Can mortgage be created by depositing unregistered agreement for sale?
K.K.Ganguly
(Querist) 29 December 2012
This query is : Resolved
As per SARFAESI Act,2002 & T.P. Act, an equitable mortgage must have the following ingredients:
1) A debt,
2) Deposition of Title Deed with the creditor,
3) Intention to create a mortgage of the property.
Now, one of my client having a registered Title Deed of his flat, has recently received a Notice from the Recovery Officer of DRT asking him to vacate the Flat immediately & on enquiry he found that one person had fraudulently, in collusion with the Developer, made one Agreement for Sale with the Developer before the property was registered in the name of my client by the Developer & had deposited the same with a Bank & collected loan amount which he never paid for which the Bank had filed one O.A. Application as per RDDB Act without any knowledge of my client. He had no scope to know about this fraudulent act of the said borrower who is now absconding.
My question is:
a) Can the Bank create equitable mortgage by accepting unregistered Agreement for Sale?
b) Since the O.A. Application has already been decided by the P.O. of DRT and the Recovery Officer has been instructed to recover the outstanding of the borrower who fraudulently deposited the Agreement of sale of the property which actually belongs to my client as my client had registered the Sale Deed in his favour, can my client go to the DRT now for any relief?
c) I have already filed an application u/s30 of RDDB Act. Can I expect DRT to review & withdraw his earlier Order to recover the dues?
I would request the Ld. Experts to kindly give their valuable opinions.
ajay sethi
(Expert) 29 December 2012
equitable mortgage is created by deposit of title deeds , It is not necessary in order to create an equitable mortgage that all the title-deeds should be deposited. If the deeds are material evidence of title and are proved to have been deposited with intention of creating a mortgage, it is sufficient; nor is it necessary that the deeds deposited should show a good title in the depositor.
you have to take out an intervenor application before RO for stay and setting aside order of attachment of the flat in recovery proceedings . rely upon regd agreement executed in your favour by the developer .
file case of cheating aginst the devloper .
Anirudh
(Expert) 29 December 2012
This query is the best example, as to how the fact should not be narrated. Practically the fact has been narrated in query in one sentence, of course interspersed with commas.
R.K Nanda
(Expert) 29 December 2012
agree with expert Sethi.
Raj Kumar Makkad
(Expert) 30 December 2012
Gamguly Sir! No recovery can be effected against your client and the order seeking vacation of the duly owned property of your client is highly erroneous in the light of given facts. banks cannot mortgage the property just on the basis of agreement to sale unless and until its lawful owner submits his duly owned affidavit to the banker at that time confirming his desire to do so.
You should file a review application before DRT and should seek interim stay order against execution.
