Extension of charge by equitable mortgage
Sanjeev Gupta
(Querist) 02 January 2016
This query is : Resolved
A person created registered mortgage in favour of bank as security to credit facilities. However, later on he applied for additional facilities and bank wants to extend charge for additional facilities against already mortgaged property. Please help whether bank can accept additional charge (extension of charge) by way of equitable mortgage or it has to compulsorily obtain simple (registered mortgage). Any judgment if referred on this issue will be of additional help.
P. Venu
(Expert) 03 January 2016
What is the opinion of the Bank's lawyers?
K.S.Srinivas
(Expert) 05 January 2016
The instrument of deposit of title/deed/Equitable Mortgage is compulsorily registrable under Section 17(1)(c) of the Indian Registration Act, 1908.
Rajendra K Goyal
(Expert) 05 January 2016
There exist no equitable mortgage in the present case, but is registered mortgage. Extension need to be through registered mortgage.
T. Kalaiselvan, Advocate
(Expert) 10 January 2016
Whatever judgement you may extract cannot speak the rules involved in it to the bankers because this will help only a court case and not solve bank loan problems. So why do you want to ask for judgement?
Aditya
(Expert) 10 January 2016
The Borrower has to approach the old lenders to give a NOC for creation of second charge in favour of the new lenders.
Without the noc even if a new charge is created it will not be valid, and because EM has been created already so sharing of charges by way of constructive delivery only can be done
