Kevin Moses Paul
29 October 2021
Basically, an MODT (i.e. Memorandum of Deposit of Title Deeds) is a part of the State Government requirements and has to be registered in addition to the loan agreement and has to be registered at the Sub-Registrar Office. It is mandatory in a few states, but not in all states. The pledged property is endorsed at the Sub-Registrar office.
Moreover, in the case of "Bajarang Shyamsunder Agarwal vs Central Bank Of India", on 11 September, 2019 the Apex Court Judgement was in favour of bank signifying that banks could exercise the execution of the SARFAESI Act even in cases of unregistered deed. Moreover the court also stated that - "This Court is further of the opinion that such devious practices by the borrower to obstruct the rights of the bank to legitimately realize its dues cannot be appreciated by this Court".
Henceforth, the answer to your query is simple it is 'Yes, banks can and may use the Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 even if the MODT isn't registered'.
Hope It Helps!
Regards,
Kevin M. Paul
