Here is a practical guide to mortgage deed drafting, written for owners, buyers and families in Delhi NCR and elsewhere in India. The firm of Advocate B.K. Singh handles this work from offices in Dwarka, New Delhi and Vaishali, Ghaziabad.
In short. Mortgage deed drafting means preparing the document that makes immovable property security for a loan under section 58 of the Transfer of Property Act. The draft must choose the right type of mortgage, describe the property and debt exactly, set out repayment, default and redemption terms, and be stamped and registered, attested by two witnesses, unless it is a mortgage by deposit of title deeds.
A mortgage deed is the document that turns a promise to repay into security over land or a building. Banks have their own standard forms, but a great many mortgages in Delhi NCR are private: a business owner borrowing from an investor against a shop, a family lending to a relative against a flat, a company securing a supplier's credit against its factory, or an NRI raising money on an inherited house. In each case, a badly drafted deed can leave the lender with no real security, or the borrower exposed to losing the property on terms he never understood.
This page explains the six kinds of mortgage under Indian law and which one suits which situation, the clauses every mortgage deed needs, stamp duty and registration, equitable mortgages by deposit of title deeds, filings with the ROC and CERSAI, what happens on default and repayment, and how the drafting changes for freehold and leasehold property, flats, plots, agricultural land, industrial and hospital property, and for lenders and borrowers who are banks, individuals, companies or NRIs.
- Law
- Transfer of Property Act 1882 (sections 58 to 104, especially 58, 59, 60, 65A, 67, 69 and 76); Registration Act 1908 (sections 17 and 49); Indian Stamp Act 1899 Articles 6 and 40 as applicable in Delhi, and state stamp laws in UP and Haryana; Code of Civil Procedure Order 34; SARFAESI Act 2002 for banks; Companies Act 2013 section 77.
- Forum
- The deed is registered at the Sub-Registrar's office with jurisdiction over the property. Disputes go to the civil court (Order 34 suits), arbitration if agreed, or the DRT where a bank or financial institution enforces under the RDB Act or SARFAESI Act.
- Time limit
- Present the deed for registration within four months of execution. Register a company's charge with the ROC within 30 days of creation. A mortgagee's suit for money is limited to 12 years; redemption and foreclosure to 30 years.
- Documents
- Title chain, latest mutation and property tax records, encumbrance search, approved plans and occupancy certificate where relevant, lessor permission for leasehold property, identity and PAN of parties, loan terms, board or partner resolutions.
- Cost
- Stamp duty depends on the type of mortgage and the state; mortgages with possession attract duty at or near conveyance rates, others at lower rates. Registration fee and professional costs are separate.
What a mortgage deed does
A mortgage is a transfer of an interest in specific immovable property to secure repayment of a loan or performance of an obligation. The owner who gives the security is the mortgagor; the lender is the mortgagee; the amount secured is the mortgage money; the document is the mortgage deed. Ownership stays with the borrower in most forms of mortgage, but the lender gets a legal right to recover from the property if the debt is not paid.
The deed has to do three jobs well. It has to create a valid security, which means the right parties, the right property, the right type of mortgage and proper stamping, attestation and registration. It has to record the commercial terms clearly: amount, interest, repayment, default and what the lender may do. And it has to protect the borrower's right to redeem, because Indian law treats that right as inseparable from a mortgage.
Banks and housing finance companies prepare their own documents, so in a bank loan the drafting work is usually a review for the borrower or a guarantor. In private lending, the lawyer drafts from scratch, and most of the value lies in choosing the right structure and anticipating what happens if things go wrong.
The six kinds of mortgage, and which one to use
Section 58 of the Transfer of Property Act recognises six kinds of mortgage. In a simple mortgage, the borrower does not give possession, personally promises to repay, and agrees that the property can be sold through the court if he does not. In a mortgage by conditional sale, the borrower ostensibly sells the property on condition that the sale becomes absolute on default or void on repayment; the condition must be in the same document. In a usufructuary mortgage, the lender takes possession and keeps the rent or income in lieu of interest or towards the debt.
In an English mortgage, the borrower promises to repay on a date and transfers the property absolutely to the lender, subject to retransfer on repayment. A mortgage by deposit of title deeds, often called an equitable mortgage, is created simply by handing over the title documents with intent to create security, in Kolkata, Chennai, Mumbai and other towns notified by the state government; it needs no registered deed. Anything that does not fit these categories is an anomalous mortgage.
