What is Legal Scrutiny Report or Search Report or Title search Report For Loans

In the aftermath of COVID-19, when economic condition not only of the nation but also of the Individuals has been disestablished. Everyone requires financial support, Whereas there are various means for the government to bolster the economy. Individuals either take the loans from the money lenders at an exorbitant rate of interest or he may borrow from the Financial Institutions Such as Banks or NBFC's (Non-Banking Financial Companies). For the loan/debt by the banks, they often ask for the various documents viz. Identity card, Bank Statements, PAN Card and Legal Scrutiny Report, etc. Among these documents, the most prominent is the Legal Scrutiny Report. Herein I will deal with various facets of the legal scrutiny report.

 

What is Legal Scrutiny Report (LSR) or Search Report or Title Search Report (TSR)

Legal Scrutiny Report is an account of immovable property (Which may be offered as collateral security or on which charge or mortgage sought to be created) prepared by the designated Advocate of the Bank, Howsoever Certain Banks permits this account to be prepared by any advocate of the client's choice. In this Report Advocate while investigating the documents relating to the property gives his opinion on various aspects viz. 

 

1. Whether the Person sought to create charge/mortgage or offering the immovable property as collateral security is the owner of it?

2. If he is not the owner then in what capacity he holds the property? e.g. he may be occupancy tenant or lessee of the property.

3. By which transaction such person became the owner of the property or acquired an interest in the property? e.g. by inheritance or self-occupied.

4. Whether there is any prior encumbrance on the property?

5. Whether Property is free from all type of dues?

6. Whether Property is subjected to any acquisition proceedings under any law for land acquisition for time being in force?

7. Whether the Property is affected by any local laws or other regulations having a bearing on the creation of the security? e.g. Agricultural Laws, SEZ Regulations, Coastal Zone Regulations, Environmental Clearance, etc.

8. In the case of Building or Flat, Whether all the Modalities as to Real Estate (Regulation and Development) Act, 2016 (RERA) have been complied with?

9. Whether any litigation is Pending regarding the property?

10. Whether any assessment/recovery proceeding has been pending under the Income Tax Act,1961 against the person concerned?

11. Whether any Proceedings under Insolvency and Bankruptcy Code,2016 is pending against the concerned person?

12. Whether the property is SARFAESI (The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002) compliant?

 

Documents required for the Legal Scrutiny Report (LSR) or Search Report or Title Search Report (TSR)

 

1. Sale-Deed/ Partition Deed/ Will as the case may be. 

2. Khasra/Khatauni Or Any document containing a record of rights. e. g. in Madhya Pradesh Rin Pustika is Prepared for individuals containing a record of right. 

3. Revenue Receipts duly given by Municipal Corporation Or Municipal Council as the case may be. 

4. No Objection Certificate (NOC) issued by the Income Tax Department. (In case assessment/recovery proceedings commenced against the concerned person)

5. An Affidavit to the effect that there is not an encumbrance on the property, this affidavit to be made by the concerned person.

 

What Procedure adopted by the Advocates for making Legal Scrutiny Report (LSR) -

 

After perusal of the above-mentioned documents, advocate applies for the Search Procedure in the Registrar Office Where the instrument (Sale-deed/ Will/ Partition-deed) relating to concerned immovable Property has been registered. In the registrar office, advocates search as to Chain of Titles relating to the Property usually of a period of the last 30 years. 

After making this search and assessment of the requisite documents, He submits his Report to the bank While answering the above-mentioned questions. 

 

Conclusion -

The Legal Scrutiny Report or Search Report helps the banks to assess whether any prior encumbrance exists on the immovable property and in what capacity the concerned person holds the immovable property. Banks after perusal of the Legal Scrutiny Report Submitted by the Advocate and considering other relevant factors may either grant or refuse to grant the loan.  

(This Article deals with the cases when loans are granted in Individual Capacity)

By 

Nilesh Mulatkar


Comments

  1. Aman Soni19 July 2020 at 08:56

    Informative article.

    ReplyDelete
  2. Stewe Smithz30 September 2022 at 04:34

    Upon the death of an individual who did not leave a testament when they died, the property would be passed on by their legal heirs (by inheritance), who would then distribute their share to other heirs or co-owners who were not originally decedents.
    Relinquishment Deed

    ReplyDelete

Post a Comment

Popular posts from this blog

Does it end?  The struggle of LGBTQ in India With the recent verdict of the Hon'ble Supreme Court in Navtej Singh Johar & Ors. v. Union of India which Partially Struck down the 158 year old archaic colonial provision i.e. Section 377 of Indian Penal Code,1860 (IPC) as being violative of Article 14 (Right to Equality) and Article 21 (Right to life and personal liberty) of the Constitution.  Indians got their third major freedom i.e. Freedom of choice after this historic verdict. While two previous freedoms were procured earlier viz. freedom from colonial era in 1947 when India become independent and another one economic freedom when LPG (Liberalization, Privatization and Globalization) was introduced in 1991.   The interesting fact is that England which burdened Indians with this archaic rule has decriminalized homosexuality in 1960's by "Sexual Offenders Act, 1967".  Section 377 of the IPC states: “Whoever voluntarily has carnal inter­course agains...
Read more

Elephant killed in Kerala: What punishment may be given?

Image
On the eve of "World Environment Day" (June 5), While I am writing this article a Heart Wrenching tragedy is reported from Kerala wherein a pregnant elephant was brutally murdered by some locals. It is alleged that some locals fed her a pineapple stuffed with crackers that caused the death of the elephant. Here in this column, I will discuss the legal aspects that deal with the killing of wild animals .   What does the Constitution say?   Article 48-A of the Indian Constitution casts a  duty on the state to protect, safeguard, and improve the forests and wildlife of the country.  Article 51-A (g) a fundamental duty has been imposed on every citizen of India to protect and improve the natural environment including forests, lakes, rivers, and wildlife and to have compassion for living creatures .  (Both the provisions were added in the constitution by 42nd amendment, 1976 during Emergency Era )   What do  other laws say?  ...
Read more

PANDEMIC AND LAW

With the outbreak of coronavirus (officially termed as COVID-19 by WHO) the certain regulations are needed to be understand.   The international provision through which WHO has declared COVID-19 as the pandemic it is the  International Health Regulations,2005.  Now if we discuss the constitution of India public health has been dealt under Article 47 which directs the state to   " to raise the level of nutrition and the standard of living and to improve public health as among its primary duties".   Also the honorable supreme court in Parmananda katara's   case ruled that "Right to health is an integral part of right to life enshrined under article 21 of Indian constitution". Thus, it is a moral and constitutional obligation of state to protect the populace of its country from the pandemic.  WHO suggested various ways to contain this pandemic among them isolation is thought to be best in pursuance of which our government has taken a ve...
Read more