The transfer of immovable property by way of sales, gift,will, releases etc. presupposes that documents to the title of transferred
immovable property are delivered to the transferee on completion of process.
This is statutory obligation. Section No. 55(3) of Transfer of Property Act,
casts this responsibility on the seller. But the section has a proviso that in
case where only a part of the property is sold and the seller retains a part of
the property the seller is entitled to retain the original documents, and
copies of such documents are delivered to the purchaser.
In case,
where the property is transferred to different persons, in different lots, the
transferee of greatest portion is entitled to hold the documents of title and
others are provided with copies of such documents.
In the
circumstances dealt above, the persons holding the documents either the seller
or one who hold the greatest portion has some responsibilities. He has to keep the
documents in safe custody and in good condition. He has to make available the
documents for inspection to other buyers, and also furnish the true copies of
such documents; extract from such documents, whenever required.
But the cost has to be met by the buyer who needs such
inspection or copies, extracts. Those responsibilities are required to berecorded properly.
The
document, which records such obligations of safe keeping the documents;
producing them for inspection, providing copies, extracts is called “Deed of
covenant for production of documents.”
The deedof transfer like sale, gift, will, and release may contain such a covenant by
the vendor in favour of purchaser or a separate deed may also be executed by
the vendor in favour of purchaser.
In case
of the person holding greatest portion, a separate covenant deed about his
obligations becomes necessary. A separate deed in favour of each of other
transferee of other portions or a common deed in favour of all other
transferees jointly may be executed.
In the
deed of transfer of the greatest portion or of highest value an explicit
covenant, that, the transferee shall safe keep the documents in good condition,
produce for inspection of other transferee and furnish true copies or extract
should be included. Similar relevant covenant should also be incorporated in
deed of transfer of other transferees.
Generally
all the portions of the property are not transferred at the same time, and the
above suggested procedure may not be possible. In such cases, the transferor
should give a covenant of production of documents in each of the deeds of
transfer and it should further provide that if and when the transferor handsover the documents to any other transferee at a later date he would procure a
similar condition from the such transferee. Under a covenant of production of
document, the original covenantor remains liable indefinitely unless a
condition provides that he is no more responsible after he parts with the
remaining portion of the property.
Stampduty: In case the condition is included in
the deed transfer itself, no separate stamp duty is payable. If a separate deed
is executed, it attracts the stamp duty as that of an agreement depending uponthe stamp duty prescribed by the state.
Registration:
This deed of covenant does not require the registration, but it is advisable to
get it registered.
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