D.Dis.No. 8526/P1/2023, Mortgage Without Possession Revision Petition
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued D.Dis.No. 8526/P1/2023 on 12 May 2023 concerning the stamp duty classification of a mortgage deed registered as pending document No. P.18/2023. The authority allowed the revision petition, classified the deed under Article 40(b) of the Indian Stamp Act, 1899, and set aside the Sub Registrar's demand for deficit stamp duty of Rs.1,19,60,000 and a penalty of Rs.5,000.
Purpose of the proceedings
D.Dis.No. 8526/P1/2023, issued by the Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, on 12 May 2023, decides a revision petition filed under section 56(1) of the Indian Stamp Act, 1899. The petition challenged the stamp duty classification made by the Joint II Sub Registrar, Chennai Central.
Mortgage transaction covered
The decision concerns pending document No. P.18/2023 at the Joint II Sub Registrar Office, Chennai Central. Key details are:
- The document was executed on 1 February 2023.
- It was titled an Indenture of Mortgage Without Possession of Property.
- Mr. Dodla Subbha Reddy was the executant.
- ICICI Bank Limited was the claimant.
- The loan amount was Rs.15,00,00,000.
- The deed bore stamp duty of Rs.40,000.
The Sub Registrar treated the deed as both a mortgage with possession and a power of attorney to sell immovable property granted for consideration. On that basis, the Sub Registrar determined deficit stamp duty of Rs.1,19,60,000 and a penalty of Rs.5,000.
Findings on possession and power of sale
The Chief Controlling Revenue Authority and Inspector General of Registration found that the relevant clauses permitted the mortgagee to take possession only if the mortgagor defaulted. Possession had not been transferred when the mortgage was created.
The authority also found that the power to sell was not absolute or unconditional. It was available only upon default and existed to enforce obligations under the mortgage deed. A separate clause concerning a possible sale by the mortgagor required cooperation from the mortgagee and provided that the sale proceeds would be charged in favour of the mortgagee. The authority treated this as a contingent event that might or might not occur.
The decision also referred to earlier registration circulars and proceedings which treated similar default based possession or sale clauses as part of the mortgage, rather than as a separate power granted for consideration.
Result and relevance
D.Dis.No. 8526/P1/2023 classifies document No. P.18/2023 under Article 40(b) of the Indian Stamp Act, 1899. The revision petition was allowed and the Joint II Sub Registrar's decision was set aside.
The reasoning may be relevant to owners, borrowers, lenders and registration professionals reviewing mortgage deeds where possession or a power of sale arises only after default. The ruling directly decides the classification of the specific document and parties identified in the proceedings.
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
Does a clause allowing the bank to take possession after default make this deed a mortgage with possession?
Not in this case. The authority found that possession could be taken only after default and had not been handed over when the mortgage was created.
Was the bank's power to sell treated as a separate power of attorney for consideration?
No. The authority found that the power was conditional on default and existed to enforce the mortgage obligations, so the document could not be treated as a power for consideration.
What happened to the deficit stamp duty and penalty demand?
The revision petition was allowed, and the Sub Registrar's decision imposing deficit stamp duty of Rs.1,19,60,000 and a penalty of Rs.5,000 was set aside.
How was the mortgage deed finally classified?
The Chief Controlling Revenue Authority and Inspector General of Registration classified document No. P.18/2023 under Article 40(b) of the Indian Stamp Act, 1899.
