• Property Mortgage

I have lend some amount and against which cheques were issued to me, these cheques were bounced and return unpaid because of insufficient balance. I have filed a complaint under section 138. Now that person had requested me for an MOU & also he agrees to mortgage 2 flats.
One flat is under construction which is valued only 13lacs after construction.
Another flat is said to be under Bank Loan, i have checked EC & Sale Deed and not found any entry with details of Bank. The value of the property is 20 lacs & the opp party claims that 13 lacs is only outstanding. In this there is a margin of 7lacs.

I just want to know whether i can still go for mortgage of second flat irrespective of Bank loan, which is not documented anywhere. Please suggest.

I have asked the opposite party to make his Wife & Son as guarantors for the amount which he is suppose to repay me (Actually value is 30 lakhs & now he agreed for 20lacs only and cheques are available for Rs.20lacs only)

If the opposite fails to repay and does not constructs the first flat, how do i secure myself.

The opposite party is a Ex-Servicemen who served in Indian Airforce.

Also please guide me with some important conditions of MOU which can be documented to safe guard my money, in case if he still fails to repay me.


Please help me and provide me important clauses by which i can safeguard my money.
Asked 2 years ago in Property Law from Hyderabad, Andhra Pradesh
1) if flat is mortgaged to bank ask the borrower to obtain a bank statement about the outstanding loan amount . 

2) if flat has been subject matter of loan by means of equitable mortgage then under section 59 of Transfer of property act it does not require registration . 

3)however now as per the amendments carried out it  is provided that The ‘Mortgage Intimation of Deposit of title deed’ should be physically filed within 30 days from the date of mortgage.

4)you would need bank consent if the borrower wants to create third party rights in respect of the said flat . 

5)rather than taking mortgage of flats better  give the accused time to make payment in installments 

6) you can by mutual consent take adjournments in the case till full payment is made by the accused . 

7) as far as MOU is concerned better first obtain bank consent before entering into an MOU . get it drafted by a local lawyer .
Ajay Sethi
Advocate, Mumbai
23392 Answers
1229 Consultations
5.0 on 5.0
You can ask him to get a bank statement about the outstanding amount due
If the same is under equitable mortgage no register action of the same us needed unless cooperative banks to give the certificate of deposit of title deed within 30 days
You need to get banks consent if you want give third party rights
You pay the instalment to him

Take some time till You can get full payment from him and get an affidavit from him
You create an agreement after consulting with bank
Jeshma Mohandas KP
Advocate, Kozhikode
567 Answers
1 Consultations
3.5 on 5.0
Hi, it is better to file joint memo stating accused is agreed to repay the amount in installment and if the accused breach any single installment then you can get back the amount through the process of the court.
Pradeep Bharathipura
Advocate, Bangalore
4105 Answers
133 Consultations
4.3 on 5.0
A.	In your case, accused mortgaged the property under mortgage by deposit of title deed (Equitable Mortgage) which is not required for compulsory registration. Hence, this mortgage not reflecting in EC.

B.	Accused has entered into several agreements with the bank while taking a loan. Hence, unless obtained details from the bank regarding loan dues, you shouldn’t enter any MOU with him.

C.	Once mortgage created by way of any manner that charge would fix on the mortgaged property.

D.	Ask him to execute one more promissory note in favor of you for additional security of the amount and involve major family member to MOU.

E.	Don’t enter MOU unless cleared the above clarification and If MOU is necessary in your opinion, contact a local lawyer for effective draft of MOU.
B.T. Ravi
Advocate, Bangalore
738 Answers
31 Consultations
5.0 on 5.0
1. The opposite party has mortgaged the second flat to the bank by depositing title deeds to it. The title deed will be released only in the event that the entire bank loan is repaid along with interest at the agreed rate. If you desire to enter into a MOU with him respecting the flat which is under mortgage to the bank then ask him to obtain a bank statement of loan to ascertain the exact liability. The MOU will then have to be accordingly structured. 

2. Since the second flat is under a mortgage to the bank he would require prior consent of the bank before creating third party rights in your favour. 

3. Since compulsory registration is not required in case mortgage is created by depositing the title deed. Due to this reason the mortgage is not reflected in EC. 

4. Instead of entering into a mortgage deed with him you should look at other available legal means of securing the repayment of amount advanced by you to him. He can make a promissory note in your favour. Securing the repayment of money through mortgage in your favour should be the last resort.
Ashish Davessar
Advocate, Jaipur
18264 Answers
450 Consultations
5.0 on 5.0
1. Mortgage of a property is not registered in any registration office to enable you to verify,

2. Moreover, a mortgaged oroperty can not be dealt with by the mortgagor without the written consent of the mortgagee,

3. The outstanding loan amount can be found from the latest statement of accounts issued by the Bank and in the instant case, the value of the property does not cover the aggregate of outstanding loan amount of the Bank and the loan outstanding lying with you,

4. So, the proposal of double mortgage is not feasable,

5. You can buy the other property to realise your debt,

6. One note of caution, do not claim anywhere interest on the loan provided if you do not have license for money lending against interest.
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0

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