For private loans between individuals in Delhi NCR, a registered simple mortgage is the most common choice: the borrower keeps possession and the lender has a clear charge enforceable through court. A usufructuary mortgage suits a lender who wants rental income as return, but brings duties to manage the property and account for income under section 76. An equitable mortgage is the standard for bank and NBFC loans because it is quick and cheap, but it depends on the lender holding original deeds and on the town being notified.
The law that shapes a mortgage deed
Section 58, Transfer of Property Act 1882
Defines mortgage and the six kinds: simple, conditional sale, usufructuary, English, deposit of title deeds and anomalous. The deed should state clearly which kind is intended, because the remedies differ.
Section 59, Transfer of Property Act 1882
Where the principal money secured is one hundred rupees or more, a mortgage other than by deposit of title deeds can be made only by a registered instrument signed by the mortgagor and attested by at least two witnesses.
Section 60, Transfer of Property Act 1882
The mortgagor has the right to redeem on paying the mortgage money at the proper time and place. Any clause that unreasonably restricts or defeats this right is a clog on redemption and is void.
Sections 67 and 69, Transfer of Property Act 1882
Section 67 gives the mortgagee the right to sue for foreclosure or sale. Section 69 allows sale without the court's intervention only in limited cases, broadly English mortgages where the deed confers the power and certain parties are involved, mortgages to the government, and property in specified towns. Most private lenders must therefore go to court.
Section 17, Registration Act 1908
Instruments creating or extinguishing an interest in immovable property worth one hundred rupees or more must be registered. Under section 49, an unregistered document that needed registration does not affect the property, though it may be used as evidence of a contract or a collateral transaction.
Articles 6 and 40, Indian Stamp Act 1899
Article 40 covers mortgage deeds: where possession is given, duty is generally at the conveyance rate on the amount secured; where it is not, a lower rate applies. Article 6 covers agreements relating to deposit of title deeds. Delhi applies the Indian Stamp Act with its own schedule; Uttar Pradesh and Haryana have their own amendments and rates.
Order 34, Code of Civil Procedure 1908
Lays down suits for foreclosure, sale and redemption, with a preliminary decree fixing the amount due and time to pay, followed by a final decree. This is the route for a private mortgagee who cannot use the SARFAESI Act.
Who can mortgage, and the checks before drafting
Only someone who owns the property, or holds a transferable interest in it, can mortgage it. The first job is a title check: the chain of title for at least the period your lender needs, mutation, property tax records, and an encumbrance search at the Sub-Registrar's office to see whether the property is already mortgaged. Section 48 of the Transfer of Property Act gives priority to earlier transfers, so a second mortgage ranks behind the first. See the pages on title verification and encumbrance checks.
Where the property is jointly owned, every co-owner must join if the whole property is to be mortgaged; one co-owner can mortgage only his own undivided share, which is poor security. A minor's property cannot be mortgaged by the natural guardian without the prior permission of the court under section 8 of the Hindu Minority and Guardianship Act 1956. A karta can mortgage HUF property for legal necessity or benefit of the estate, and the deed should recite the necessity.
A company mortgages through a board resolution authorising the borrowing and the security; for a public company, mortgaging the whole or substantially the whole undertaking needs a special resolution under section 180 of the Companies Act. An LLP acts as its LLP agreement provides. An attorney holder can mortgage only if the power of attorney specifically authorises it; a general power to manage is not enough. See the page on power of attorney drafting.
Clauses every mortgage deed needs
The parties and recitals come first: full names, parentage, addresses, PAN, and for companies the CIN and the resolution. The recitals tell the story: how the mortgagor acquired the property, the loan agreed, and the intention to secure it. The operative clause then creates the mortgage in words that match the chosen kind, for example 'the mortgagor hereby mortgages by way of simple mortgage' or 'transfers by way of usufructuary mortgage', so that nobody can later argue about what was intended.
The debt clauses state the principal, the interest rate and how it is calculated, the repayment schedule, prepayment rights, and what happens on late payment. The property schedule describes the property exactly: municipal number, plot or khasra number, area, floor, boundaries on all four sides and the title document reference. Errors here are the most common reason a mortgage fails to bind the right property.
The covenants follow. The mortgagor confirms clear title, agrees to pay taxes, keep the property insured with the lender's interest noted, not to create further charges or let the property beyond what section 65A allows without consent, and to permit inspection. The default clause lists events of default and the lender's remedies. The redemption clause states how and when the borrower can repay and get the property released, and obliges the lender to return documents and execute a reconveyance. Notices, governing law, jurisdiction and, if wanted, arbitration complete the deed.
