• Equitable mortgage

A banker has financed an amount of Rs.18,00,000/- but the builder is registering sale deed for Rs.13,40,000/- and actual sale of the property is for Rs.22,40,000/-. Now the question is for what amount equitable mortgage (Memorandum of deposit of Title Deeds) to be created loan amount or sale deed amount? Please help.
Asked 2 years ago in Property Law from Vizianagaram, Andhra Pradesh
Dear Client,
It is black and white business of the builder,which is totally illegal and liable for prosecution . You are advised to get the sale deed registered  @22,40,000/-  as agreed amount and the paid amount to the builder. The Memorandurm of deposit of title deeds should be created at laon amount. If the builder refuse to  execute the registration of the deed of sale for full amount, you can approach to the court Infact the expenditure of full amount registration will be costly but the paid amount will be secured .
Mohammad Khaleel Ahmed
Advocate, Hyderabad
184 Answers
1 Consultations
3.9 on 5.0
A. The Bank can create a charge  or recovery the amount of Rs.18,00,000/- which amount financed by the bank. An equitable mortgage only transfers a beneficial interest in the asset to the mortgagee, with full legal ownership remaining with the mortgagor.

B. You are liable to handing over all documents in connection with the mortgaged property and when you become defaulter that the bank can be initiate legal proceeding against you with respect to balance amount. Subsequently, after the auction of the property that the bank has bounden duty to return the excess amount after the deduction of balance amount.

C. A mortgage by deposit of title deed does not require registration. Sometimes, a memorandum accompanies the deposit of title deeds. This paper examines the circumstances under which a memorandum accompanying the deposit of title deeds requires registration.
B.T. Ravi
Advocate, Bangalore
736 Answers
29 Consultations
5.0 on 5.0
1. equitable mortgage will be  created for the loan amount of Rs.18,00,000/ financed by bank.

2. builder must register sale deed for RS.22,40,000/
R.K. Nanda
Advocate, New Delhi
457 Answers
0 Consultations
3.8 on 5.0
A. Usually Sale Deed would be registered as per the market value of the property in the absence of total consideration amount in the Sale Deed due to save the Registration expenses. And still the same process going on in Karnataka also.

B. In the meanwhile, you have to know the actual market price in your area and check with respect to the same. The bank can mortgage the property is only Rs. 18,00,000/- not Sale Deed amount. For more clarification contact local lawyer with respect to the same.
B.T. Ravi
Advocate, Bangalore
736 Answers
29 Consultations
5.0 on 5.0
You must buy the same for actual amount of 22 lakhs if it seen that you have written under value you will be fined and will have to pay penalty
Jeshma Mohandas KP
Advocate, Kozhikode
567 Answers
1 Consultations
3.5 on 5.0
1)since bank has advanced loan for sum of Rs 18 lakhs equitable mortgage by deposit of tile deeds will have to be for Rs 18 lakhs only . 

2)since builder wants part of sale price in cash he would be insisting on registering sale deed for Rs 13,40,000. inform the builder that since loan amount has been advanced for Rs 18 lakhs sale deed should atleast reflect the loan amount advanced by bank . 

3) equitable mortgage has to be registered .
Ajay Sethi
Advocate, Mumbai
23235 Answers
1219 Consultations
5.0 on 5.0
Since the bank loan is for sum of rs18 lakhs the equitable mortgage registered should be of 18 lakhs coz the sale deed should not be less than the loan amount advanced by the bank.
Swithin Subhashish Lawrence
Advocate, Allahabad
47 Answers
3 Consultations
4.5 on 5.0
Hi,in order to save the stamp duty they have registered the property as per guidelines value if you ready to  pay more stamp duty you can register the flat on  actual amount  paid to the builder and bank has advance sum of Rupees 18 lakhs and equitable mortgage deed has to be executed on the actual amount advanced.
Pradeep Bharathipura
Advocate, Bangalore
4105 Answers
133 Consultations
4.3 on 5.0
1. Before the loan amount was sanctioned against the mortgaged collateral security, the Bank will collect valuation report for the property from its approved valuer which is independent of the amount at which the said deed has been registered or mentioned as the sale consideration amount,

2. The Equitable Mortgage by taking deposit of the Title Deed will be to secure the loan amount with interest thereupon once the said loan account becomes NPA.
Krishna Kishore Ganguly
Advocate, Kolkata
12106 Answers
231 Consultations
5.0 on 5.0

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