one office of

sub-registrar/ district registrar/ registrar- general. If so, please

name all such offices?

c)Whether search has been made at all the offices named at (b)

above?

7.

d)Whether the searches in the offices of registering authorities

or any other records reveal registration of multiple title

documents in respect of the property in question?

8. Chain of title tracing the title from the oldest title deed to

the latest title deed establishing title of the property in

question from the predecessors in title/interest to the

current title holder. And wherever Minor’s interest or

other clog on title is involved, search should be made for

a further period, depending on the need for clearance of

such clog on the Title.

In case of property offered as security for loans of Rs.1.00 crore and above, search of title/ encumbrances for a period of not less than 30 years is mandatory.(Separate Sheets may be used)

9. Nature of Title of the intended Mortgagor over the Property

(whether full ownership rights, Leasehold Rights,

Occupancy/ Possessory Rights or Inam Holder or Govt.

Grantee/Allottee etc.)

10. If leasehold, whether;

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a)lease Deed is duly stamped and registered

b)lessee is permitted to mortgage the Leasehold right,

c)duration of the Lease/unexpired period of lease,

d)if, a sub-lease, check the lease deed in favour of Lessee as to

whether Lease deed permits sub-leasing and mortgage by Sub-

Lessee also.

e)Whether the leasehold rights permits for the creation of any

superstructure (if applicable)?

f)Right to get renewal of the leasehold rights and nature thereof.

If Govt. grant/ allotment/Lease-cum/Sale Agreement, whether;

grant/ agreement etc. provides for alienable rights to the

mortgagor with or without conditions,

the mortgagor is competent to create charge on such property,

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whether any permission from Govt. or any other authority is

required for creation of mortgage and if so whether such valid

permission is available.

If occupancy right, whether;

a)Such right is heritable and transferable,

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b)Mortgage can be created.

13. Nature of Minor’s interest, if any and if so, whether creation of

mortgage could be possible, the modalities/procedure to be

followed including court permission to be obtained and the

reasons for coming to such conclusion.

If the property has been transferred by way of Gift/Settlement

Deed, whether:

a) The Gift/Settlement Deed is duly stamped and registered;

b) The Gift/Settlement Deed has been attested by two

witnesses;

c) The Gift/Settlement Deed transfers the property to Donee;

d) Whether the Donee has accepted the gift by signing the

Gift/Settlement Deed or by a separated writing or by implication

or by actions;

e) Whether there is any restriction on the Donor in executing the

gift/settlement deed in question;

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f) Whether the Donee is in possession of the gifted property;

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g) Whether any life interest is reserved for the Donor or any

other person and whether there is a need for any other person to

join the creation of mortgage;

h) Any other aspect affecting the validity of the title passed

through the gift/settlement deed.

15. (a) In case of partition/family settlement deeds, whether the

original deed is available for deposit. If not the

modality/procedure to be followed to create a valid and

enforceable mortgage.

(b) Whether mutation has been effected and whether the

mortgagor is in possession and enjoyment of his share.

(c) Whether the partition made is valid in law and the

mortgagor has acquired a mortgagable title thereon.

(d) In respect of partition by a decree of court, whether such

decree has become final and all other conditions/ formalities are

completed/ complied with.

(e) Whether any of the documents in question are executed

in counterparts or in more than one set? If so, additional

precautions to be taken for avoiding multiple mortgages?

Whether the title documents include any testamentary

documents /wills?

(a) In case of wills, whether the will is registered will or

unregistered will?

(b) Whether will in the matter needs a mandatory probate

and if so whether the same is probated by a competent court?

(c) Whether the property is mutated on the basis of will?

(d) Whether the original will is available?

(e) Whether the original death certificate of the testator is

available?

16.

(f) What are the circumstances and/or documents to

establish the will in question is the last and final will of the

testator?

(Comments on the circumstances such as the availability of a

declaration by all the beneficiaries about the genuineness/

validity of the will, all parties have acted upon the will, etc., which

are relevant to rely on the will, availability of Mother/Original title

deeds are to be explained.)

17. (a) Whether the property is subject to any wakf rights?

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(b) Whether the property belongs to church/ temple or any

religious/other institutions having any restriction in creation of

charges on such properties?

(c) Precautions/ permissions, if any in respect of the above

cases for creation of mortgage?

(a) Where the property is a HUF/joint family property,

mortgage is created for family benefit/legal necessity, whether

the Major Coparceners have no objection/join in execution,

minor’s share if any, rights of female members etc.

18.

(b) Please also comment on any other aspect which may

adversely affect the validity of security in such cases?

(a) Whether the property belongs to any trust or is subject to

the rights of any trust?

(b) Whether the trust is a private or public trust and whether

trust deed specifically authorizes the mortgage of the property?

(c) If so additional precautions/permissions to be obtained for

creation of valid mortgage?

19.

(d) Requirements, if any for creation of mortgage as per the

central/state laws applicable to the trust in the matter.

(a) If the property is Agricultural land, whether the local laws

permit mortgage of Agricultural land and whether there are any

restrictions for creation/enforcement of mortgage.

(b) In case of agricultural property other relevant

records/documents as per local laws, if any are to be verified to

ensure the validity of the title and right to enforce the mortgage?

20.

(c) In the case of conversion of Agricultural land for

commercial purposes or otherwise, whether requisite procedure

followed/permission obtained.

21. Whether the property is affected by any local laws or other

regulations having a bearing on the creation security (viz.

Agricultural Laws, weaker Sections, minorities, Land Laws, SEZ

regulations, Costal Zone Regulations, Environmental Clearance,

etc.),

(a) Whether the property is subject to any pending or

proposed land acquisition proceedings?

22.

(b) Whether any search/enquiry is made with the Land

Acquisition Office and the outcome of such search/enquiry.

23. (a) Whether the property is involved in or subject matter of

any litigation which is pending or concluded?

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(b) If so, whether such litigation would adversely affect the

creation of a valid mortgage or have any implication of its future

enforcement?

(c) Whether the title documents have any court seal/

marking which points out any litigation/ attachment/security to

court in respect of the property in question? In such case please

comment on such seal/marking.

(a) In case of partnership firm, whether the property belongs

to the firm and the deed is properly registered.

(b) Property belonging to partners, whether thrown on

hotchpot? Whether formalities for the same have been

completed as per applicable laws?

24.

(c) Whether the person(s) creating mortgage has/have

authority to create mortgage for and on behalf of the firm.

25. Whether the property belongs to a Limited Company, check the

Borrowing powers, Board resolution, authorisation to create

mortgage/execution of documents, Registration of any prior

charges with the Company Registrar (ROC), Articles of

Association /provision for common seal etc.

26. In case of Societies, Association, the required authority/power to

borrower and whether the mortgage can be created, and the

requisite resolutions, bye-laws.

(a) Whether any POA is involved in the chain of title?

(b) Whether the POA involved is one coupled with interest,

i.e. a Development Agreement-cum-Power of Attorney. If so,

please clarify whether the same is a registered document and

hence it has created an interest in favour of the

builder/developer and as such is irrevocable as per law.

(c) In case the title document is executed by the POA holder,

please clarify whether the POA involved is (i) one executed by

the Builders viz. Companies/ Firms/Individual or Proprietary

Concerns in favour of their Partners/ Employees/ Authorized

Representatives to sign Flat Allotment Letters, NOCs,

Agreements of Sale, Sale Deeds, etc. in favour of buyers of

flats/units (Builder’s POA) or (ii) other type of POA (Common

POA).

27.

(d) In case of Builder’s POA, whether a certified copy of POA

is available and the same has been verified/compared with the

original POA.

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(e) In case of Common POA (i.e. POA other than Builder’s

POA), please clarify the following clauses in respect of POA.

i. Whether the original POA is verified and the title

investigation is done on the basis of original POA?

ii. Whether the POA is a registered one?

iii. Whether the POA is a special or general one?

iv. Whether the POA contains a specific authority for

execution of title document in question?

(f) Whether the POA was in force and not revoked or had

become invalid on the date of execution of the document in

question? (Please clarify whether the same has been

ascertained from the office of sub-registrar also?)

(g) Please comment on the genuineness of POA?

(h) The unequivocal opinion on the enforceability and validity

of the POA?

28. Whether mortgage is being created by a POA holder, check

genuineness of the Power of Attorney and the extent of the

powers given therein and whether the same is properly

executed/ stamped/ authenticated in terms of the Law of the

place, where it is executed.

