Proceedings on Document No.P.190/2018, Deed of Mortgage

What this document is

The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai 600 028, issued D.Dis.No. 17019/P1/2019 dated 22.03.2024 on a revision petition filed under section 56(1) of the Indian Stamp Act, 1899. It concerns Document No.P.190/2018, titled Deed of Mortgage, executed on 18.12.2018 at the Sub Registrar office, Mylapore by Imperial Consultant and Securities Limited in favour of Yes Bank Limited.

What was in dispute

The Sub Registrar, Mylapore, in the cadre of District Registrar, had earlier treated the document as a mortgage with possession under Article 40(a) of the Indian Stamp Act, 1899.

Based on that view, the Sub Registrar determined:

• deficit stamp duty of Rs.30,79,60,000/-
• penalty of Rs.1,000/-

The reason given was a clause stating that the mortgagor should hand over peaceful possession of the mortgaged properties when directed by the mortgagee.

What the revision petitioner argued

Imperial Consultants and Securities Limited, through counsel, argued that the document had been read incorrectly and not as a whole.

The petition relied on another clause stating that:

• the mortgagee may enter and take possession only upon happening of an event of default
• until then, possession had not been handed over

What the authority decided

The Chief Controlling Revenue Authority and Inspector General of Registration said a written document must be read as a whole, not by isolating one clause.

The decision points noted in the proceedings are:

• the clause about handing over possession must be read together with the clause that allows possession only after the security interest becomes enforceable
• a separate inspection clause shows the mortgagor retained possession, because the mortgagee needed prior notice to inspect the property
• clause 15(b) expressly says the mortgagor may retain possession until the mortgagee becomes entitled to take possession under the document
• the intention of the parties was that possession would pass only on default

Why it matters to buyers, owners and lenders

This proceeding shows that, for stamp classification, a mortgage deed is not treated as a mortgage with possession merely because it allows possession to be handed over later. If the document shows that the borrower keeps possession unless and until default happens, the authority may treat it as a simple mortgage.

For anyone reviewing a mortgage deed in Tamil Nadu, the wording about possession, inspection rights and default triggers can affect how the document is classified for stamp duty purposes.