Tpa/ mortgage rights

Agniva Ghosh (Querist) 17 May 2024 This query is : Resolved
Company "A", a PSU, is the owner of the land, which decides to lease the same to company "B" for a period of 60 years. Company "B" after taking necessary permission decides to sublet part of the property to company "C". The period of sub-lease is not decided yet. Company "C" now wants to avail finance from bank. Can company "C" let bank create equitable mortgage on the subleased property, considering company "C" has taken no objection certificate from the owner and the original lease holder?

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This discussion examines whether Company C can create an equitable mortgage on a property it has subleased from Company B, with Company A being the original landowner. While legally possible under certain conditions, including having a valid sublease agreement and exclusive usage rights, the bank's credit policy is the ultimate deciding factor. Company C is advised to approach the intended bank directly for their specific requirements and opinion.

T. Kalaiselvan, Advocate (Expert) 17 May 2024
The borrower must have a valid (Sub)lease agreement in place with the lessor/lessee, and it should be in force for a minimum specified period. The period also decides the grant of the loan. Further, to be eligible for the loan the borrower should have exclusive rights to use the property as per the terms of the sub lease agreement.

kavksatyanarayana (Expert) 17 May 2024
Is Company A leased the property to Company B, but in the lease deed, is it mentioned that Company B can sublease the property?

SIVARAMAPRASAD KAPPAGANTU (Expert) 19 May 2024
The question appears to be academic. Can Company C create valid equitable transaction, legally yes, subject to certain conditions. But the question is better answered by the bank according to it's credit policy. Let Company C (if it really exists) approach intended bank and get Bank's opinion.

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