29. If the property is a flat/apartment or residential/commercial

complex, check and comment on the following:

(a) Promoter’s/Land owner’s title to the land/ building;

(b) Development Agreement/Power of Attorney;

(c) Extent of authority of the Developer/builder;

(d) Independent title verification of the Land and/or building in

question;

(e) Agreement for sale (duly registered);

(f) Payment of proper stamp duty;

(g) Requirement of registration of sale agreement,

development agreement, POA, etc.;

(h) Approval of building plan, permission of appropriate/local

authority, etc.;

(i) Conveyance in favour of Society/ Condominium

concerned;

(j) Occupancy Certificate/allotment letter/letter of

possession;

(k) Membership details in the Society etc.;

(l) Share Certificates;

(m) No Objection Letter from the Society;

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(n) All legal requirements under the local/Municipal laws,

regarding ownership of flats/Apartments/Building Regulations,

Development Control Regulations, Co-operative Societies’ Laws

etc.;

(o) Requirements, for noting the Bank charges on the

records of the Housing Society, if any;

(p) If the property is a vacant land and construction is yet to

be made, approval of lay-out and other precautions, if any.

(q) Whether the numbering pattern of the units/flats tally in all

documents such as approved plan, agreement plan, etc.

30. Encumbrances, Attachments, and/or claims whether of

Government, Central or State or other Local authorities or Third

Party claims, Liens etc. and details thereof.

31. The period covered under the Encumbrances Certificate and the

name of the person in whose favour the encumbrance is created

and if so, satisfaction of charge, if any.

32. Details regarding property tax or land revenue or other statutory

dues paid/payable as on date and if not paid, what remedy?

33. (a) Urban land ceiling clearance, whether required and if so,

details thereon.

(b) Whether No Objection Certificate under the Income Tax Act

is required/ obtained.

34. Details of RTC extracts/mutation extracts/ Katha extracts

pertaining to the property in question.

35. Whether the name of mortgagor is reflected as owner in the

revenue/Muncipal/Village records?

36. (a) Whether the property offered as security is clearly

demarcated?

(b) Whether the demarcation/ partition of the property is

legally valid?

(c) Whether the property has clear access as per

documents?

37. Whether the property can be identified from the following

documents, and discrepancy/doubtful circumstances, if any

revealed on such scrutiny?

(a) Document in relation to electricity connection;

(b) Document in relation to water connection;

(c) Document in relation to Sales Tax Registration, if any

applicable;

(d) Other utility bills, if any.

38. In respect of the boundaries of the property, whether there is a

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difference/discrepancy in any of the title documents or any other

documents (such as valuation report, utility bills, etc.) or the

actual current boundary? If so please elaborate/ comment on the

same.

39. 1If the valuation report and/or approved/ sanctioned plans are

made available, please comment on the same including the

comments on the description and boundaries of the property on

the said document and that in the title deeds.

(If the valuation report and/or approved plan are not available at

the time of preparation of TIR, please provide these comments

subsequently, on making the same available to the advocate.)

40. Any bar/restriction for creation of mortgage under any local or

special enactments, details of proper registration of documents,

payment of proper stamp duty etc.

41. Whether the Bank will be able to enforce SARFESI Act, if

required against the property offered as security?

42. In case of absence of original title deeds, details of legal and

other requirements for creation of a proper, valid and

enforceable mortgage by deposit of certified extracts duly

certified etc., as also any precaution to be taken by the Bank in

this regard.

43. Whether the governing law/constitutional documents of the

mortgagor (other than natural persons) permits creation of

mortgage and additional precautions, if any to be taken in such

cases.

44. Additional aspects relevant for investigation of title as per local

laws.

45. Additional suggestions, if any to safeguard the interest of Bank/

ensuring the perfection of security.

46. The specific persons who are required to create mortgage/to

deposit documents creating mortgage.

Note: In case separate sheets are required, the same may be used, signed and annexed. Date: Place: Signature of the Advocate

20

Annexure – C: Certificate of title I have examined the Original Title Deeds intended to be deposited relating to the

schedule property/(ies) and offered as security by way of *Registered/ Equitable/English Mortgage (*please specify the kind of mortgage) and that the

documents of title referred to in the Opinion are valid evidence of Right, title and Interest

and that if the said Registered/ Equitable Mortgage is created, it will satisfy the

requirements of creation of Registered/ Equitable Mortgage and I further certify that:

2. I have examined the Documents in detail, taking into account all the Guidelines in

the check list vide Annexure B and the other relevant factors. 3. I confirm having made a search in the Land/ Revenue records. I also confirm having

verified and checked the records of the relevant Government Offices,/Sub-Registrar(s)

Office(s), Revenue Records, Municipal/ Panchayat Office, Land Acquisition Office,

Registrar of Companies Office, Wakf Board (wherever applicable). I do not find

anything adverse which would prevent the Title Holders from creating a valid Mortgage.

I am liable /responsible, if any loss is caused to the Bank due to negligence on my part

or by my agent in making search.

4. Following scrutiny of Land Records/ Revenue Records, relative Title Deeds, certified

copies of such title deeds obtained from the concerned registrar office and

encumbrance certificate (EC), I hereby certify the genuineness of the Title Deeds.

Suspicious/ Doubt, if any, has been clarified by making necessary enquiries.

5. There are no prior Mortgage/ Charges/ encumbrances whatsoever, as could be

seen from the Encumbrance Certificate for the period from _________ to __________

pertaining to the Immovable Property/(ies) covered by above said Title Deeds. The

property is free from all Encumbrances.

6. In case of second/subsequent charge in favour of the Bank, there are no other

mortgages/charges other than already stated in the Loan documents and agreed to by

the Mortgagor and the Bank (Delete, whichever is inapplicable).

7. Minor/(s) and his/ their interest in the property/(ies) is to the extent of ____________ ( Specify the share of the Minor with Name). (Strike out if not applicable). 8. The Mortgage if created, will be available to the Bank for the Liability of the Intending Borrower, Shri/Smt/M/s. _________________ 9. I certify that Shri/ Smt/ M/s. ___________________________ has / have an

absolute, clear and Marketable title over the Schedule property/ (ies). I further certify

that the above title deeds are genuine and a valid mortgage can be created and the

said Mortgage would be enforceable.

10. In case of creation of Mortgage by Deposit of title deeds, we certify that the deposit

of following title deeds/ documents would create a valid and enforceable mortgage:

a.

b.

21

11. There are no legal impediments for creation of the Mortgage under any

applicable Law/ Rules in force.

SCHEDULE OF THE PROPERTY (IES) Place : Date : Signature of the Advocate

22

Annexure - C1: Certificate of Title on the Basis of Certified copies of the Title Deeds I have examined the Certified copies of Original Title Deeds intended to be deposited

relating to the schedule property/(ies) to be offered as security by way of *Registered/

Equitable/English Mortgage and that the certified copies of documents of title referred to

in the Opinion are valid as secondary evidence of Right, title and Interest and that the

said Registered/ Equitable Mortgage to be created on production of original title deeds

will satisfy the requirements of creation of Registered/ Equitable Mortgage and I further

certify that:

(*please specify the kind of mortgage) 2. I have examined the Certified copies of Documents in detail, taking into account all

the Guidelines in the check list vide Annexure B and the other relevant factors and

undertake to re-examine the original title deeds as and when produced and

3. I confirm having made a search in the Land/ Revenue records. I also confirm having

verified and checked the records of the relevant Government Offices,/Sub-Registrar(s)

Office(s), Revenue Records, Municipal/ Panchayat Office, Land Acquisition Office,

Registrar of Companies Office, Wakf Board (wherever applicable). I do not find

anything adverse which would prevent the Title Holders from creating a valid Mortgage

on production of the original title deeds. I am liable /responsible, if any loss is caused to

the Bank due to negligence on my part or by my agent in making search.

4. Following scrutiny of Land Records/ Revenue Records and relative Certified copies of

Title Deeds, certified copies of such title deeds obtained from the concerned registrar

office and encumbrance certificate (EC) I hereby certify the genuineness on the basis of

the certified copies of the Title Deeds. Suspicious/ Doubt, if any, has been clarified by

making necessary enquiries.

5. There are no prior Mortgage/ Charges/ encumbrances whatsoever, as could be seen

from the Encumbrance Certificate for the period from _________ to __________

pertaining to the Immovable Property/(ies) covered by above said Certified copies Title

Deeds. The property appears to be free from all Encumbrances.

6. In case of second/subsequent charge in favour of the Bank, there are no other

mortgages/charges other than already stated in the Loan documents and agreed to by

the Mortgagor and the Bank (Delete, whichever is inapplicable).

7. Minor/(s) and his/ their interest in the property/(ies) is to the extent of

_________________ ( Specify the share of the Minor with Name). (Strike out if not

applicable).

8. The Mortgage if created, will be available to the Bank for the Liability of the Intending

Borrower, Shri/Smt/M/s. _________________

9. I certify that Shri/ Smt/ M/s. ___________________________ has / have an

absolute, clear and Marketable title over the Schedule property/ (ies). I further certify

that the above certified copies of title deeds appear to be genuine and a valid mortgage

can be created on the basis of the original title deeds and the said Mortgage would be

enforceable.

