Report No. 178
2. Amendment of Indian Penal Code(45 of 1860.-
In the Indian Penal Code, after section 424, the following sections shall be inserted, namely:-
Of Offences Relating to Certain Transactions Involving Immovable Property
424A. Failure to inform transferee of immovable property regarding prior transactio.- Whoever, having entered into any prior transaction or having created any prior encumbrance in relation to immovable property or having knowledge of the existence of such prior transaction or encumbrance, enters into a subsequent transaction or creates a subsequent encumbrance in favour of another person in relation to or affecting the whole or any part of such property an.-
(a) knowingly fails to bring the existence of such prior transaction or prior encumbrance to the notice of such other person; or
(b) knowingly fails to include a recital in regard to the existence of such prior transaction or prior encumbrance in any subsequent instrument executed in relation to the whole or part of such property with such other person, shall be punished with imprisonment for a term which shall not be less than one year but which may extend to three years and shall also be liable to fine.
Explanation:- sale, agreement of sale, exchange, mortgage, lease, charge, or right to possession in relation to land or land with buildings or flats already in existence or buildings or flats proposed to be constructed shall be a "transaction" or "encumbrance" within the meaning of this section.
424B. Failure to inform transferee of immoveable property about pendency of litigatio.- Whoever knowingly executes any instrument-
(a) which is or purports to be a transfer of immovable property or any interest therein;or
(b) which is or purports to be an agreement to transfer any immovable property or any interest therein; or
(c) which creates or purports to create a charge over immovable property, and
(i) fails to refer to the pendency of any suit or proceeding, in which any right to such property is in question, in the said instrument; and
(ii) executes such instrument without the authority of the court in which any suit or proceeding in relation to or affecting the whole or any part of such property is pending, shall be punished with imprisonment for a term which shall not be less than one year but which may extend to three years and shall also be liable to fine."