How a mortgage deed is drafted and registered
For a private mortgage, the work usually takes one to three weeks depending on the title papers.
Agree the commercial terms
Settle the loan amount, interest, tenure, repayment schedule and whether possession will pass. Put these in a short term sheet both sides sign, so the drafting does not reopen the deal.
Verify title and encumbrances
Examine the title chain, mutation, tax records and an encumbrance search. For leasehold property, get the lessor's mortgage permission; for a flat, check the conveyance or sub-lease and society or AOA NOC requirements.
Choose the kind of mortgage and draft
Decide between simple, usufructuary, English, conditional sale or deposit of title deeds, and draft the deed with exact property and debt details. Share the draft with both sides and record every change.
Work out and buy stamp duty
Calculate duty under the applicable state schedule for the chosen kind of mortgage and buy e-stamp paper in the mortgagor's or mortgagee's name as practice requires. See the page on e-stamp assistance.
Execute before two witnesses
The mortgagor signs, and at least two witnesses attest by signing in the mortgagor's presence. Witnesses should carry identity proof and be available to appear at registration if required.
Register at the Sub-Registrar
Present the deed within four months of execution at the Sub-Registrar's office with jurisdiction. Parties appear, photographs and biometrics are taken, and the registered deed is returned. See Sub-Registrar appointment support.
Complete post-registration filings
File the charge with the ROC within 30 days if the borrower is a company, and with CERSAI where the lender is a bank or financial institution. Note the lender's interest on the insurance policy and, where the authority requires it, inform the lessor.
Keep a certified copy of the registered deed and the encumbrance certificate showing the mortgage. The lender holds the originals of the title deeds in most private mortgages too.
Kinds of mortgage compared
| Kind | Possession | Registered deed needed | Lender's main remedy |
|---|---|---|---|
| Simple mortgage | Stays with borrower | Yes, with two attesting witnesses | Suit for sale under Order 34 |
| Mortgage by conditional sale | Usually stays with borrower | Yes | Suit for foreclosure |
| Usufructuary mortgage | Passes to lender | Yes | Keeps income; suit for money in limited cases |
| English mortgage | Usually stays with borrower | Yes | Suit for sale; private sale only where section 69 allows |
| Deposit of title deeds (equitable) | Stays with borrower | No deed needed, but a memorandum that itself records the bargain must be registered | Suit for sale, or SARFAESI for banks and eligible lenders |
| Anomalous mortgage | As agreed | Yes | As the deed provides, within the law |
Stamp duty and registration in practice
Stamp duty on a mortgage deed depends on the state and on whether possession is given. A mortgage with possession is generally charged at the conveyance rate on the amount secured, which makes usufructuary mortgages expensive. A mortgage without possession is charged at a lower rate under the state schedule. A memorandum or agreement relating to deposit of title deeds is charged under Article 6 or the state equivalent. Rates and caps change through state notifications, so check the current schedule in Delhi, Uttar Pradesh or Haryana before buying e-stamp paper. See the page on stamp duty advisory.
Under-stamping is a real risk. An instrument not duly stamped is not admissible in evidence until the deficit and penalty are paid, and the Collector can impound it. A lender who saved on stamp duty may find, at the worst possible moment, that the deed cannot be relied on in court until a large penalty is paid.
Registration is compulsory for every mortgage other than deposit of title deeds where the principal is one hundred rupees or more. The deed must be presented within four months of execution at the office of the Sub-Registrar within whose area the property, or any part of it, lies. Delhi and UP have moved much of the registration process online, with appointment booking and e-stamp integration, but personal appearance with identity proof is still needed in most cases.
Equitable mortgage by deposit of title deeds
An equitable mortgage is created when the owner delivers documents of title to the lender with the intention of creating security, in a town notified for the purpose. No registered mortgage deed is required, which is why banks prefer it. The intention is usually recorded in a memorandum of deposit or a letter from the borrower, and the bank keeps the original title deeds.
The memorandum needs care. If it merely records a deposit already made, it does not need registration. If it is itself the document that creates the mortgage, with the terms of the bargain, it is compulsorily registrable under section 17 of the Registration Act, and an unregistered memorandum of that kind cannot be relied on to prove the mortgage. Drafting the memorandum as a record of a completed deposit, signed after the deeds are handed over, avoids the problem.
