Searching Case Laws & Precedent on Legal Query!
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Searching Case Laws & Precedent on Legal Query!
Scanned Judgements…!
Registration of mortgage not reflected in the Encumbrance Certificate does not question the mortgage's validity or affect the title of the property. The courts have consistently held that subsequent attachments or encumbrances reflected after the creation of an equitable mortgage do not impact the mortgagee's rights or the validity of sale under the SARFAESI Act. For instance, it was observed that attachment effected subsequent to the creation of equitable mortgage does not have any effect on the sale conducted by the Bank under the SARFAESI Act and has to be effaced from the encumbrance register ["SUNDARAM HOME FINANCE LTD vs STATE OF KERALA - Kerala"]. Similarly, the courts emphasized that attachments effected subsequent to the mortgage do not affect the title and ownership of the petitioner and such attachments in respect of the said properties in question will lose its legal efficacy the moment the sale is confirmed in favour ["LINTO PETERSON vs THE SUB REGISTRAR - Kerala"] ["UCO BANK Vs THE STATE OF KERALA - Kerala"].
The primary purpose of effacing attachments from the Encumbrance Certificate is to facilitate the registration of sale certificates. Courts have clarified that the only purpose for effacement of entries of attachment from the Encumbrance Certificate and the Revenue Records is registration of the Sale Certificate ["UCO BANK Vs THE STATE OF KERALA - Kerala"]. When a sale is conducted under lawful procedures, even if the encumbrance is reflected due to attachments made after the mortgage, it does not impede registration or the validity of the sale, provided the mortgage was created prior to such attachments ["UNION BANK OF INDIA vs THE SUB REGISTRAR - Kerala"] ["SUNDARAM HOME FINANCE LTD vs STATE OF KERALA - Kerala"].
Courts also noted that the attachments reflected in the Encumbrance Certificate, which are at the instance of respondents, were obtained after the date of mortgage and therefore do not affect the title and ownership ["UNION BANK OF INDIA vs THE SUB REGISTRAR - Kerala"]. The courts have consistently held that attachments subsequent to the creation of equitable mortgage do not have any effect on the sale Sajitha Nizar alias Sajitha P.M. and Others, 2020 (5) KHC 231. Moreover, a mortgage created prior to attachments remains valid, and subsequent attachments do not invalidate the mortgage or the sale ["SUNDARAM HOME FINANCE LTD vs STATE OF KERALA - Kerala"].
The courts have also clarified that the validity of the mortgage is not questioned merely because the encumbrance certificate does not reflect the mortgage ["S.J.SENTHILKUMAR Vs NIL - Madras"]. The absence of reflection in the encumbrance certificate does not invalidate the mortgage or the sale, especially when the mortgage was created earlier and subsequent attachments are made later ["STATE BANK OF INDIA vs STATE OF KERALA - Kerala"].
Analysis and Conclusion:The consistent legal position across the cited cases is that the registration of a mortgage, even if not reflected in the encumbrance certificate at the time of registration, remains valid. Subsequent attachments or encumbrances reflected after the mortgage's creation do not affect the mortgage's validity or the purchaser's rights. The courts emphasize that attachments subsequent to the mortgage do not affect the title and ownership and the sale conducted by the Bank under the SARFAESI Act is unaffected by subsequent attachments ["SUNDARAM HOME FINANCE LTD vs STATE OF KERALA - Kerala"]. Therefore, the absence of mortgage reflection in the encumbrance certificate does not question the mortgage's validity or its enforceability.
Purchasing property in India often involves scrutinizing the encumbrance certificate (EC) to uncover mortgages, liens, or other charges. But what if a registered mortgage doesn't appear in the EC? Does this invalidate the mortgage? The legal question at hand is: registration of mortgage not reflected in encumbrance certificate does not question the validity of mortgage. Generally, courts have affirmed that proper registration under the Registration Act, 1908, upholds the mortgage's validity, regardless of EC omissions. This post explores the framework, judicial views, and practical implications.
Note: This is general information based on legal precedents. Consult a qualified lawyer for advice specific to your situation.
