D.Dis.No. 17019/P1/2019, Revision Petition on Deed of Mortgage
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued D.Dis.No. 17019/P1/2019 dated 22 March 2024, allowing a revision petition concerning Document No. P.190/2018 registered at the Sub Registrar Office, Mylapore. The authority classified the deed as a simple mortgage under Article 40(b) of the Indian Stamp Act, 1899, and set aside the earlier order that treated it as a mortgage with possession and demanded deficit stamp duty of Rs.30,79,60,000 and a penalty of Rs.1,000.
What the proceeding governs
D.Dis.No. 17019/P1/2019 dated 22 March 2024 decides how a particular mortgage deed must be classified for stamp duty purposes. The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, considered a revision petition under section 56(1) of the Indian Stamp Act, 1899.
The document under review had the following details:
- Document No. P.190/2018 at the Sub Registrar Office, Mylapore.
- Executed on 18 December 2018 by Imperial Consultant and Securities Limited in favour of Yes Bank Limited.
- Loan amount of Rs.770,00,00,000.
- Stamp borne by the deed of Rs.40,000.
Why the classification was disputed
The Sub Registrar, Mylapore, acting in the cadre of District Registrar, treated the deed as a mortgage with possession under Article 40(a). A clause stated that the mortgagor must hand over peaceful possession when directed by the mortgagee. On that basis, the Sub Registrar demanded deficit stamp duty of Rs.30,79,60,000 and a penalty of Rs.1,000.
The revision petitioner argued that the deed had to be read as a whole. Other clauses stated that:
- The mortgagee could take possession upon an event of default.
- The mortgagee could inspect the property after giving prior notice.
- The mortgagor could retain possession until the mortgagee became entitled to take it.
Findings and result
The Chief Controlling Revenue Authority and Inspector General of Registration found that possession remained with the mortgagor. The authority read the possession clause together with provisions making the security enforceable upon default.
The authority also relied on the inspection clause as evidence that possession had not been transferred. The deed was therefore classified as a simple mortgage under Article 40(b) of the Indian Stamp Act, 1899. The Sub Registrar's order dated 25 March 2019 was set aside, and the revision petition was allowed.
Who is affected
D.Dis.No. 17019/P1/2019 directly affects Imperial Consultant and Securities Limited, Yes Bank Limited and the registration proceedings for Document No. P.190/2018. It is also relevant to parties examining mortgage deeds where possession remains with the mortgagor and can be taken by the mortgagee only after default.
This summary is generated from the source document to help you find what is relevant. The PDF above is authoritative. For advice on your own property, use LandLens One or speak to a qualified professional.
Common questions
Was Document No. P.190/2018 treated as a mortgage with possession?
No. The Chief Controlling Revenue Authority and Inspector General of Registration classified it as a simple mortgage under Article 40(b) of the Indian Stamp Act, 1899.
Why did the authority find that possession remained with the mortgagor?
The deed allowed the mortgagor to retain possession until the mortgagee became entitled to take it. It also required prior notice for inspection and linked the mortgagee's right to take possession to an event of default.
What happened to the deficit stamp duty and penalty ordered by the Sub Registrar?
The order demanding deficit stamp duty of Rs.30,79,60,000 and a penalty of Rs.1,000 was set aside when the revision petition was allowed.
Does the proceeding decide the classification of every mortgage deed?
No. The proceeding decides the revision petition concerning Document No. P.190/2018. Its reasoning examines the particular clauses governing possession in that deed.
