dipali (labour consultant) 17 October 2019

conversion of equitable mortagage to legal mortagsgr

Equitable mortagage is already created to cover advance but in TCR it is recommended for legal mortagage. How to go for legal mortagage when equitable mortagage is already created on the said property? On making inquiry with registration authority, it is advised to get equitable mortagage settled and then go for creating legal mortagage afresh. This procedure involves double stamp duty to be borne by the party. Is there any way out? Can we resort to rectification/addendum to rectfy thr error? please have your legal opinion and procedure to be followed up.

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G.L.N. Prasad (Retired employee.) 18 October 2019

There must be a communication gap. If all original title deeds are available with EC and if the memorandum is already registered, another mortgage may not be necessary in general. But, where documents are not perfect (Lack of original link documents, the scope for claimants etc) depending on the necessity, bank as per the advice of sanctioning authority or Audit authority must follow their directions. While accepting security, banks follow legal opinion given by their counsel and follow them. Finally, the borrower has to follow the terms and conditions of a lender.

If the documents are perfect with such a legal opinion of registration of memorandum, the borrower can write to the lender for exemption and make efforts to impress lender that the present precautions are enough.

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dipali (labour consultant) 18 October 2019

In the instant case, the bank is bent upon for legal mortagage whereas the equitable mortagage is already done Now if borrower is ready for legal mortagage as per lawyer's TCR. How to proceed? /Is it necessary to first release the Equitable mortagage and then to create go for legal mortagage,? Is it necessary to mention all documets in legal mortagage deed? I thank you for your advice but my query is as above. Kindly apprise me of your valuable suggestion

G.L.N. Prasad (Retired employee.) 18 October 2019

Meet Bank's advocate in person if your efforts in convincing the bank through grievance in their on line fail to yield any result. It can be mentioned in the deed itself that it was already offered through EM and as per revised terms this legal mortgage is being done. He can guide and explain to you the necessity.

In EM memorandum, generally no one mentions the Advance amount and it can be used for additional borrowing if the security is several times more than the borrowed amount. In the case of LM, they specifically mention the advanced amounts.

My presumption is that there may be some missing original or link documents deposited by you. In fact you have a right to seek the same information under RTI from your Banker the following query but I will never advise you for that as many authorities consider RTI is a threat or questioning their authority.

Information sought: Sanction No...............................for Rs...............................Branch:...........................Name of the borrower.

Information solicited:

1. Please provide the reasons for a legal mortgage, when there was already an equitable mortgage through the deposit of original documents. as per legal opinion.