Banking · Mortgages under Transfer of Property Act
Mr. Khanna owns a residential plot in a town not notified by the State Government for creating equitable mortgages. To secure a loan from a bank, he travels to a notified town, delivers the title deeds to the bank's branch there, and signs the Memorandum of Entry in that notified town. Is this equitable mortgage legally valid under the Transfer of Property Act, 1882?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The mortgage is valid only if registered with the Sub-Registrar where the plot is located.
- 2The mortgage is invalid because an equitable mortgage cannot be created for loan amounts exceeding 10 Lakhs.
- 3The mortgage is valid because only the delivery of title deeds must take place in a notified town, regardless of where the property is located.✓
- 4The mortgage is invalid because the property itself must be located in a notified town.
Correct answer
The mortgage is valid because only the delivery of title deeds must take place in a notified town, regardless of where the property is located.
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