Title Due Diligence Before Buying Property in Mumbai

A flat or office in Mumbai is usually the largest single purchase a family or business makes, and the purchase price is paid against paper. The seller produces an agreement, an index extract, a property card, a share certificate and a title search report, and the buyer is invited to treat the bundle as proof of ownership. Title due diligence in Mumbai is the exercise of testing that bundle: checking that each link in the chain actually transferred title, that nothing registered elsewhere burdens the property, and that the land itself can be transferred. This article explains the red flags that most often surface, and why a clean search report is not always the same thing as a clean title.

Start with the right search period and the right offices

Title searches in Mumbai conventionally cover at least the preceding thirty years of registered documents in the offices of the Sub-Registrar of Assurances, so that the chain of title can be traced across several transfers. A search confined to the seller’s own purchase deed tells you little about whether the seller’s vendor had title to pass.

A complete search typically also looks beyond the Sub-Registrar:

• the revenue records (the 7/12 extract for agricultural or non-city-survey land, and the property card in city survey areas);
• the Central Registry for security interests (CERSAI);
• the project’s page on the RERA regulator’s website, for new or recent projects;
• court and tribunal records for litigation affecting the property or the seller; and
• a public notice inviting claims, usually in an English and a vernacular newspaper circulating in the area.

Red flag one: treating mutation as title

Entries in the 7/12 extract or the property card often show the seller’s name. That is useful, but it is not proof of ownership. The Supreme Court has held repeatedly that mutation entries in revenue records are maintained for fiscal purposes, principally the collection of land revenue, and neither create nor extinguish title.

• In Sawarni v. Inder Kaur, (1996) 6 SCC 223, decided on 23 August 1996, the Supreme Court held that mutation in favour of a person does not confer title on him; it only enables the person in whose favour it is made to pay land revenue.
• In Jitendra Singh v. State of Madhya Pradesh, decided on 6 September 2021 by Justices M.R. Shah and Aniruddha Bose, the Court reiterated that a mutation entry does not confer any right, title or interest and is only for fiscal purposes, and that a person claiming title, for example under a will, must establish it before the civil court.

The practical consequence is that a revenue entry must always be traced back to a registered instrument, a decree or a valid succession. Where an entry was made on the basis of an unprobated will or a family arrangement, the title behind it needs separate examination.

Red flag two: a chain built on SA/GPA/Will

Older Mumbai properties sometimes carry a link where, instead of a registered conveyance, the transfer was effected through an agreement for sale, an irrevocable general power of attorney and a will in favour of the purchaser. In Suraj Lamp & Industries (P) Ltd. v. State of Haryana, decided on 11 October 2011 by Justices R.V. Raveendran, H.L. Gokhale and A.K. Patnaik and reported at (2012) 1 SCC 656, the Supreme Court held that such SA/GPA/Will transactions do not convey any title nor create any interest in immovable property, and that immovable property can be legally and lawfully transferred only by a registered deed of conveyance.

Two clarifications from the same judgment matter in practice:

• The Court made clear that its observations were not intended to affect the validity of sale agreements and powers of attorney executed in genuine transactions, such as a power of attorney given to a spouse or relative to manage affairs or to execute a conveyance.
• Such transactions may still be used to seek specific performance or to defend possession under Section 53A of the Transfer of Property Act, 1882, and those entered into before the judgment could be relied on to apply for regularisation by development authorities.

None of this cures the title. A buyer who finds an SA/GPA/Will link in the chain should expect it to be regularised by a registered conveyance from the person who holds title, or that person’s heirs, before completion.

Red flag three: an unregistered link

Registration is not a formality in this context.

• Section 17(1A) of the Registration Act, 1908, inserted in 2001, requires documents containing contracts to transfer immovable property for consideration, for the purposes of Section 53A of the Transfer of Property Act, to be registered if executed on or after the commencement of the amending Act. If they are not registered, they have no effect for the purposes of Section 53A. An unregistered agreement therefore cannot found a part-performance defence.
• Section 4(1) of the Maharashtra Ownership Flats Act, 1963 requires a promoter, before accepting any advance or deposit (which may not exceed twenty per cent of the sale price), to enter into a written agreement for sale with each flat purchaser, and requires that agreement to be registered under the Registration Act. After the 2025 amendment, MOFA largely does not apply to RERA-registered projects, so this matters mainly for buildings outside RERA.
• Section 13(1) of RERA prevents a promoter from accepting more than ten per cent of the cost as an advance or application fee without first entering into a written agreement for sale and registering it.