Under the Registration Act, 1908, mortgages on immovable property must be registered to be legally enforceable and provide public notice. Section 17 mandates registration for mortgage deeds, creating a charge on the property visible in official records. M. RAMAKRISHNA REDDY VS SUB-REGISTRAR, BANGALORE - 1999 0 Supreme(Kar) 200
The Encumbrance Certificate, however, is merely an extract of registered transactions over a specified period. It lists mortgages, sales, and liens but does not prove title or ownership. Courts emphasize: ECs do not confer or prove title; they merely reflect registered transactions affecting the property during the search period. M. RAMAKRISHNA REDDY VS SUB-REGISTRAR, BANGALORE - 1999 0 Supreme(Kar) 200Varghese VS District Collector Ernakulam - 2018 0 Supreme(Ker) 915
ECs have limitations:- They cover only the requested timeframe; older mortgages may not appear if outside the period.- Equitable mortgages by deposit of title deeds often aren't reflected unless a memorandum is registered. As noted, Many a time the creation of equitable mortgage by deposit of title deeds do not get reflected in the encumbrance certificate obtained from the Sub-Registrar’s Office unless such mortgage is followed by a registered memoranda. State Bank of India VS Ujjal Kumar Das- Discrepancies arise from administrative delays or unrecorded events.
Sub-Registrars verify procedural compliance—stamping, identity, and execution—not title validity or encumbrances. The Registering Officer's duty is limited to examining procedural aspects and verifying identity and authenticity of parties, not the substantive validity or legality of the instrument or the underlying title. M. RAMAKRISHNA REDDY VS SUB-REGISTRAR, BANGALORE - 1999 0 Supreme(Kar) 200
Refusals based solely on EC entries overstep authority. In Dr. Yadla Ramesh Naidu v. Sub-Registrar, Sabbavaram, the court ruled ECs are not documents of title and cannot justify refusing registration; disputes belong in civil courts. M. RAMAKRISHNA REDDY VS SUB-REGISTRAR, BANGALORE - 1999 0 Supreme(Kar) 200
Courts consistently hold that missing EC entries don't invalidate registered mortgages:- Circular No.13450/2007 required EC and link document checks, but was deemed potentially ultra vires for exceeding statutory powers. Circulars issued by the Commissioner of Registration... may lack statutory authority if they exceed the powers conferred under the Registration Act. Ashish Simran Exports Pvt. Ltd. , rep. by its Director Ashish Kumar Ahuja VS State of Telangana, Rep. by its Principal Secretary, Registration Department - 2022 0 Supreme(Telangana) 603- Existence of a mortgage doesn't bar new registrations unless prohibited by law. The existence of a mortgage or encumbrance does not bar the registration of a valid sale or transfer. Ashish Simran Exports Pvt. Ltd. , rep. by its Director Ashish Kumar Ahuja VS State of Telangana, Rep. by its Principal Secretary, Registration Department - 2022 0 Supreme(Telangana) 603
In SARFAESI Act cases, banks enforce mortgages despite EC issues:- Equitable mortgages grant first charge; subsequent attachments are ineffective. An equitable mortgage supersedes subsequent encumbrances, establishing the mortgagee's priority. THE TRICHUR URBAN CO-OPERATIVE BANK LTD., Vs STATE OF KERALA, - 2021 Supreme(Online)(KER) 17152- Attachment effected subsequent to the creation of equitable mortgage does not have any effect on the sale conducted by the Bank under the SARFAESI Act and has to be effaced from the encumbrance register. THE TRICHUR URBAN CO-OPERATIVE BANK LTD. vs THE SUB REGISTRAR - 2024 Supreme(Online)(KER) 13659
Provisional attachments (e.g., under GST Section 83) lapse after one year and can't block registration. Subordinate rules like Rule 55-A were struck down as ultra vires. The Federal Bank Ltd. vs The Sub Registrar - 2023 Supreme(Online)(Mad) 49851
Equitable Mortgages: Created by depositing title deeds in notified towns, these bind property without deed registration but may not show in ECs. Validity persists via deposit proof. ARC Investments Castings LLP, Rep. by its Partner MD. Punit Rasesh Shah, Chennai VS Interpump Hydraulics India Pvt. Ltd. , Rep. by its Finance Manager, P. A. Arunachalam, Hosur - 2021 Supreme(Mad) 361S.J.SENTHILKUMAR Vs NIL
Discharged Mortgages: Paid-off loans require registered discharge deeds to update ECs. The grievance... is that the earlier mortgage... still continues to be reflected... despite the payment of entire amount. SRI N UMASHANKAR vs THE DEPUTY DIRECTOR - 2025 Supreme(Online)(Kar) 35230
Post-Mortgage Attachments: Courts direct EC updates post-sale certificate registration. After the registration of Ext.P1 sale certificate, the petitioner approached... to efface/delete all the attachments reflected in Ext.P3 encumbrance certificate. PREMAKUMAR DAMODARAN PILLAI Vs THE SUB REGISTRAR - 2021 Supreme(Online)(KER) 13083
Auction Sales: Under SARFAESI, sale certificates register despite prior attachments if post-mortgage. The court ordered the Sub Registrar to register the sale certificate and remove subsequent attachments within one week. THE TRICHUR URBAN CO-OPERATIVE BANK LTD., Vs STATE OF KERALA, - 2021 Supreme(Online)(KER) 17152
Circulars can't impose title adjudication on registrars. Sub-Registrars cannot deny registration solely because the property is mortgaged or because an EC shows encumbrances. Ashish Simran Exports Pvt. Ltd. , rep. by its Director Ashish Kumar Ahuja VS State of Telangana, Rep. by its Principal Secretary, Registration Department - 2022 0 Supreme(Telangana) 603
Understanding these nuances protects transactions. For tailored guidance, engage a property law expert.
