Most buyers, when they ask for property documents, receive what the seller chooses to provide.
The registered sale deed in the seller’s name. A copy of the Encumbrance Certificate for a limited period. Perhaps the original registration receipt. Sometimes an older title document showing how the seller acquired the property. These documents are organized, presented, and accompanied by an assurance that everything is in order.
What buyers rarely receive is what the public record independently discloses about the property, regardless of what the seller wants to show.
Dr. Sravan Kumar, author of The Indian Law of Property Due Diligence and Title Examination, builds an entire methodology around this distinction. Documents produced by the seller are the starting point of due diligence. They are never the end of it.
What the Encumbrance Certificate actually discloses:
The Encumbrance Certificate issued by the Sub-Registrar’s office discloses all registered transactions affecting the property during the period covered by the certificate. A mortgage registered in the office appears in the EC. A prior sale agreement registered as a notice appears in the EC. An attachment order served on the registrar appears in the EC.
If the buyer does not obtain and examine an EC covering the full title examination period, they have not examined the encumbrance position of the property. They have accepted the seller’s representation about it.
These are different things. And Indian property law treats them differently. Section 3 of the Transfer of Property Act, 1882 defines constructive notice. A buyer has constructive notice of every registered instrument affecting the property. This notice is deemed received regardless of whether the buyer examined the register. A buyer who takes property subject to a registered mortgage, having failed to examine the EC, takes the property subject to that mortgage. The law provides no relief on the ground that the seller did not mention it.
What the CERSAI search discloses that the EC does not:
Equitable mortgages created by deposit of title deeds are registered in the CERSAI system maintained by the Central Registry of Securitisation Asset Reconstruction and Security Interest. These do not appear in the Encumbrance Certificate from the Sub-Registrar’s office.
A buyer who conducts only an EC search has not completed the encumbrance verification process. A buyer who conducts both an EC search and a CERSAI search has a substantially more complete picture of whether the property carries any existing security interest.
The gap between these two searches is not technical detail. It is the space through which a bank with a registered equitable mortgage can exercise its rights against a buyer who never knew the mortgage existed.
The Indian Law of Property Due Diligence and Title Examination by Dr. Sravan Kumar is available on Amazon, Flipkart, Kindle, and Google Books. Buy now and learn which public records you need to examine before trusting any property purchase.
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