23

10. In case of creation of Mortgage by Deposit of title deeds, we certify that the deposit

of original title deeds/ documents the certified copies of which have been examined

would create a valid and enforceable mortgage:-

a)

b)

There are no legal impediments for creation of the Mortgage on production of original of

title deeds the certified copies of which I have examined under any applicable Law/

Rules in force.

SCHEDULE OF THE PROPERTY/IES

Place:- Signature of the Advocate

Date:-

24

Annexure - D: Guidance Note for the Advocate verifying the Genuineness of Title Documents Vigilant and meticulous examination of the documents, keeping in mind the nature and

features of each document and comparison with the official records such as details

available with the office of sub-registrar or in certified copies are helpful in ensuring the

genuineness of the documents. Based on the past experience we have listed below

suspicious circumstances which would be helpful in verifying the genuineness of the

documents of title by the advocates and would serve as a guiding note. Circles may

circulate additional points based on their experience.

(a) Non-availability of a certified or scanned certified copy should be treated as

suspicious circumstance.

(b) CD numbers mentioned in the document and available with the office with which the

document was registered, do not match.

(c) Signatures of the Sub-registrar do not match.

(d) The thumb impressions or signatures of the vendors and vendee do not match.

(e) Printed photo of the vendor appears on the title deeds instead of original

photograph.

(f) Entire consideration stated in the document is paid in cash.

(g) Compare the serial number of the deed with the deed number as the serial number

of the deed is numerically larger than the deed number. In forged/fabricated/ fake

documents the serial number of the deed is sometimes numerically smaller or equal

than the deed number. These numbers would normally appear on the first page of

the registered date.

(h) On the page which is usually backside of the first page the presentation and

execution portion of the deed appears. The presentation portion is always written by

an office clerk of the Registering Official whereas the execution portion is written by

the registry office. In fake /fabricated /forged document the presentation and

execution portion are mostly in the handwriting of the same person.

(i) On the bottom portion of the back side of the first page of the registered deed, a

serial number is mentioned, next to the L.T.I. of the executant. This serial number

should be tallied with the register. In fake deeds the serial number will not tally with

serial number given in the "thumb register" of registry office.

(j) On every non-judicial stamp paper of the registered deed there are two seals. One

seal is that of the local treasury and the other is that of the registry office. On the

seal of registry office, lies the signature of the registering authority. In

fake/fabricated/forged deeds there are at times two signatures of the registering

authority.

(k) On the last page of the registered deed there has to be two seals of the registry

office along with single signature of Registering Officer (R.O.). If there is only one

seal or more signatures of the registering authority the registered deed could be a

fabricated one.

25

(l) The back portion of the last page of the registered deed bears endorsement portion

of the deed. This lies normally at the bottom of the page. The endorsement portion

mentions the deed number, page number, Zild number. and registration date i.e. the

date on which the deed was copied in the volume register. The entry of the

endorsement portion and the volume register has to be made by the same office

clerk in the same language, same handwriting and same ink pen. This endorsement

portion also bears the signature of the registering authority, who also makes single

signature in the volume register. If hand writing, language, signature and ink colour

of the endorsement portion of the registered deed differs from the entry made in

volume register, then the deed is most likely to be forged.

(m) Whenever colour photocopying is used to create fake set of documents of title, the

edges of the papers in the colour photocopies will have a different colour. This can

be observed by a close examination of the documents.

(n) If the documents are fake/forged, the watermark which appears on the general

stamp papers may not appear on the fake documents though in certain cases it has

been observed that the watermark is also present in the fake/counterfeit documents.

(o) The serial number appearing on the stamp paper can be cross checked with the

stamp office/stamp vendor to determine the fake or genuine nature of the stamp

paper.

(p) Submission of the original receipts evidencing payment of appropriate stamp duty as

well as registration fees should be insisted upon. Normally, in case of multiple copies

of title deeds, verification of appropriate payment of stamp duty after submission of

original receipts with stamp office/vendor may help in detection of the

fake/counterfeit nature of the documents of title.

(q) As per the provisions of the Indian Registration Act, the Document

Number/Registration Number would begin at No.1 on 1st January each year and

would serially end on 31st December of that year. Therefore, if the document is

registered on 3rd January of any year, the Document Number/Registration Number

will be comparatively less and it would progress serially as the year progresses,

depending upon the volume of transactions in the particular office of the Sub-

registrar/District Registrar/Registrar, as the case may be. This can be a guiding

factor for determining whether or not a document is genuine.

(r) Normally, a practice is followed by the Registration office that each volume would

contain about 200 pages. Therefore, if a title deed comprises of six pages and the

first page of this title deed is posted on or given page No.9 of Volume No.II, the said

document shall end on page 14 of that volume. Once, 200 pages are complete, the

volume number generally changes to the next one of that particular year. Therefore,

26

if the volume number of a title deed is 576 in June 2012, it shall automatically

increase in October 2012 and may be 1100, depending upon the volume of

transactions registered in that particular office of the Sub-registrar/District

Registrar/Registrar. Hence, normally page number of a title deed cannot be more

than 200 in number.

(s) Entries of book Nos. I, III and IV are always different.

27

Annexure – E: Checklist for scrutiny of TIR by the branches/ operating units The officials scrutinising the TIR need to verify and examine each and every columns/

paragraphs in the TIR and the certificate. This checklist is not in substitution but in

addition to such a scrutiny.

Name of the borrower :

Name of the Advocate submitted the TIR :

Number & Date of TIR :

Short description of the property covered by TIR:

S.No Details Y/ N

1. Whether the Advocate submitted the TIR is in Bank’s

panel of lawyers identified for submission of TIR?

2. Whether the report and certificate submitted by the

advocate are in the Bank’s prescribed format?

3. Whether the TIR by the advocate is unconditional?

4. If the TIR has any conditions, whether the same are

complied with?

5. As per the TIR, whether the documents of title are

complete in all respects and sufficient to convey a clear,

absolute and marketable title to the property

6. As per the TIR, whether the property offered as security to

the Bank is unencumbered/ unattached?

7. As per the TIR, whether the persons seeking to secure the

property to the Bank have a clear and marketable title

thereto and are legally capable of creating the charge

thereon in favour of the Bank?

8. As per the TIR, whether the property is subject to any

tenancy law which will affect the Bank’s rights eventually

to take possession thereof or cause it to be sold or

otherwise exercise its rights as mortgagee?

9. As per the TIR, whether the property offered is an

agricultural property and if so additional precautions in

respect of the acceptability of such security has been

examined?

10. Whether the advocate has made searches of the registers

and other records maintained by the Sub-Registrar of

Assurances, Collector and/or other revenue authorities for

ascertaining whether there is any outstanding mortgage or

charge on the property to be mortgaged to the Bank?

11. Whether the advocate has confirmed that he has

conducted independent Search in the Records of Sub-

Registrar Office(s) concerned and that the documents ,

28

convey Clear, Absolute and Marketable Title and are

sufficient for creation of a valid Mortgage?

12. Whether the TIR reveals involvement of any gift deed,

PoA, or other circumstances attracting special

precautions?

13. Whether the advocate has also submitted the fee receipt

for conducting Search in the Office of Sub-Registrar(s)

along with the TIR?

14. Whether the property particulars mentioned in the Title

Deed (Sale Deed/ Khatauni) tally with those in the Non

Encumbrance Certificate, approved Building Plan and TIR,

etc.?

15. Whether all the Original Documents and other Link

Documents as stipulated by the advocate in the TIR are

obtained?

16. In respect of loans of Rs.1.00 crore and above:

(a) Whether search of title/encumbrance was made by

the advocate for a period of not less than 30 years?

(b) Whether satisfactory search report (TIR) is obtained

from two panel advocates?

17. Whether the TIR or any other documents in the matter

reveal any pending or concluded litigation in respect of the

property offered as security and whether the impact of

such litigation has been satisfactorily explained/ got

examined?

18. (a) Findings, if any in respect of the property offered as

the security in the valuation report?

(b) Whether there is any inconsistency in the TIR and

valuation report in respect of the property?

CSO/Field Officer/ Authorised Officer

Relationship Manager/ Branch Head/Unit Head

Signature

Name

Designation

Branch/Unit

Date of scrutiny

29

Annexure – F: Checklist on identification and physical verification of the property (Physical verification of the properties mortgaged to the Bank must be meticulously

followed in case of all loans.)

Name of the Branch/ Business Unit :-

Name(s) of the Inspecting Officials :- 1.

2.

S. No

Parameters Details Checked (Y or N)

CSO/Field Officer/ Authorised Officer


1. Name of the title holder of

the property(ies)

2. Whether Borrower/s or

Guarantor/s

3. Constitution of the

Borrowers/ Guarantors

4. Description of documents

scrutinized

5. Description of Property/

Properties (Address)

Survey / Door No.