Sources: Ashish Simran Exports Pvt. Ltd. , rep. by its Director Ashish Kumar Ahuja VS State of Telangana, Rep. by its Principal Secretary, Registration Department - 2022 0 Supreme(Telangana) 603M. RAMAKRISHNA REDDY VS SUB-REGISTRAR, BANGALORE - 1999 0 Supreme(Kar) 200Varghese VS District Collector Ernakulam - 2018 0 Supreme(Ker) 915PREMAKUMAR DAMODARAN PILLAI Vs THE SUB REGISTRAR - 2021 Supreme(Online)(KER) 13083SRI N UMASHANKAR vs THE DEPUTY DIRECTOR - 2025 Supreme(Online)(Kar) 35230THE TRICHUR URBAN CO-OPERATIVE BANK LTD., Vs STATE OF KERALA, - 2021 Supreme(Online)(KER) 17152THE TRICHUR URBAN CO-OPERATIVE BANK LTD. vs THE SUB REGISTRAR - 2024 Supreme(Online)(KER) 13659The Federal Bank Ltd. vs The Sub Registrar - 2023 Supreme(Online)(Mad) 49851S.J.SENTHILKUMAR Vs NILState Bank of India VS Ujjal Kumar Das
#MortgageLaw #EncumbranceCertificate #PropertyRegistration
After the registration of Ext.P1 sale certificate, the petitioner approached the 1st respondent Sub Registrar with Ext.P4 request dated 30.11.2020 to efface/delete all the attachments reflected in Ext.P3 encumbrance certificate on the immovable property covered by Ext.P1 sale certificate. ... After the registration of Ext.P1 sale certificate, the petitioner approached the 1st respondent Sub Registrar with Ext.P4 request dated 30.11.2020 to efface/de....
insolvency not registrable under the Registration Ordinance. ... There is nothing in the Registration Ordinance of 1891 which can be construed so as to give validity to a deed granted by an insolvent after his estate has vested in the assignee, or to any other instrument which, apart from any question of priority, is per se invalid. ... It mattered not to the plaintiffs whether the mortgage was discharged out of the purchase money paid by the defendant or whether th....
The grievance of the petitioner is that the earlier mortgage created by the petitioner in favour of respondent No.2 still continues to be reflected in the encumbrance certificate despite the payment of entire amount. 3. ... Learned AGA submits that the discharge certificate has already been issued on earlier occasion and it is for the petitioner to have submitted the same before the Sub-Registrar for registration. Upon such registration, the encumbrance#HL_E....
They say that, however, when they presented Ext.P3 Sale Certificate before the 2nd respondent – Sub Registrar, he refused to accede to it, saying that there are various attachments over the property, as are reflected in Ext.P5 Encumbrance Certificate. ... Therefore, if the equitable mortgage is of the year 2010, as has been claimed by them, then certainly all other attachments, as reflected in Ext.P5 Encumbrance Certificate, which are subsequent to ....