The equitable mortgage depends entirely on the documents deposited being the real title documents. A lender who accepts photocopies, a sale agreement in place of a sale deed, or an allotment letter for a leasehold flat without the lessor's permission may find the security weak. Some states have introduced requirements to file or register notice of equitable mortgages; check the current state rule.
After the deed: ROC, CERSAI, insurance and reconveyance
Where the borrower is a company, the charge must be registered with the Registrar of Companies under section 77 of the Companies Act within 30 days of creation, with limited further time available on payment of additional fees. An unregistered charge is not taken into account by a liquidator or creditor, so a lender who fails to file loses priority in insolvency. LLP charges also have to be filed with the Registrar as the LLP rules require.
Where the lender is a bank, financial institution or other secured creditor under the SARFAESI Act, the security interest must be registered with the Central Registry (CERSAI). Buyers and later lenders search CERSAI and the Sub-Registrar's records before dealing with a property, so these filings protect the lender against a later fraudulent sale.
When the loan is repaid, the borrower is entitled to the return of the title deeds and a document releasing the property. A receipt for payment endorsed on the mortgage deed that does not itself purport to extinguish the mortgage is exempt from registration under section 17(2)(xi) of the Registration Act, but a separate reconveyance or release deed should be executed and registered so that the encumbrance record is clean. See the page on release deed drafting. Ask for satisfaction of charge to be filed with the ROC and CERSAI as well.
How the drafting changes by property type
Freehold houses, plots and builder floors are the simplest: the owner can mortgage without anyone's permission, subject to title. Leasehold property is different. DDA, Land and Development Office, Noida, Greater Noida, Yamuna Authority and GDA leases usually require the lessor's prior permission to mortgage, and lenders will ask for it. Converting to freehold first, where available, removes the issue; see the page on freehold conversion assistance.
A flat in a group housing project before the conveyance deed is executed is not yet owned; the buyer has only contractual rights under the builder buyer agreement. Banks deal with this through a tripartite agreement with the builder. A private lender taking such a flat as security is taking a much weaker interest and the deed must say exactly what is being mortgaged. A cooperative society flat may need the society's NOC.
Agricultural land raises separate issues. The SARFAESI Act does not apply to agricultural land, and state land laws may restrict mortgages, especially usufructuary mortgages, or mortgages in favour of persons who are not agriculturists or institutional lenders. In Uttar Pradesh, the Revenue Code governs what a bhumidhar can transfer; in Delhi, the Delhi Land Reforms Act restricts certain transfers of bhumidhari land. Industrial plots and hospital buildings on authority land usually need the authority's mortgage permission and sometimes an NOC tied to the permitted use.
How the drafting changes by lender and borrower
When the lender is a bank, NBFC or housing finance company, it supplies the documents, and the drafting work is reviewing them for the borrower or guarantor: interest reset clauses, cross-default with other loans, personal guarantees, and the scope of the security. Banks and eligible lenders can enforce under the SARFAESI Act without going to court, and recovery claims of Rs 20 lakh and above go to the Debts Recovery Tribunal. See the pages on SARFAESI applications in the DRT and defending a bank Original Application.
When the lender is an individual, investor or company that is not a bank, it cannot use SARFAESI and must enforce through a civil suit under Order 34 or arbitration. Interest must be reasonable: the Usurious Loans Act 1918 lets a court reopen a transaction where interest is excessive and the bargain unfair. Private lenders who lend as a business should check whether state money-lending laws apply; in Delhi, the Punjab Registration of Money-lenders Act 1938 as extended to Delhi may require registration.
An NRI borrower can mortgage property in India in favour of a bank or housing finance company in India under the FEMA rules; mortgages in favour of overseas lenders are more restricted and need checking against the current regulations. An NRI usually executes through a power of attorney, which must specifically authorise mortgaging and be duly stamped in India after arrival. Startups and family businesses borrowing against a founder's property should make sure the deed identifies whose debt is secured, so that the founder's liability does not extend further than intended.
What happens on default
If the borrower defaults, a private mortgagee usually sends a demand notice and then files a suit under Order 34 of the Code of Civil Procedure. In a simple mortgage, the suit is for sale; in a conditional sale mortgage, for foreclosure. The court passes a preliminary decree stating the amount due and giving the borrower time to pay, and if he does not, a final decree for sale or foreclosure follows. The limitation for a mortgagee's suit for money is 12 years from when the money became due; for foreclosure, 30 years.
Banks and eligible financial institutions use the SARFAESI Act: a 60-day demand notice under section 13(2), possession under section 13(4), and sale. Borrowers can challenge measures before the Debts Recovery Tribunal under section 17 within 45 days. A clause in a private mortgage deed giving the lender the right to take possession or sell without court is enforceable only where section 69 of the Transfer of Property Act allows it.