Extent

Location

Boundaries East

West

North

South

6. Location Details

7. Prominent landmark

30

S.No Parameters Details Checked

(Y or N) CSO/Field Officer/ Authorised Officer


8. Nearest Bus stop

9. Details of enquiries made

with neighbors regarding

ownership/valuation

Certificate a) We confirm that we have personally visited the property to be accepted as Mortgage

on ------------- and certify that the details given in the TIR confirms to our finding.

b) We have enquired the price of the property in the area and we found that our

valuation in line with the trend and reasonable.

CSO/Field Officer/Authorised Officer

Relationship Manager/Branch Head/Unit Head

Signature

Name

Designation

Branch/Unit

Date

31

Annexure - G: Procedure and Precautions

A. General Procedures. 1. Procedure to be followed in handing over the documents to the advocate.

1.1. The original title deeds of the property should be handed over to the Advocate by branches/CPCs functionaries/officer and not by the borrower/guarantor directly. Before handing over the original documents, branches/CPCs have to retain one set of photocopies of the documents at their end and also to enter the details as per para. 1.2 below in the register maintained in this regards. Any queries, clarifications of the Advocate should be dealt with by the branch/CPC staff after getting suitable clarifications from the borrower/guarantor /third party owning the property.

1.2. Appropriate registers are to be maintained at branches/ CPCs for handing over and getting back the original documents from the Advocates. The following details are to be mentioned in such registers:

1.2.1 Sl. No., Date, Name and signature of the Bank Official receiving

the documents from the borrower/guarantor;

1.2.2 Name and signature of the Bank Official handing over the

documents to Advocate;

1.2.3 The number, date, parties and description of the documents

received from Borrower/Guarantor and handed over to Advocate;

1.2.4 Date, name and signature of Advocate receiving the documents;

1.2.5 Details of document returned;

1.2.6 Date, name and signature of the advocate returning the documents;

1.2.7 Name and signature of the bank officer receiving back the

documents;

1.2.8 Remarks, if any by branch.

1.3. In exceptional cases, if the original title deeds are not available at the time

of conducting title investigation, but received at the Bank subsequent to

the obtention of TIR, the advocate has to verify/scrutinise the original title

deeds and to certify the genuineness of the original title deed and the

report already submitted will hold good for original documents

subsequently verified. In all such cases, a written confirmation from the

advocate needs to be obtained and kept on record before disbursement of

loan.

1.4. The Advocate has to take actual and personal inspection of the relevant

books and indexes maintained/kept in the office(s) of sub-registrar, office

of registrar and other relevant offices wherever applicable.

1.5. Reasonable time should be given to the Advocates to make proper

search and to conduct effective title investigation. In respect of loans other

than Home Loans, generally 10 days will be reasonable for submission of

TIR.

32

2. Procedure to be followed in Creation of Equitable Mortgage. 2.1. Once the TIR is received from the Advocate, the same should be

scrutinised as per checklist given vide Annexure E.

2.2. Obtain all the title deeds in original from the borrower in the chain of title.

Where all the originals as aforesaid are not available, minimum previous

two transactions/sale/ title deeds should be obtained from the borrower

along with a declaration explaining non availability of the original title

deeds in respect of past transaction to the satisfaction of Bank authorities.

2.3. All the original title deeds should be got deposited in the notified area and

a memorandum of entry as per prescribed format should be recorded for

the purpose of creation of mortgage.

2.4. Documents other than partition or family settlement deeds, wherever the

documents are registered in counterparts, all such counterparts available

with the mortgagor should be deposited along with the original documents

to avoid misutilisation of such counterparts.

2.5. For creating Equitable Mortgage of a flat/ independent house by a member

of Co- operative Housing Society, NOC is necessary to ensure that no

dues of the society are outstanding against such member, and a

declaration that the society has not created any prior charge over the

property which is subsisting.

2.6. A Search Report/ encumbrance certificate for the intervening period, i.e.

from the date of TIR to the date of deposit of original Title Deeds/ creation

of EM should be obtained and held on record, as part of equitable

mortgage documents.

2.7. It is to be ensured that the equitable mortgage confirmation letter by the

mortgagor is received and kept on records.

2.8. Timely execution of Sale Deed in favour of the purchaser/borrower and

completion of equitable mortgage formalities without delay, Bank’s charge

on property noted and possession of the property is taken by the borrower

wherever applicable are to be complied.

2.9. Building Plan approved by the Competent Authority should be obtained

and perused and evidence of Independent Site Verification should be

recorded.

2.10. A declaration-cum-affidavit should be obtained from the

borrower/guarantor/3rd party offering his/her/their property as security

declaring the following and to be kept along with mortgage documents:

2.10.1. He/she/they is/are absolute owner of the property offered as

security.

2.10.2.The title deeds deposited with/handed over to the Bank are original

title deeds in their possession and there is no title deed apart from

the deeds deposited with/handed over to the Bank.

33

2.10.3 .He/she/they have not created any charge/mortgage or any other

encumbrance on the property offered as security to the Bank.

2.10.4. He/she/they have not entered into any transaction of any nature

whatsoever in respect of the property offered as security to the

Bank.

2.10.5. There are no circumstances which adversely affect the mortgage

and its validity/enforcement.

2.10.6 . There is no tax liability, utility bills or any other dues pending in

respect of the property offered as security.

2.10.7. The property offered as security shall be available for the loan

sanctioned or to be sanctioned to the borrower.

2.11 Ensure the payment of stamp duty and registration of equitable

mortgage wherever applicable as per the relevant State laws.

2.12 Ensure the registration of equitable mortgages with the CERSAI under

SARFAESI Act as per the extant instructions in this regard.

3. Verification of the records of Central Registry. 3.1. Before creation of any mortgage the branches/ operating units have to

verify the records of the Central Registry of Securitisation, Asset

Reconstruction and Security Interest of India (CERSAI)

(www.cersai.org.in) to see that there is no pre-existing charge registered

with Central Registry. Such exercise is also to be conducted at the time of

renewal/ sanction of additional limits.

3.2. Immediately after creation of mortgages, branches have to ensure

registration of such charges with Central Registry within 30 days as per

the instructions in this regard.

4. Identification of the Property Identification of the property is one of the most important steps to be undertaken for

creation of a valid security. Certain aspects to be kept in mind in identification of the

property are explained herein.

4.1. Demarcation Demarcation of the property is important for its identification and possible enforcement,

if required on a later date. Hence, no property should be accepted as primary security/

collateral security if the property cannot be demarcated. The Advocates/ Valuers should

also be sensitised in this regard.

4.2. Utility Bills Strengthening of the due diligence process and proper identification of the property are

also a part of measures to avert frauds. Therefore, in addition to all other existing

procedures, the following additional aspects shall also be dully examined and papers

relating to atleast two of the following documents should be verified along with the Title

deeds:

34

(i) Electricity Connection

(ii) Water Connection

(iii) Sales Tax Registration

Hence the above documents are also to be made available to the panel advocate

preparing the TIR and he shall furnish confirmation of having verified and taken

cognizance of the same in compiling TIR.

4.3. Approved Plans The Valuer has to obtain a certified copy of the approved/ sanctioned plan wherever

applicable from the concerned office and to verify the same and attach it with the

valuation report.

Valuation report and certified copy of plan obtained by the Valuer should be made

available to the Advocate to verify description and boundaries of the property wherever

applicable. However, the obtention of TIR from the Advocate shall not be delayed for

getting the valuation report and certified copy of plan from the Valuer. Both the valuation

and search of title can be proceeded simultaneously and comments of the advocate on

valuation report can be obtained separately.

4.4. Mutation of the Property. (a) The mutation of the property in the name of mortgagor should normally be

insisted upon. Exemptions should be satisfactorily explained and efforts should

be made to ensure the veracity of the reasons given by the mortgagor for non-

mutation of the property.

(b) In such cases the reasons for non-mutation should be cross checked with

Appropriate Authority (Government/Semi-Government bodies like Delhi

Development Authority-DDA, HUDA, etc.).

(c) Wherever the property is not mutated, without the personal visit to the property

by Branch Manager and/or Relationship Manager/Field Officer same should not

be accepted as security.

(d) The Panel Advocate should invariably offer his comments on non-mutation.

