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Registration of charge

(Querist) 23 March 2012 This query is : Resolved 
Dear Members,

Whether registration of charge for immovable property by a company is compulsory under Registration Act 1908. Considering this that it is just as security for the bank? As far as Company Act, I Know it requires registration under section 125 of Companies Act 1956)

Further, Section 17 of Registration Act 1908 states that;

(b) other non- testamentary instruments which purport or operate to create,declare, assign, limit or extinguish,whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property;

Kindly go through the above sub- section and post your valuable reply.
Anirudh (Expert) 25 March 2012
Dear Mr. Alok,
If it is equitable mortgage, then in the notified areas, it is enough if the documents are deposited with the creditor. However, now a days from April 2011, even such Equitable Mortgage is required to be compulsorily registerd with an Authority created under the SARFAESI Act.

If it is not equitable mortgage, but creation of charge on an immovable property, then Section 100 of TP Act will come into play. The charge is required to be compulsorily registered under Sec.17 of the Registration Act, 1908.
M V Gupta (Expert) 27 March 2012
I agree with Mr. Anirudh. Section 100 of the TP act dealing with charge provides-" and all the provisions herein before contained which apply to simple mortgage shall, so far as may be, apply to such charge". the Act requires that simple mortgage can be created only by a written instrument duly registered. Further, Section 17 of Registration Act reproduced by you clearly provides that any non testamentary instrument which purport to or operate to create ----- any right ----of the value of one hundred and upwards to or in immovable property". Hence if the charge is for more than Rs. 100/- then it should be by a written instrument duly registered.


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