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sachin katariya (advocate)     27 November 2009

Mortgage property sold

One litigation is that three persons executed equitable mortgage in favour of bank, no charge created over relevant revenue record , subsequently the mortgager sold the property. they denied the execution of mortgage.  we are for mortgagee what will be our stand in that case?


 5 Replies

niranjan (civil practice)     27 November 2009

If you are bank you must have the documents of mortgage,so there cannot be any question of denial.You can start recovery process.

Murtaza Chherawala (Proprietor)     28 November 2009

A mortgage is a first charge over the property. Even a subsequent sale cannot nullify the mortgage and the mortgagee (financial institution) shall have a charge over the property prior to the third party purchaser.

The third party purchaser however shall claim the status of a bonafide purchaser, which has to be countered in court and based upon the facts of each case.

snchandrasekarabharathi (senior manager (Law))     29 November 2009

After the enactment of T. P. Act, the nomenclature of EM is wrong.  It is mortgage by deposit of title deeds.  So if the mortgagor has deposited the original title deeds with your client with intent to create mortgage, then the subsequent encumbrnce created by the mortgagor is subject to your mortgage only. 

If the amount payable by the mortgagor is Rs. one lakh and above and the account has become NPA, then yourclient can invoke the provisions of the SARFAESI Act and bring the secured asset for sale without waiting for an adjudication.

H.D.Kumaravelu (Advocate)     30 November 2009

snchandrasekarabharathi is perfectly correct. No more explanation is needed for the query.

K. Rajendra Prakash (Advocate)     30 November 2009

I fully agree with Mr. snchandrasekarabharathi.

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