5. Inspection of the property Pre-sanction and post-sanction inspection of the property proposed to be mortgaged is

to be conducted as per laid down instructions. It should comprise of the following:

i) Visit to the residence / business place of the borrower /guarantor / third party who

has offered to mortgage his property as a security.

ii) Discreet independent enquiries should be made regarding borrower(s)

/guarantor(s) /third parties, credentials and antecedents, information about their

loans, if any, availed by them from other branches / banks / institutions etc. from

the neighborhood including the actual possession/ownership of the property

offered as a security.

iii) Third party property dealer/seller/builder must be contacted independently to

verify genuineness of their offer / transaction. Credentials of third party dealer

35

/seller / builders are to be verified by discreet market enquiries and from other

dealer / seller / builders in the neighborhood.

iv) Visit to site of the property proposed to be purchased / mortgaged for physical

verification independently without assistance of borrower/guarantor and make

discreet independent enquiries with neighbor(s).

v) The existence of the property mortgaged / to be mortgaged must be verified

independently.

vi) Full description of the property with boundaries should be on record so as to

have proper identification of the property.

vii) Verification of the antecedents of the prospective customers as also the

genuineness of the documents submitted as proof of identity, residence, income

and employment should be ensured.

viii) Physical verification of the properties mortgaged to the Bank must be

meticulously followed in case of all loans.

6. Forged and Fake Documents i) To eliminate or reduce the cases where the Bank is induced to grant finance on

the basis of forged/fake documents, one of the steps which can be implemented

is to direct the Advocate who gives TIR to procure certified copies of the title

deeds and compare the certified copies with the original documents. The

process of comparison of certified copies with the originals can in a majority of

cases, detect the fake or forged nature of documents including encumbrance

certificates and the same is to be followed in all cases.

ii) The identity of the borrower should be verified.

iii) Wherever possible the genuineness of the documents, relating to the property be

got confirmed from the concerned offices/authorities.

iv) Re-verification of loan documents / securities in respect of loans which have

slipped into NPA within a short period should be carried out to detect any

possible fraudulent submission of forged / fake title deeds.

v) Conditional search report about ownership should not be accepted without

compliance with the steps suggested by the Advocate for perfection of title or the

gaps.

vi) The charges created in Bank’s favor on the property should be got noted with the

appropriate authorities immediately after creation of charge/mortgage.

vii) Details regarding the verification for ensuring the genuineness of the documents

are explained separately in this circular.

B. Special Precautions. 1. Mortgage by copies of title document Precautions to be taken in case of mortgage by certified copies for the reason that the

original documents are lost are explained herein.

36

For creation of equitable mortgage (EM), the original registered Title Documents should

invariably be deposited along with other documents. If the original registered Title

Document has been lost / misplaced and the mortgage is proposed to be created on the

basis of certified copy of the Title Document, the certified copy of the title deed should

be accepted only in exceptional cases where the original is conclusively proved to have

been destroyed or lost and after obtaining prior approval from the controlling authorities.

(In no case photocopy / laminated photocopy of the title deed is to be accepted.

Laminated original documents should also receive a more cautious approach.) Besides,

the Operating Units / Branches have to also follow strictly the undernoted procedure in

all such cases.

a) It may be confirmed that the FIR has been lodged in respect of the lost title deed.

Proof of complaint to the Police Department explaining with reasons as to when

and under what circumstances the Original Title Deeds were lost need to be

obtained.

b) Give notice to the public at large in a leading National daily and in one Regional

News Paper clearly stating that the Original Title Deeds have been lost , giving

full details of the property, and further stating that he/she wish to create charge

on the said property for availing loan/credit facility.

c) An affidavit-cum-declaration of the borrower/ guarantor is to be taken declaring

that the title deed has been lost. The affidavit should also contain i) full

particulars of the property, ii) reference to the FIR lodged and iii) the details of

advertisement published in a prominent newspaper.

d) Independent verification/ identification the property and mortgagor must be

ensured by the Operating Units.

The operating units/ branches should fully satisfy themselves in this regard as creation

of Mortgage by deposit of certified copy of the title deeds is fraught with risk.

Cases where the Original title deeds are not available, should receive more cautious

approach.

2. Mortgage by Gift Deed Precautions in case of creation of mortgage based on gift deed are as explained herein.

Whenever any property is taken as security (primary/ collateral) based on gift deed as

the principle title deed, clearance must be obtained from the Law Department without

fail. This is in addition to obtention of TIR from the Panel Advocate as required in the

normal course. A suitable confirmation to this effect must be invariably provided in the

credit proposal submitted to the Sanctioning Authority, as a foot note under Security

column.

Independent verification/ identification the property and mortgagor must be ensured by

the Operating Units.

3. Document by Power of Attorney Precautions in case of title document of the property is executed through Power of

Attorney are explained herein.

37

A. Legal Position of POA Legal position in respect of execution of documents by Power of Attorney Holder is as

under:

(i) The relationship between the owner of the property and the Power of Attorney holder

is that of a Principal and Agent.

(ii) The Power of Attorney holder acts on behalf of the owner of the property as per the

authority (power) conferred on him by virtue of the power of attorney executed in this

regard. The Power of Attorney may be executed for a specific purpose or for general

purpose.

(iii) All the acts done by the Power of attorney holder in pursuance of the powers

conferred by the deed during the life time of the owner of the property (principal) are

valid and binding on the owner and as per the terms of the power of attorney, the owner

is also duty bound to ratify the same as if is done by him.

(iv) All the acts which are not within the scope of power of attorney executed in this

regard are not valid and binding on the principal (owner) even though the acts are said

to be done on behalf of the owner.

(v) When a Power of Attorney holder executes a Sale Deed, record shall be had to the

validity of the power of attorney in this regard. So long the power of attorney is in force

and not revoked, the power of attorney holder can bind the principal i.e. owner.

(vi) The Power of Attorney executed in this regard stands automatically revoked on the

death of the principal. As such during the life time of the owner/principal only the power

of attorney holder can act/execute the sale deed on this behalf.

(vii) Any sale deed executed by the Power of attorney holder after the death of the

principal is not valid and binding.

(viii) Even if the Sale Deed is executed by the Power of attorney without the knowledge

of the death of the principal/owner. It is not valid and binding.

(ix) Mere execution of Power of Attorney in favour of a person does not deprive the

original owner of his right to deal with the property independently.

(x) Notwithstanding the execution of Power of attorney, a principal (owner) can alienate

the property.

(xi) Power of attorney coupled with an interest such as the PoA embedded in a

registered Development Agreement wherein the builder/ developer is also authorized to

sell/execute sale deeds in respect of the flats/ units developed as part of such

Development Agreement stand in a different legal footing from the normal POA. Such

POA coupled with interest is covered under section 202 of the Contract Act and hence

irrevocable and not terminated by the insanity or death of the principal.

B. Precautions in case of title documents executed by POA Cases where the title document is executed by POA holder, the complexities involved

need to be factored into the TIR obtained from the Bank’s empanelled advocate.

Keeping in view these complexities, the undernoted safeguards are required to be taken

care of in transactions involving POAs, to mitigate against occurrence of frauds.

38

The power of attorneys are categories into (i) Builder’s POA and (ii) Common POA for

the purpose of verification of the same in preparation and scrutiny of TIR. Separate

procedures are stipulated in each of the said cases. Further, a thid category of (iii) Development Agreement-cum-Power of Attorney is also explained.

i)Builder’s POA If the POA is executed by Builders viz. Companies/Firms/Individual or Proprietary

Concerns in favour of their Partners/Employees/ Authorized Representatives to sign

Flat Allotment Letters, NOCs, Agreements of Sale, Sale Deeds, etc. in favour of buyers

of flats/units, the operating units should comply with the following instructions while

handling the loan proposals:-

(a) Where the Builder is a Company: (i) Where a particular person or two or more persons have been authorized by way of a

Board Resolution by the Company, a certified copy of the Board Resolution should be

obtained from the Builder Company along with a letter confirming that the Resolution is

still in force and has not been rescinded, modified or withdrawn.

(ii) However in cases, where two or more persons have been authorized by execution of

a Power of Attorney under the Common Seal of the Company, a certified copy of the

Power of Attorney should be obtained along with a confirmation letter that the said

Power of Attorney is still valid in force and has not been revoked or withdrawn.

(iii) The verification/comparing the certified copy with the original Power of Attorney can

be done either by the operational functionaries or by the Advocate issuing the TIR.

(b) Where the Builder is a Partnership Firm: (i) In case of Partnership firms it is necessary that all the partners execute the Power of

Attorney in favour of the one or more persons who are authorized to sign and execute

Agreement of Sale, Sale deeds, etc. in favour of the purchaser of the flats/units.

Alternatively, one partner can be authorized specifically by the remaining partners to

execute a Power of Attorney on behalf of the firm in favour of one or more persons. This

authorization by the remaining partners in favour of one partner should be specific and

in writing.

(ii) If the Power of Attorney, issued on behalf of the firm, has been executed in

compliance of what is stated above, a certified copy of the same should be verified with

the original Power of Attorney and a confirmation letter should be obtained from the

Firm, confirming that the Power of Attorney is still valid/in force and has not been

revoked or withdrawn.

