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Vibhav   24 August 2024

Can the requirement of registration be waived when providing an immoveable property as collateral?

Is an Affidavit that provides for an immoveable property as collateral but states that the requirement of registration is waived valid?

Please answer with specificity giving precise Act and Section under which you conclude that it is valid or not valid. A Supreme Court judgement would be superb! 

Will be eternally grateful for giving precise answer.

Thanks



Learning

 6 Replies

T. Kalaiselvan, Advocate (Advocate)     25 August 2024

If you want specific answer or precise opinion then you may have to post the question with some details to understand your intention and reason to render proper opinion. 

Your question is devoid of details. 

Vibhav   25 August 2024

Here is the Affidavit that I want to check if it will be valid without registration:

I, Mr. A. Patel, Residing at .... Ahmedabad, Gujarat.., ... agrees to the following:

I want to borrow Rs. .....  from Mr. M. Shah at interest rate of ...% per annum.

I own a flat in ... which is valued at ... by a government certified valuator and it is attached here.

I am presenting the following guarantee/collateral:

I agree that if I sell my flat, I will first satisfy the loan obligation to Mr. M. Shah from the sale proceeds.

I agree that this Affidavit, though not registered, has the full force of law. I voluntarily waive defenses for lack of formal registration.

 

T. Kalaiselvan, Advocate (Advocate)     25 August 2024

The unregistered affidavit is not enforceable in law hence it will not be accepted as collateral security for the loan.

If in case of mortgage loan the deed should be executed by a registered document in which the collateral security details will be mentioned 

1 Like

N.K.Assumi (Advocate)     25 August 2024

Affidavit is not an agreement, it is only a uniliteral act and no unilateral act can create ownership or possession of property. If you want to create equitable mortgage, pawn or pledge to Mr.M.Shah, you have to give him the necessary documents of your title to M.Shah, and not simply an affidavit, but if Mr.M.Shah, accept your affidavit and gives you money depending on your affidavit that is well and good for you, and I dont see any reasons why anyone should object to it.

1 Like

Vibhav   25 August 2024

Thank you both.

The  money was already loaned and is due now but the borrower is reneging. Can it be recovered now based upon this Affidavit?

N.K.Assumi (Advocate)     26 August 2024

Yes, you can file money suit against him, and the burden of presumption and proof is upon you to make your evidence asmissible in court. All the best.

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