D.Dis.No.55426/P1/2018, Simple Mortgage Revision Order
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, issued order D.Dis.No.55426/P1/2018 dated 23 May 2024, allowing a revision petition concerning mortgage Document No. P.13/2014 registered at the Sub Registrar Office, Villivakkam. The authority classified the deed as a simple mortgage, set aside the District Registrar's classification as a mortgage with possession, and therefore overturned the related demand for deficit stamp duty and penalty.
What the order decides
The Chief Controlling Revenue Authority and Inspector General of Registration, Chennai, reviewed Document No. P.13/2014, a deed of mortgage executed on 23 January 2014 at the Sub Registrar Office, Villivakkam. The deed secured Rs.50,00,000 and bore stamp duty of Rs.50,000.
The Sub Registrar, acting in the District Registrar cadre, had treated the deed as a mortgage with possession under Article 40(a) of the Indian Stamp Act, 1899. That classification resulted in a demand for Rs.1,50,000 as deficit stamp duty and Rs.1,000 as penalty.
Order D.Dis.No.55426/P1/2018 dated 23 May 2024 sets aside that decision. It classifies the document as a simple mortgage under Article 40(b) and allows the revision petition filed by Edelweiss Housing Finance Limited.
Why the classification was changed
The Chief Controlling Revenue Authority examined the mortgage terms, the connected records and the petitioner's arguments. The important findings were:
- The mortgagor was required to keep the mortgaged property in a good and substantial state of repair while the security continued.
- Edelweiss Housing Finance Limited could enter and possess the property only after an event of default.
- These clauses showed that possession remained with the mortgagor when the mortgage was created.
- A reference in the deed to a first legal mortgage in English form did not, by itself, make the transaction a mortgage with possession.
- The authority relied on an earlier Inspector General of Registration proceeding which treated an English mortgage as a simple mortgage rather than a mortgage with possession.
Who is affected
Order D.Dis.No.55426/P1/2018 directly concerns the parties to Document No. P.13/2014, including the mortgagee formerly known as Edelweiss Housing Finance Limited and later identified as NIDO Home Finance Limited. The petition also stated that the loan had been assigned to Edelweiss Asset Reconstruction Company through Document No. 5565/2021 at the Sub Registrar Office, Pallavaram.
Property buyers, borrowers and registration professionals may find the reasoning relevant when reading mortgage clauses. In this case, a lender's right to take possession only after default did not mean that possession had already been transferred when the mortgage was executed.
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.13/2014 finally treated as a mortgage with possession?
No. The Chief Controlling Revenue Authority 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 borrower?
The deed required the mortgagor to maintain the property and allowed the mortgagee to enter and possess it only after an event of default. The authority found that these terms showed possession remained with the mortgagor.
What happened to the deficit stamp duty and penalty demand?
The District Registrar's order imposing Rs.1,50,000 as deficit stamp duty and Rs.1,000 as penalty was set aside when the revision petition was allowed.
Which mortgage deed did the proceedings cover?
The proceedings covered Document No. P.13/2014, executed on 23 January 2014 and filed at the Sub Registrar Office, Villivakkam. It secured Rs.50,00,000 and bore stamp duty of Rs.50,000.