(iii) The verification/comparison of the certified copy with the original Power of Attorney

can be done either by the operational functionaries or by the Advocate issuing the TIR.

(c) Where the Builder is an Individual/Proprietary Concerns: (i) In case of Individuals or Proprietary Concerns whenever a Power of Attorney is

executed in favour of one or more persons, a certified copy of the same should be

obtained and verified with the original Power of Attorney. Further, a letter should be

39

obtained from the Builder confirming that the Power of Attorney executed in favour of

the person/s is still valid and has not been revoked or withdrawn.

(ii) The verification/comparison of the certified copy with the original Power of Attorney

can be done either by the operational functionaries or by the Advocate issuing the TIR.

ii)Common POA If the POA is not a Builder’s POA as mentioned above, the following instructions are to

be followed.

a) Wherever sale of the property is being executed by the POA holder, registration of

POA is mandatory in all cases and the Bank’s Advocate should mention in the TIR

that POA is alive and not revoked by any subsequent registered document.

b) Advocate should verify registered Power of Attorney and to be mentioned in the TIR.

c) The advocate should verify the genuineness of Power of Attorney (POA) in all such

cases where sale of the property is being executed by the POA holder.

d) Even when power of attorney has been registered, confirmation of the principal

should be obtained that he/she has granted the power of attorney which is still in

force and transactions already entered on the basis of power of attorney are valid

and binding on him. It is advisable to obtain a written confirmation from the Principal

confirming the sale.

e) The documents, submitted for identification of the principal, should be carefully

scrutinized. Every effort should be made to contact the Principal in person by Bank’s

dealing staff for ascertaining the fact that the person who executed the power of

attorney is alive or was alive at the time of execution of document.

f) If the Principal is residing in a foreign country, POA holder should submit a copy of

the passport of the principal for photo identification duly attested by the Notary public

along with the proof that the principal is alive.

g) A written communication/confirmation from the principal should be obtained

invariably with regard to the power of attorney executed by him/her.

h) All Title Investigation Reports (TIR) furnished by the Bank’s empanelled advocate in

respect of PoA sales, shall be vetted by the Bank’s Law Officer for their genuineness

and enforceability. However, in respect of loans upto an amount of Rs.30 Lacs, the

vetting by Bank’s Law officer can be waived subject to the condition that TIR being

furnished in respect of POA transactions is vetted by two empanelled advocates for

all centres.

i) In the light of the recent Supreme Court Judgment on POAs which ruled that

General Power of Attorney sales together with delivery of possession cannot be

treated as a sale deed conveying the title, necessary precautions need to be taken

to avoid lending against such transactions.

40

j) POAs shall be duly registered except in case of NRIs whose POA shall be attested

by Indian Embassy or notarised thereat.

k) Verification of chain of POAs is not necessary in respect of properties where:

i. Property is mutated in the name of the present owner

ii. All the relevant utility bills are transferred in the name of the present owner

iii. There should not be any dispute / litigation persisting on the POA relating to

the property under consideration

iv. Physical verification of property reports are prepared by officials of

Branch/operating units.

l) If any payment is to be made to POA holder, the POA must contain the clause that

any payment made to POA holder shall be deemed to have been received by the

principal.

m) In respect of builders where sale transactions take place on the basis of POAs for

each project, operating units are required to obtain confirmation from the principal of

the POA each time. DGM (B&O) is vested with discretion to permit relaxation.

n) Title investigation shall be done based on the original POA only.

o) TIR should contain unequivocal opinion on its nature i.e special POA or general,

enforceability and validity.

p) Ensure that same documents are deposited for mortgage as were scrutinised by

Advocate and Bank’s Law Officer to avoid the risk of duplicates being submitted.

q) Verify whether the POA is executed for carrying out bonafide transaction of

conveying the title to the property.

r) Verify whether the POA executed in this regard is not in lieu of the Conveyance

Deed as stated by the Honourable Supreme Court in its recent judgment.

s) Verify whether the principal/owner acted in his own right and disposed / alienated

the property notwithstanding the execution of POA which act of the Principal will

render the POA infructuous.

iii)Development Agreement-cum-Power of Attorney In certain cases the builders enter into Development Agreement-cum-Power of Attorney

with a group of land owners, which is duly registered in the sub-registrar office, and

develop a residential project after getting necessary approvals from different statutory

authorities. The nature of Development Agreement-cum-Power of Attorney is altogether

different than the standalone POA. POAs in such cases are embedded within the

Development Agreement and are usually coupled with some consideration. Normally

builders/developers would have either paid monetary consideration to the land/property

41

owners or have agreed to give them flats or bungalows as the case may be, in the

property to be developed. Such POAs are irrevocable and applicability of POA does not

get affected due to death of the Power of Attorney granter.

In respect of Development Agreement-cum-Power of Attorney, the TIR by the advocate

should specifically state the fact of such registration of the Development Agreement with

the embedded POA therein and that it has created an interest in favour of the

builder/developer and as such is irrevocable as per law. Such TIRs may be obtained in

respect of the project as a whole, from two advocates empanelled with the Bank. In

such circumstances, Bank’s officials contacting the granter of the POA, embedded in

such registered agreement, is neither warranted nor be insisted upon. Also the condition

that POA granter is alive and POA has not been revoked also need not be insisted

upon. However, all other safeguards stipulated above need to be complied in respect of

Development Agreement-cum-Power of Attorney.

4. Mortgage of flats/ units in Building/ Development Project for Housing Loans i) To mitigate the risk, Master Search of the proposed project should be carried out

by verification of original title deeds.

ii) Incorporate Builder’s name along with his Bank’s name and A/C No. on

DD/Banker’s cheque.

iii) Sale consideration be remitted directly to seller in his account through RTGS/

NEFT.

iv) While carrying out post sanction inspection, directly ascertain from the Builder

/Society the genuineness of the document noting Bank’s Lien / transfer of share

in borrower’s name.

v) Noting of Bank’s charge on property in Society record in cases of Housing Loans

to members of Housing Society.

vi) If there are number of housing loan cases of same type in an area, it should be

handed over to different Advocates/valuers and Branches/CPCs should not rely

upon single Advocate/valuer.

vii) In case of flats/unit of building, the original title deed(s) of the land on which the

building/project is built on/developed (mother deed) is/are may not be available

for creation of mortgage of individual flat/unit. In such cases in addition to the

original title documents in the name of first allotee/ purchaser of the flat/unit and

all the subsequent title documents, certified copy of mother deed may be

deposited for creation of mortgage. Nevertheless, in such cases, the advocate

has to scrutinise the original of the mother deed. Further, a certificate from the

Society/ Flat Owners Association/ Builder/Developer need to be obtained to see

that no prior charge/ mortgage are created and existing on the landed property

covered by the mother deed.

5. Additional Precautions in High Value Loans i. In respect of all loan proposals, while conducting TIR in respect of property

offered as security, the Advocate has to obtain certified copies of title deeds

including minimum two previous chain title documents and/or all chain title

42

documents executed within three years from the date of the current title deed

directly from the office of the concerned sub-registrar within whose jurisdiction

the property is situated or from the sub-registrar where the documents are

registered and the Advocate has to compare all the particulars in the original

documents with the certified copies so obtained to ensure that the documents

are properly registered and there is no alteration or modification in the original

documents submitted by the borrower/ guarantor giving rise to suspicion of

genuineness of the original documents.

ii. The certified copies so obtained should also be got deposited along with the

original documents while creating the equitable mortgage.

iii. In respect of all loan proposals above Rs.1.00 crore and above, mandatory

search of title/ encumbrances for a period of not less than 30 years are to be

made by the panel advocate.

iv. In respect of loan proposals above Rs.1.00 crore and above, satisfactory search

report from two different panel advocates are to be obtained.

6. Agricultural Land as Security

i. Whenever agricultural land is involved, or is offered as a security, the TIR must

cover issues such as necessary permission for non-agricultural use, or creation

of mortgage of agricultural land for non-agricultural advances.

ii. In agriculture advance, the prospective mortgagor produces khasara and

khatauni/ jamabandi/computerized revenue record as evidence of his title, and if

no other original title deeds are available, a declaration in the form of affidavit

should be obtained explaining loss/absence of title deeds including as to how the

borrower/ guarantor became the owner of the property. In such cases, 7/12

extract /khasara and khatauni/land record of the land with all mutation entries

should be obtained. Since 7/12 extract/ khasara and khatauni/land record is not

a title deed, registered mortgage of the land should be insisted upon and after

creation of mortgage, the mutation to this effect should be got entered into the

revenue record.

iii. In case of agriculture property proposed for the purpose to secure non-

agricultural advances, the opinion of Bank’s Law Department/ empanelled

advocate should be obtained regarding validity and enforceability.

iv. In case of registered mortgage of agricultural property, noting of Bank’s charge

on property in revenue record is to be done.

v. End use of fund must be ensured Loans Sanctioned on the basis of the security

of Agricultural Property.

