Stamp Duty on Consortium Documents
Mandar Saraf
(Querist) 04 April 2017
This query is : Resolved
My company has entered into a Legal mortgage agreement with a Bank X and paid the required stamp duty for a certain set of properties. Further it also decided to enter into agreementation for the same set of properties with Bank Y and Z. Bank X is of the opinion to appoint a trustee and execute a Consortium document consisting of all 3 banks (Indenture of Mortgage) for this purpose. My question is that will stamp duty be payable again on the amount borrowed from bank X for which the Documentation is already done or do I just need to pay the stamp duty on the amount to be borrowed from Y and Z. Also can I get an adjudication done and get a relief or refer to any case laws.
Rajendra K Goyal
(Expert) 04 April 2017
Generally the property is mortgaged with the leader of the consortium and shared on paripasu basis with the members of the consortium.
Equitable mortgage does not attract much expenses.
May proceed as suggested by the Bank.
Since this is a commercial transaction involving huge loan, better have professional advice.
Sri Vijayan.A
(Expert) 04 April 2017
Here, the change of parties (Banks) occur as compared to the old mortgage deed. As such, the second one is a new deed and attracts separate registration and its costs.
But dont fail to cancel the earlier mortgage deed and mention in cancellation deed or in the new mortgage that the earlier mortgage deed has lost its validity because of the new mortgage deed.
Regards
Mandar Saraf
(Querist) 05 April 2017
Sir, So basically stamp duty and registration charges will be payable on the entire amount for all the 3 banks once again?
Rajendra K Goyal
(Expert) 05 April 2017
It seems the query is academic.
Seems fundamentals of consortium are not clear to you.
What is your post in the company?
Mortgage the property in favor of consortium leader.
Mandar Saraf
(Querist) 06 April 2017
Sir I'm just trying to clarify my doubts w.r.t the case law CCRA vs Costal Gujarat. It clearly specifies that the duty shall be payable into number of times the consortium lender. My client has already paid the Stamp duty on the amount borrowed from Bank A in a seperate mortgage deed. Now merely by inclusion of the same amount in the New consortium Indenture of Mortgage will the stamp duty or payable on the same again?
Mandar Saraf
(Querist) 06 April 2017
Sir I'm just trying to clarify my doubts w.r.t the case law CCRA vs Costal Gujarat. It clearly specifies that the duty shall be payable into number of times the consortium lender. My client has already paid the Stamp duty on the amount borrowed from Bank A in a seperate mortgage deed. Now merely by inclusion of the same amount in the New consortium Indenture of Mortgage will the stamp duty be payable on the same again?
Sri Vijayan.A
(Expert) 06 April 2017
Yes, it is a separate document as far as the registration department is considered.
So you have to pay the stamp duty and registration fee.
At the same time, dont forget to cancel the old mortgage deed.