Thus it is trite law that attachment effected subsequent to the creation of equitable mortgage does not have any effect on the sale conducted by the Bank under the SARFAESI Act and has to be effaced from the encumbrance register. ... Sajitha Nizar alias Sajitha P.M. and Others, [2020 (5) KHC 231] and contends that the attachment effected subsequent to the creation of equitable mortgage will not affect the right of the Bank to sell the mortgaged property and the attachment has to be effaced from the #HL_....
encumbrance certificate. ... not lapsed or No Objection Certificate is not granted by the appropriate authority or raising of the attachment is not done. ... (i) The registering officer before whom a document relating to immovable property is presented for registration, shall not register the same, unless the presentant produces the previous original deed by which the executant acquired right over the subject property and an Encumbrance#HL_....
encumbrance certificate. ... not lapsed or No Objection Certificate is not granted by the appropriate authority or raising of the attachment is not done. ... (i) The registering officer before whom a document relating to immovable property is presented for registration, shall not register the same, unless the presentant produces the previous original deed by whicht he executant acquired right over the subject property and an Encumbrance#HL....
By contrast, the alleged mortgage in favour of Axis Bank is not reflected in the encumbrance certificate. ... According to the alleged purchaser, the mortgage in favour of Mr.Yelamarthi Ashwin was executed in view of the fact that the encumbrance certificate did not disclose a subsisting mortgage in favour of Axis Bank. ... By drawing reference to the encumbrance certificate, it ....
The learned counsel appearing for the petitioner would submit that the attachments reflected in the Encumbrance Certificate (Ext.P7) are at the instance of respondents 4, 5, and 6. It is submitted that the attachments in question were obtained after the date of mortgage in favour of the petitioner. ... to recover any dues to the Government will not be affected by the registration of the sale certificate. ... On the sale being confirmed in favour of t....
Constitution of India and answered in the negative, the direction issued for a writ of mandamus to register the sale deed was not the question that was referred instead; it was only an observation which does not have a question of law. ... Since the encumbrance certificate omitted to reflex the attachment and the sale certificate is not in the prescribed format, they cannot be acted upon by the 3rd respondent. It is also contended that though the fu....
Also, to be noted, the Encumbrance Certificate of this property does not indicate anything about the deposit of title deed or equitable mortgage of the subject property alleged to have created in favour of Allahabad Bank. Above all, the assignment deed executed at Mumbai, is in respect of immovable property at Hosur and that said assignment deed is not registered at Tamil Nadu. It is also pertinent to recall that RW-2 during the cross examination had deposed that he did not mention about this suit and decree passed in O.S.No.13/2011 in his reference to BIFR.
This prevented the plaintiffs from getting layout approval from the Pondicherry Development Authority (PDA). Therefore, encumbrance certificate was reflecting the mortgage. Since the property for the layout must be free from encumbrance, in the absence of clearance certificate, the application for layout plan approval was not entertained by the Pondicherry Development Authority (PDA). 3. The 1st defendant/K.S.Sundaram, who has availed loan from the Pondicherry Industrial Promotion Development and Investment Centre (hereinafter referred as “PIPDIC”), mortgaging the suit prop....
Since it is a mortgage by deposit of title deeds, it is not reflected in the encumbrance certificate also. Only in the additional written statement, for the first time the defendants stated that the suit property was mortgaged by them with the SBI, prior to the sale agreement entered into between the plaintiff and the defendants. SBI took steps to realize the loan amount by bringing the suit property to auction. With a view to defraud the plaintiff, the defendants committed default in payment of the loan amount to the bank.
In order to overcome difficulties of delay in realising dues, through a long process of litigation in the Courts, the Securitization Act has come into force which has the approval of highest Court of the land. This may lead to serious consequences i.e. innocent public believing that the property is not encumbered may acquire interest in such property by parting with their money. Many a time the creation of equitable mortgage by deposit of title deeds do not get reflected in the encumbrance certificate obtained from the Sub-Registrar’s Office unless such mortgage is followed by a re....
In order to overcome difficulties of delay in realizing dues, through a long process of litigation in the Courts, the Securitization Act has come into force which has the approval of highest Court of the land. Many a time the creation of equitable mortgage by deposit of title deeds do not get reflected in the encumbrance certificate obtained from the Sub-Registrar's Office unless such mortgage is followed by a registered memoranda. This may lead to serious consequences i.e. innocent public believing that the property is not encumbered may acquire interest in such property b....
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