• Multiple mortgages on a property that I do not own

Hello there,

I'm buying a residential property for which I applied for a loan of Rs. 6.5 Lakhs which is sanctioned by the LIC Housing Ltd. During the disbursement process their agent asked me sign multiple agreements some of them were on Rs. 50 non-judicial stamp paper. These agreements include Indemnity Bond, Irrecoverable Power of Attorney, Memorandum of Deposit of Title Deeds, etc. Before signing them I've gone through them and read them as much as I can. I'm aware that LIC going to lien/mortgage against this property and will ask me to hand over Title Deeds and other papers as soon as I made the payment to seller and get the papers registered in my favor.

Now the problem is after I came back home after signing these numerous agreements I felt like that the agent asked me to sign some other "MORTGAGE AGGREMENT" too apart from these LIC agreements I mentioned above. I admit that I'm not 100% sure that the agent asked me to sign some other agreement too. But I called the agent and asked him about the same and he denied that apart from Indemnity Bond, Irrecoverable Power of Attorney, Memorandum of Deposit of Title Deeds he didn't ask me to sign anything. But I'm still worried about the same incident.   

Now, I would like to know is it possible for the agent or someone to create another mortgage on this property that I DONT OWN (sale deed/title deed is not on my name) currently by taking my signature unknowingly and when I already entered with some mortgage agreement with LIC and they are giving me loan for this property? Any help will be highly appreciated.
Asked 6 months ago in Property Law from New Delhi, Delhi
Religion: Hindu
1) when you are taking loan housing finance company will call upon you to execute equitable mortgage of the property 

2) after amendment of registration act equitable mortgage also requires registration 

3) you are entitled to obtain copy of agreements signed by you for your record 

4)agent would not create another mortgage of the property .

5) i presume you have not signed on blank documents 
Ajay Sethi
Advocate, Mumbai
23100 Answers
1212 Consultations
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1) housing finance company has advanced you loan for purchase of flat 

2) if you default in payment of loan bank can seek to auction mortgaged property to recover the loan 

3) earlier mortgage by deposit of title deeds were not regd . On account of increase in fraudelent transactions registration act was amended to make registration mandatory for equitable mortgage 

4) equitable mortgage if not regd is inadmissible in evidence . Hence registration is necessary 
Ajay Sethi
Advocate, Mumbai
23100 Answers
1212 Consultations
5.0 on 5.0
Now, I would like to know is it possible for the agent or someone to create another mortgage on this property that I DONT OWN (sale deed/title deed is not on my name) currently by taking my signature unknowingly and when I already entered with some mortgage agreement with LIC and they are giving me loan for this property? Any help will be highly appreciated.

First of all you should confirm the documents you have signed by asking the photo copies of the same from the lender i.e., LIC.
Go through all those papers you have signed and see what is the fact which is adverse to you and have been obtained from you which you consider as illegal or out of any legal frame or rules..
You may point this observation to the LIC authorities and may ask for rectification of the same as per rules. 
LIC or any agent cannot mortgage your property to a third person after granting you loan on it.
T Kalaiselvan
Advocate, Vellore
13910 Answers
127 Consultations
5.0 on 5.0
I didn't sign any blank document. Can you please elaborate point 1) and 2) a bit more. Will the LIC call me again and ask me register this mortgage agreement after I pay the full amount to seller and get the sale deed registered/transferred to me. Is my signature on the agreement on Indemnity Bond, Irrecoverable Power of Attorney and Memorandum of Deposit of Title Deeds isn't sufficient enough to mortgage the property? If that's the case then I don't need to worry. 

I would be grateful if other lawyers will also answer my original question.


The LIC while granting loan would have got the EM documents also along with other documents you have signed.  This equitable mortgage would be based on the deposit of title deeds and not by mortgaging the property directly. This is a routine formality hence there is nothing to be worried about it.
T Kalaiselvan
Advocate, Vellore
13910 Answers
127 Consultations
5.0 on 5.0
If a person is planning to play fraud by fabricating documents he may go to any extent and even by forging your signature,impersonating you before the authorities etc. 
In this case if the agent is suspected to be involved in any fraudulent activity as apprehended by you, first have a background verification about the credentials of the so called agent, if he is a suspicious nature then instead of begging him for the details, you may just publish a public notice in any leading newspaper stating that the property belonging to you as mentioned in the schedule of the notice belongs absolutely to you and is presently under collateral security with LIC for the housing loan, however it is suspected that somebody is trying to misuse the property by creating mortgage or charge over the property by fabricating the documents and forging the signatures, anyone dealing with such illegal issue shall do so on their own risk   and the same will not be binding on you. 
This will protect your interests in your property.
T Kalaiselvan
Advocate, Vellore
13910 Answers
127 Consultations
5.0 on 5.0
1) obtain confirmation  from agent in writing that only documents on which your signature has been obtained are the POA , indemnity bond , and memorandum of deposit of title deeds 

2) mortgage agreement can be with LIC only  as loan has been taken from LIC 

3) since loan is from LIC no further mortgage can be created without LIC consent 
Ajay Sethi
Advocate, Mumbai
23100 Answers
1212 Consultations
5.0 on 5.0
lic cannot mortgage this property to any other in absence of notice to you. you should take photo copy of the deed or call for a copy of the agreement. LIC is bound to provide a copy of the agreement. 

it is standard form of agreement and all the legal terms are included, lic cannot amend any clause for specific borrower because all the terms are already printed in the deed and it is same for all borrowers. 

this loan is granted against mortgage by sale deed. according to section 58 of TP Act borrower transfers only interest in the property to the mortgagee and absolute right of sale is vested in owner (borrower) only. dont worry all documents are legally executed.
 
Shivendra Pratap Singh
Advocate, Lucknow
2714 Answers
41 Consultations
4.9 on 5.0
The agents do commit misdemeanors such as the one that you are apprehending. You should desist from signing any blank document and also seek xerox copies of every document that you sign. Also make sure that you get the document copied after you have signed instead of accepting a ready to deliver xerox copy.


Ashish Davessar
Advocate, Jaipur
18055 Answers
445 Consultations
5.0 on 5.0
This situation could have been avoided had you involved a lawyer in the process to have all the documents vetted by him before you signed those. Be that as it may, to enforce mortgage on another property, the title deed thereof has to be deposited with the lender. Furthermore, the mortgagee has to prove that there is a legally dischargeable debt as a security whereof the mortgagor executed the mortgage. There cannot be a mortgage over and beyond the actual sum of money payable to the bank/financial institution.
Ashish Davessar
Advocate, Jaipur
18055 Answers
445 Consultations
5.0 on 5.0

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