Hypothecation & mortgage of charge bank asking to create new charge

989 votes

Dear sir, earlier charge created was on hypothecated securities and since equitable mortgage is created newly, obviously Bank will ask to registrar charge even on immovable properties. However, it is modification on assets on company and no double entry will appear in ROC records. Even if two charges are registered, that does not become entitlement of the Bank to recovery in absence of actual lending.

Advocate Sunil Kadam LawRato

1000 votes

As per your abovesaid query:
On 20.04.2016 we had a Hypothecation Deed for Consortium for Rs. 353.00 cr & created a Charge with ROC on 24.05.2016. As per Sanction terms, we entered into Mortgage by way of Memorandum of Deposit of Titles for that same Consortium Lending. Bank says that this is fresh documents and we need to create a new charge but if we create a new charge then 2 charges of Rs. 353 crores will be reflecting in ROC while the actual scenario is that the lending amount is only Rs. 353.00 crores. Kindly guide as per law what will be the case. Whether we need to create separate charge or modify the charge

I opine that 2nd time charge should be a modification only as you have taken money at one time only from bank

Advocate Sanjay Lalit LawRato

708 votes

Hypothecation need to be revised as per requirement.
For Mortgage it is necessary to create charge for every time you do the document. As creation of charge is registered then it is recorded in system and get reflected. But from law point of view no need to create separate charge just modify it.

Advocate Bharat Pandirao Pawar LawRato