The borrower keeps the right to redeem until the property is actually sold or foreclosed by decree, and the limitation for a redemption suit is 30 years. Clauses that make the property the lender's automatically on default, or that bar redemption for an unreasonably long time, are struck down as clogs on redemption. In mortgage files that come to Advocate B.K. Singh, the dispute usually turns on a clause that tried to do too much: a private sale power the law does not allow, or a conditional sale written in a separate document.
Delhi, Noida, Ghaziabad and Gurugram notes
In Delhi, mortgage deeds are registered at the Sub-Registrar's office for the area where the property is, with e-stamp paper purchased through the authorised channels. Delhi circle rates, set by the Revenue Department, matter for usufructuary mortgages charged like conveyances. Leasehold property under DDA or L&DO needs their mortgage permission; property in Lal Dora villages often lacks a registered title chain, which makes it difficult to mortgage to institutional lenders.
In Noida, Greater Noida and Ghaziabad, the UP stamp schedule applies and registration is through the UP registration department's online system, followed by appearance at the Sub-Registrar's office. Most residential and industrial property in Noida and Greater Noida is leasehold from the authority, and mortgage permission from the authority is a standard requirement. In Gurugram, Haryana's stamp rates and online registration system apply, and HSVP or DTCP permissions may be relevant for certain plots.
Across the region, lenders run searches at the Sub-Registrar's office, with the development authority and on CERSAI before advancing money. Borrowers should expect these searches and keep their records ready.
Checklist before signing a mortgage deed
- Title chain checked and copies of all earlier deeds collected
- Encumbrance search at the Sub-Registrar's office and CERSAI search done
- Mutation and property tax records match the mortgagor's name
- Lessor's mortgage permission obtained for leasehold property
- Society, AOA or builder NOC obtained where required
- All co-owners joining, or the deed limited to the mortgagor's share
- Court permission obtained for any minor's share
- Board resolution or LLP authority for a company or LLP mortgagor
- Power of attorney specifically authorising the mortgage, if an attorney signs
- Kind of mortgage stated clearly in the operative clause
- Property schedule with exact number, area and boundaries
- Interest, repayment, prepayment, default and redemption terms clear
- Stamp duty calculated on the current state schedule
- Two attesting witnesses available with identity proof
- ROC or CERSAI filing planned within the time limit
A made-up example: a private loan against a shop in Ghaziabad
Here's a made-up example. A trader in Ghaziabad wants a loan from a family friend to expand his business, secured on a freehold shop he owns. The friend wants the security to be enforceable and does not want to manage the shop. The parties agree on a three-year loan with quarterly interest and the principal repayable at the end.
The lawyer checks the title chain back to the original allottee, runs an encumbrance search and finds an old bank charge that was repaid but never released. The trader gets the bank to execute a registered release first. The deed is then drafted as a simple mortgage, with the shop described by its municipal number, area and boundaries, a clear repayment schedule, a covenant against further charges or long leases without consent, insurance with the lender's interest noted, and a redemption clause requiring the lender to return the deeds and execute a reconveyance on repayment.
Stamp duty is paid under the UP schedule for a mortgage without possession, the deed is executed before two witnesses and registered at the Sub-Registrar's office for the area. The facts are invented, but finding and clearing an old unreleased charge before the new mortgage is one of the most common and useful outcomes of a proper title check.
Mistakes that make a mortgage deed fail
The most damaging mistake is an unregistered mortgage deed. Under section 59 of the Transfer of Property Act, a mortgage other than by deposit of title deeds for one hundred rupees or more must be registered, and without registration it does not create a charge on the property. Lenders who rely on a notarised agreement and a bundle of original documents often discover that they hold only an unsecured debt.
The second is mixing up mortgage and sale. A sale deed with a separate agreement to reconvey on repayment is not a mortgage by conditional sale, because the law requires the condition to be in the same document; it may be treated as an outright sale with a right of repurchase, or the borrower may argue it was a sham. The third is drafting a clause that lets the lender take the property on default without court, which is void in most private mortgages.
The fourth is ignoring the lessor or the society. A leasehold property mortgaged without the authority's permission may breach the lease and expose the property to action by the authority. The fifth is failing to file with the ROC or CERSAI in time, which costs the lender priority. None of these is hard to avoid if the deed is drafted after the title and structure are settled, not before.