43

C.Due Diligence and Prevention of Frauds. 1. Need for proper due diligence. Proper due diligence of the mortgagor by branch officials is important in ensuring that

there is no fraud in creation of security. The following are certain aspects of due

diligence.

i. Bank’s extant instructions from time to time in respect of KYC are to be complied

in case of all borrowers/mortgagors/ mortgagors. The copies of KYC documents

must be verified with original copy of identification/address proof by the dealing

official under his signature.

ii. KYC of the seller / builder / promoter also to be obtained as per laid down

guidelines.

iii. Branches should conduct thorough due diligence in matters like investigation of

title to the properties / verification of identity of borrower and/ or guarantor and

more so, where the mortgagor is not related to the business/ family of the

borrower.

iv. While accepting the guarantee of an individual, his/her identity and address

should be verified as per KYC guidelines and photograph should be obtained and

pasted on the relevant guarantee agreement, so that cases of impersonation by

the guarantors can be avoided. The photograph of the guarantor has to be

affixed on the guarantee agreement in the space provided, if any, or on the first

page of the guarantee agreement. Apart from the existing procedure of signing

the guarantee agreement, the Guarantor has to additionally sign across the

photograph pasted on the Guarantee agreement in such a way that part of the

signature is on guarantee agreement.

v. Wherever PAN Card is available it should invariably be verified from CBDT

website

vi. Due diligence in matters like investigation of title to the properties / verification of

identity of borrowers and/or the guarantors should be followed meticulously.

vii. Pre-sanction survey which is mandatory plays a vital role and hence needs to be

strictly followed not only in letter but spirit too. It should comprise of the following:

a. Visit to the residence/business place of the borrower /guarantor / third party

who has offered to mortgage the property as a security.

b. Discreet independent enquiries should be made regarding borrower(s) /

guarantor(s) / third parties, their credentials and antecedents from the

neighborhood and also about the possession/ownership etc.

c. Third party dealer/supplier/builder must be contacted independently to verify

genuineness of their offer/transaction.

d. Visit to site of the property proposed to be purchased / mortgaged for physical

verification must be done independently.

44

2. Certain shortcomings leading to mortgage frauds. Certain shortcomings noticed/ observations made in respect of investigation of title

leading to frauds in mortgage are the following:

i. Investigation of the title to the properties (offered as security to the Bank) was not

properly done by the Advocates/Solicitors.

ii. Gross negligence of advocates in the scrutiny of title, particularly in respect of

housing loans.

iii. The concerned officer (s) of the branches also failed to verify the report of the

advocate properly.

iv. The securities created by the borrowers and /or guarantors turned out to be not

enforceable in the Court of law.

v. On many occasions, mortgages were created on fake/forged documents of title.

(Certain steps to be followed to ascertain the genuineness of the documents are

given separately in this circular).

vi. The identity of the borrowers and /or the guarantors was not properly verified and

mortgage by way of deposit of title deeds was created by a fake person who had

no interest in the property.

vii. The mortgage was created on the basis of certified copies of the title deeds while

prior mortgage was already created on the basis of the original title deeds.

viii. Third party guarantor who created equitable mortgage of properties of which he

had no title.

ix. Failure to verify the genuineness of the documents to the title of the property

mortgaged at the time of its acceptance and deferred such verification till the time

of initiation of recovery proceedings.

x. Certain unscrupulous builders execute multiple sale deeds/ agreement to sale in

respect of the same flat/unit to different persons which can be avoided by

conducting proper due diligence on the builder, inspection of the property and

wherever possible by finding out the total number of registered documents

executed in respect of the entire project from the office of sub-registrar.

xi. Lamination of the documents is a highly suspicious circumstance as in some

cases frauds have perpetrated based on the laminated colour copies of the

original title deeds.

45

Annexure - H : Panel Advocates Review of panel of advocates While selecting the advocates/solicitors for investigation/ scrutiny of title of immovable

properties, special emphasis should be laid on the choice of advocates/solicitors having

the requisite expertise and reputation in the matter of scrutiny of title deeds of properties

for conveyance.

TIR in respect of loan accounts of Rs.1.00 crore and above needs to be obtained from

panel advocates having not less than 10 years of experience in title investigation

matters.

The financial details of the proposals should not, as far as possible, (except where

search for a longer period is required) be disclosed to the advocates/solicitors and the

fees should not solely be linked to the amount of the advance. All centres should have sufficient number of good advocates empanelled for scrutiny of

title investigation and to submit the report. Wherever possible, legal firms having

competent partners, sufficient facilities and expertise in the matters related to TIR may

be considered for empanelling to Bank’s panel of advocates for conducting TIR. The

performance of these advocates/firms in the Bank’s panel is to be monitored regularly

and at least once in a year all branches/ business units through their controller have to

submit a report to the concerned law department for the review and updating of list of

panel advocates identified for submission of TIR.

Review of the Panel of Advocates having regard to their performance, honesty and

integrity to the job assigned to them has to be made. Incompetent advocates are

required to be depanelled.

Quarterly meetings of panel lawyers identified for TIR works are to be held at RACPC

level or at District/ Taluk level to sensitise them on the various issues related to title

investigation and creation of valid mortgages.

Only in very selective cases where the advocate is found guilty of fraud, deceit,

criminal misappropriation, criminal breach of trust, forgery, malafide action, etc., Bar

Council may be approached for appropriate action against an advocate.

Remuneration to Advocate for conducting TIR Circles should review the existing fee structure payable to the Advocates, entrusted with

TIR work and revise, wherever necessary, the remuneration having regard to the efforts

which need to be put in by the Advocates.

Memorandum of Undertaking (MOU) with the panel advocates. A Memorandum of Undertaking (MOU) is to be entered with the empanelled advocates

for the specific purpose of obtaining TIR across all CPCs in the BPR Centres, RCPCs,

and all other Non BPR centres.

In respect of Corporate Accounts Group (CAG) and Project Finance Strategic Business

Unit (PFSBU), if the scope of work assigned to the Lenders’ Legal Counsel (LLC)

includes title verification of the security property, the MOU need not be entered into in

such cases. A similar approach may be followed in Mid Corporate Group also where the

46

services of LLC, with the wider scope of work including title verification, are considered

essential and proposed to be utilised accordingly. However, where the services of an

empanelled advocate is to be utilised only for the specific purpose of title verification,

the MOU as specified above is to be entered into in all such cases, irrespective of the

Business Units.

As empanelment of the advocates is centralised at Local Head Office for catering to all

the BUs falling under the same geographic region, the entering of MOUs may be

centralised at LHO / Zonal Office/ CPC or as decided by the respective Circles. The

MOU will be entered into with the panel advocates only once, initially at the time of

engaging them for title verification. In other words, the MOU should invariably be

entered into before utilising their services for title verification.

A draft copy of the MOU to be entered into with the empanelled advocates, is enclosed

as Annexure H1. If the MOU has already been obtained as per the format given in

CPPD Circular Letter No. CPP/VS/CIR/93 dated 12.12.2011 (Circular No. CCO/CPPD-

ADV/93/2011-12, dated 13.12.2011 – Sl. No. 810/2011-12) there is no need for again

executing the MOU revised herein. However, if MOU is as per any other earlier format

or no MOU, the format given herein need to be used.

The Branches/ Operating Units have to ensure that the MOU is already entered into

with the panel advocates, before entrusting with them the job of title verification.

47

Annexure - H-1: Memorandum of Understanding with Panel Advocate

THIS MEMORANDUM OF UNDERSTANDING is executed at __________ this _____

day of _____________ 20___

BETWEEN STATE BANK OF INDIA, Local Head Office/Zonal Office _________ having

its office at ___________ for the brevity’s sake hereinafter referred to as said “Bank” of

the One Part;

AND

______________________ Indian inhabitant of ___________ having Office at

__________________ for the brevity sake hereinafter referred to as said

“Advocate/Solicitor/Law Firm” of the Other Part:

OR

M/s. _______________________________, (Legal firm), constituted under Indian

Partnership Act, at _________________ represented by its Managing Partner

____________________ , for the brevity sake hereinafter referred to as said


OR

____________________ Ltd. Company within the meaning of Companies Act, 1956,

and having its Registered Office at __________________ represented by

____________________ , for the brevity sake hereinafter referred to as said


Whereas

The Bank as part of its business has to obtain the scrutiny of title of various immovable

properties of borrowers/ third parties for ensuring a clear, marketable and enforceable

title of such properties; and

The Advocate/Solicitor/ Law Firm is qualified and competent practice and scrutinise the

legal/title/other documents and ready to undertake the scrutiny of title of the properties;

IT IS AGREED BY THE PARTIES AS FOLLOWS:

i. The Bank does hereby engage the Advocate / Solicitor/ Law Firm to take search in

the Office of Sub-Registrar of Assurance and any other Office or authority and to submit

the Search Report and Title Certificate in respect of the immovable property/ies offered

by the client / customer of the Bank as and by way of security to create charge in favour

of the Bank for the repayment of facilities sanctioned or to be sanctioned by the Branch

of the Bank / any office or by Retail Assets Central Processing Centre (hereinafter

referred to as “Branch”).

ii. The Advocate / Solicitor/Law Firm shall pick up the necessary papers, deeds and

documents from the Bank at Retail Assets Central Processing Centre / Branch / Office

of the Bank in respect of immovable property in respect of which the search and title

certificate is to be submitted.

iii. The Advocate / Solicitor /Law Firm shall within two working days (excluding the date

of pick up) furnish to the Bank the title certificate and search verification report after

receipt of the entire papers in respect of property.