When reviewing a flat’s chain, each agreement from the original allotment onwards should be checked for registration. A missing registration is a gap in the chain, not a clerical defect.

Red flag four: a charge visible only on CERSAI

Banks and financial institutions register security interests with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI). Section 26D of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in force from 24 January 2020, provides that no secured creditor is entitled to exercise rights of enforcement under Chapter III of that Act unless its security interest has been registered with the Central Registry.

Two consequences follow for a buyer. First, a lender that has registered on CERSAI is in a position to enforce under SARFAESI, so a CERSAI search is essential. Second, a mortgage by deposit of title deeds does not require a registered mortgage deed, so a Sub-Registrar search alone may not reveal it. A seller’s assurance that the original title deeds are with him should be tested against a CERSAI search and a written confirmation from any lender.

Red flag five: leasehold land and the lessor’s consent

Many Mumbai buildings stand on land held on lease from the Collector, MHADA, CIDCO or other public bodies, or on land held on restricted tenure. Government-granted land held on Occupancy Class II or leasehold tenure is not freely transferable, and the Collector’s prior permission is generally required for transfers. The Maharashtra Land Revenue (Conversion of Occupancy Class-II and Leasehold lands into Occupancy Class-I) Rules, 2019, notified on 8 March 2019, provide for conversion to freely transferable Occupancy Class I on payment of a premium.

Leases granted by MHADA and CIDCO usually require the lessor’s consent, and often a transfer premium or charge, before a transfer. The terms of the lease deed, and any permission granted for previous transfers, should be examined. A transfer made without a required consent can expose the buyer to demands for premium or to action by the lessor.

Red flag six: a mortgage created after your agreement

For a RERA-registered project, Section 4(2)(l)(B) of RERA requires the promoter to declare whether the land is free from encumbrances or to give details of them, and these appear on the project’s registration page. Section 11(4)(h) provides that after executing an agreement for sale for a unit, the promoter shall not mortgage or create a charge on it, and that any such mortgage or charge, notwithstanding any other law, shall not affect the right and interest of the allottee. The protection is strongest for a purchaser whose agreement is registered and who has paid into the account designated for the project.

Society records: share certificate and transfer

In a co-operative housing society, the purchaser acquires the seller’s shares and interest in the society along with the flat. The society’s records should therefore be reconciled with the title chain:

• the original share certificate standing in the seller’s name, and the history of earlier transfers endorsed on it;
• confirmation from the society of outstanding dues and of the seller’s membership; and
• where the society has not yet obtained a conveyance of the land and building, the status of the conveyance, since the society’s own title affects every member’s.

Frequently Asked Questions

Is the 7/12 extract or property card proof that the seller owns the property?

No. In Sawarni v. Inder Kaur (1996) and Jitendra Singh v. State of Madhya Pradesh (2021), the Supreme Court held that mutation entries are for fiscal purposes and neither create nor extinguish title. They must be traced to a registered document, a decree or a valid succession.

Can I buy a flat where an earlier owner acquired it on a power of attorney and will?

The link is a red flag. In Suraj Lamp & Industries v. State of Haryana (2011), the Supreme Court held that SA/GPA/Will transactions do not convey title, and that immovable property can be transferred only by a registered conveyance. The defect should be regularised before completion.

Why search CERSAI when the Sub-Registrar search is clean?

Because a mortgage by deposit of title deeds may not be revealed by the Sub-Registrar’s records alone, while a lender must register its security interest with the Central Registry to enforce under SARFAESI, as Section 26D provides.

How far back should a title search go?

Title searches in Mumbai conventionally cover at least the last thirty years. Older documents may also need to be examined where the chain cannot be traced within that period.

Does a leasehold flat need any special permission to buy?

Often, yes. Transfers of land held on Occupancy Class II or leasehold tenure from the Collector, and many MHADA and CIDCO leases, require the lessor’s prior consent and may involve a premium or transfer charge.

This article is for general information and is not legal advice.

This article is for general information only and is not legal advice or an invitation to engage the firm. Laws and judgments change; please obtain specific legal advice before acting.