What to do this week
Write down the loan terms in a one-page note both sides agree on. Collect the title papers, latest mutation and property tax receipts, and for leasehold property the lease deed and any earlier permissions. Order an encumbrance search. If the property is a flat, find out whether the conveyance has been executed and whether the society or AOA needs to issue an NOC; the page on NOC assistance covers this.
If you are a borrower reviewing a bank's documents, list every clause you do not understand and ask before signing; once registered, the terms are hard to change. If you are restructuring an existing loan, see the page on loan settlement and one-time settlement.
When Advocate B.K. Singh reviews a draft mortgage deed, the first things he checks are whether the operative clause names the kind of mortgage, whether the property schedule matches the title deed exactly, and whether the redemption clause works in practice. If you want the papers checked before you act, the team of Advocate B.K. Singh at Legals365 can review them and tell you the next step through the talk to a lawyer page.
Frequently asked questions
Is registration of a mortgage deed compulsory?
Yes, for every mortgage other than a mortgage by deposit of title deeds where the principal is one hundred rupees or more. Section 59 of the Transfer of Property Act requires a registered deed signed by the mortgagor and attested by two witnesses. An unregistered mortgage deed does not create a charge on the property.
What is the difference between a simple mortgage and an equitable mortgage?
In a simple mortgage, the borrower executes a registered deed, keeps possession and agrees the property can be sold through court on default. In an equitable mortgage, the borrower deposits original title deeds with the lender in a notified town, and no registered deed is needed. Banks generally use equitable mortgages; private lenders usually use registered simple mortgages.
How much stamp duty is payable on a mortgage deed in Delhi?
It depends on whether possession is given. A mortgage with possession is generally charged at the conveyance rate on the amount secured, while a mortgage without possession attracts a lower rate under the Delhi schedule. Rates change by notification, so check the current schedule before buying e-stamp paper.
Can I mortgage a leasehold property?
Usually yes, but most leases from DDA, L&DO, Noida, Greater Noida and GDA require the lessor's prior permission to mortgage. Lenders will ask for that permission before advancing money. Converting to freehold, where the scheme allows, removes the requirement.
Can a private lender sell the mortgaged property without going to court?
Generally no. Section 69 of the Transfer of Property Act allows sale without court only in limited cases, such as certain English mortgages, mortgages to the government and property in specified towns. Most private lenders must file a suit for sale or foreclosure under Order 34 of the CPC.
Can a co-owner mortgage jointly owned property?
A co-owner can mortgage only his own undivided share, which most lenders treat as weak security. To mortgage the whole property, all co-owners must join the deed. A minor co-owner's share needs court permission under the Hindu Minority and Guardianship Act.
What happens to the mortgage after the loan is repaid?
The borrower is entitled to the original title deeds and a release of the property. A separate reconveyance or release deed should be executed and registered so that the encumbrance record shows the mortgage has ended. Where a company borrowed, satisfaction of charge should also be filed with the ROC.
Does a company have to register a mortgage with the ROC?
Yes. Section 77 of the Companies Act requires a company to register a charge on its property with the Registrar of Companies within 30 days of creation, with limited further time on additional fees. An unregistered charge is not taken into account against a liquidator or other creditors.
Can an NRI mortgage property in India?
An NRI can generally mortgage property in India in favour of a bank or housing finance company in India under the FEMA rules. Mortgages in favour of overseas lenders face more restrictions and should be checked against current regulations. The NRI usually signs through a power of attorney that specifically authorises the mortgage.
Can agricultural land be mortgaged?
Often yes, but state land laws may restrict mortgages of agricultural land, particularly with possession or in favour of non-agriculturists. The SARFAESI Act does not apply to agricultural land, so banks enforce through other routes. Check the UP Revenue Code or the Delhi Land Reforms Act as applicable.
What is a clog on redemption?
A clog on redemption is a clause that prevents or unreasonably restricts the borrower's right to repay and get the property back. Examples are a clause making the property the lender's automatically on default or postponing redemption for an unreasonable period. Such clauses are void under section 60 of the Transfer of Property Act.
Is a notarised mortgage agreement valid?
Notarisation does not replace registration. A notarised but unregistered mortgage deed for one hundred rupees or more does not create a charge on the property under section 59 of the Transfer of Property Act. It may be evidence of the loan, but the lender's security is lost.
Need help with Mortgage Deed Drafting? Send your papers or a short note of what has happened. An advocate from the team of Advocate B.K. Singh will read it and tell you the next step.