48

iv. The concerned Branch for which the title verification of the property is done by the

Advocate / Solicitor/ Law Firm shall pay to the Advocate / Solicitor/ Law Firm

professional fees of Rs. _______ (Rupees ____________________-stipulated amount)

plus actual

Government fees paid and expenses incurred for taking search with various authorities

upon receipt of the title verification report and title certificate against proper stamped

receipt.

v. The Advocate / Solicitor/ Law Firm shall carry out the work of search and title

verification carefully, skilfully and diligently to the best of his knowledge, skill and ability

and shall protect the interest of the Bank by scrupulously investigating and verifying the

title of the property which is offered as security.

vi It is further agreed that in case of delay caused in submitting the report to the bank,

Bank can deduct ten percent of the fee per day basis towards the penalty till the report

is submitted to the bank. It is also agreed that if such default is noticed by the Bank on

three independent occasions, the Bank is free to depanel the Advocate/Solicitor/ Law

Firm without any further notice.

vii. The Advocate/ Solicitor/ Law Firm shall verify the original registered Power of

Attorney and its genuineness and certify its validity and binding nature of the same in

his opinion.

viii. The Advocate / Solicitor/Law Firm shall take all reasonable care in making search at

various Offices, authorities and courts and shall carefully scrutinise the documents / title

deeds entrusted to him in terms of all legal requirements, and shall submit an

unambiguous and clear Certificate of title to enable the Branch / Bank to accept the

security for creation of charge / Mortgage. Any such acceptance of the security and

creation of charge / Mortgage of the property/ies in favour of the Bank, based on the

Certificate of title given by the Advocate / Solicitor / Law Firm should enable the Bank to

enforce the security on default of the Borrower / Guarantor / Mortgager as the case may

be without any legal bar or infirmity. The search at the land Registrar’s office should be

at least for 30 years.

ix. The Advocate / Solicitor/ Law Firm shall also bring to the notice of the Bank any

defect in the title or any other defect whatsoever, which would render creation of

Mortgage / charge invalid and not enforceable and also suggest steps necessary for

perfection of the title.

x. The Advocate / Solicitor/ Law Firm shall also submit a list of documents / title deeds

and other instruments along with his Certificate of title, the deposit of which would

ensure strict compliance with the requirements of Law and procedure relating to a valid

creation of equitable mortgage of the property in favour of the Bank.

xi. The Advocate / Solicitor/ Law Firm shall be responsible for the proper custody of the

documents / title deeds and other instruments entrusted to him and he shall be

responsible / liable for any loss / damage caused to the Bank resulting from the loss,

destruction or damage caused to such document / deeds / instruments, etc.

49

xii. The Bank shall have the right to terminate the arrangement, at any time, with or

without giving any notice, at its discretion on the grounds of incompetency, negligence,

doubtful integrity, undue delay or on any other ground and that the Advocate / Solicitor/

Law Firm shall not use the Bank’s / SBI's name or logo in his visiting cards / Letter

heads, etc.

xiii. The Advocate / Solicitor/ Law Firm shall as far as possible, while scrutinising the title

follow the duties and responsibilities of the Advocates in issuing Certificates of title as

laid down by the Hon’ble Bombay High Court in Ramniklal Tulsidas Kotak Vs. M/s.

Varsha Buildings, AIR 1992 Bombay 62.

xiv. It is agreed that so long as the Advocate / Solicitor/ Law Firm is on the panel of the

Bank for the aforesaid work, the Advocate / Solicitor /Law Firm shall not act or accept

any work against the Bank in any manner whatsoever.

IN WITNESS WHEREOF the parties hereto have hereunto met and subscribed the

respective hand and seal the day and year first hereinabove written.

SIGNED SEALED AND DELIVERED By the Within named State Bank of India, Local

Head Office/ Zonal Office

In the presence of

1. _________________

2. _________________

SIGNED SEALED AND DELIVERED By the within named Advocate/ Solicitor/ Law Firm

______________________________

In the presence of _______________

1. _________________

2. _________________

50

Annexure - I : List of earlier circulars covered in this Master Circular

S. No.

Circular No. Date Subject

1. CCO/CPPD-

EM/27/2005-06

[CPP/KKK/CIR/27 dated

04/07/2005]

12/08/2005 Creation of Equitable Mortgage

Investigation of title.

2. CCO/CPPD-

ADV/38/2005-06

(CPP/NJ/CIR/38 dated

12/08/2005]

30/08/2005 Due diligence exercise in respect of

third party guarantors.

3. CCO/CPPD-

EM/20/2006-07


03/06/2006]

12/06/2006 Investigation of the title deeds for

creation of Equitable Mortgage (EMs) –

Advocate’s Report.

4. CCO/CPPD-

ADV/14/2007-08 dated


04/05/2007]

15/05/2007 Verification of the Title Deeds –

Advocate’s Report.

5. CCO/COOD-

ADV/37/2009-10

[CPP/VSR/CIR/37 dated

30/07/2009]

31/07/2009 Creation of Mortgage. Acceptance of

photocopy/laminated photocopy of title

deeds.

6. CCO/CPPD-

ADV/71/2009-10

[CPP/DMR/71 dated

17/12/2009]

24/12/2009 Mortgage for deposit of Title Deeds.

7. CCO/CPPD-

ADV/49/2011-12

[CPP/SM/CIR/49 dated

28/07/2011]

29/07/2011 Investigation of the Title deeds in case

of sale of property through Power of

Attorney.

8. CCO/CPPD-

ADV/93/2011-12

[CPP/VS/CIR/93 dated

12/12/2011]

13/12/2011 Title Investigation Reports [TIR].

Memorandum of Undertaking (MoU)

with Empanelled Advocates.

9. CCO/CPPD-

ADV/94/2011-12

[CPP/CIR/VS/94 dated

15/12/2011]

17/12/2011 Investigation of Title Deeds. Creation of

Mortgage based on Gift Deed.

10. CCO/CPPD- 06/01/2012 Recommendations of Standing

51

ADV/102/2011-12

[CPP/SS/CIR/102 dated

06/01/2012]

Committee for Brain Storming on

Mortgage/Advances frauds.

11 CCO/CPPD-

ADV/126/2011-12

[CPP/VSR/CIR/126

dated 29/02/2012]

01/03/2012 Investigation of Title Deeds. Power of

Attorney.

12 CCO/CPPD-

ADV/7/2012-13

[CPPD/ARB/CIR/7 dated

30/04/2012]

02/05/2012 Investigation of Title Deeds – Power of

Attorney – Relaxation.

13 NBG/PBU/HL-HOME

LOANS/15/2012-13

[Cir/RE/HL/PM/15 dated

18/06/2012]

21/06/2012 Personal Banking Home Loans –

Investigation of Title Deeds – Power of

Attorney – Clarifications.

14 CCO/CPPD-

ADV81/2012-13

[CPP/SGS/CIR/81 dated

31/10/2012]

31/10/2012 Investigation of Title Deeds for creation

of Equitable Mortgage (EMs) –

Advocate’s Report

15 NBG/PBU/HL-HOME

LOANS/38/2012-13

[CIR/RE/HL/PM/38

dated 24/11/2012]

26/11/2012 Real Estate, Habitat & Housing

Development, Home Loans –

Investigation of Title Deeds – Sale of

Property through Power of Attorney

(PoA)–Builders, Companies /

Firms/Individual Proprietary Concerns.

16 CCO/CPPD-

ADV/105/2012-13

[COO/CIR/VSR/105

dated 28/12/2012]

28/12/2012 Mortgage of Immovable Properties –

Identification of Properties.

17. NBG/S&P-MISC/4/2012-

13[Dept. No.

[S&P/AMW/381

dated13/03/2013]

13/03/2013 Title Investigation Report for High Value

Loans.

Tir Master Circular

Documents

Transcript of Tir Master Circular