|Mandatory Registration of Equitable Mortgages in Maharashtra
The Government of Maharashtra has expanded the scope of the Registration Act, 1908 ("Registration Act") by way of an amendment in respect of equitable mortgages made in respect of immovable property situated in the State of Maharashtra. Key amendments are discussed below:
- Compulsory Registration
The following documents, which are executed on or after April 01, 2013 are henceforth required to be compulsorily registered with the concerned Sub-registrar of Assurances:
Agreement relating to deposit of 'title deeds' where such deposit has been made by way of security for the repayment of a loan or an existing or future debt;
- Sale certificate issued by any competent officer or authority under any Recovery Act; and
- Irrevocable power of attorney relating to transfer of immovable property.
- Equitable Mortgage - Notice of Intimation
In the event a Mortgagor has created a mortgage by deposit of title deeds over an immovable property located in Maharashtra without an agreement, then such Mortgagor would be required to send a 'notice of intimation' in the prescribed form to the Registrar having jurisdiction over such immovable property, within 30 (Thirty) days from the date of creation of such mortgage.
- Any failure on part of the Mortgagor to file such 'notice of intimation' with the Registrar within the aforementioned time period is punishable with imprisonment and fine. Further any subsequent transaction by the Mortgagor with any third party in respect of such immovable property would be rendered void and such third party will be entitled to recover the amount paid by it to the Mortgagor together with interest and damages.
This amendment now makes Maharashtra one of the few states that require a mortgage by deposit of title deeds to be registered or recorded with the Registrar compulsorily. Further, as a necessary consequence, the 'notice of intimation' would also be required in transactions pertaining to mortgage by deposit of title deeds executed outside Maharashtra relating to immovable property situated in Maharashtra.