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CS Professional · Drafting, Pleadings and Appearances · Laws relating to Drafting and Conveyancing

Deepa registered a mortgage deed over her warehouse in favour of Bank A. Later, she executed and registered another mortgage deed of the same warehouse in favour of Bank B. Under section 48 of the Registration Act, 1908, how do the two mortgages rank?

Bank A's mortgage takes priority. The proviso to section 48 provides that a mortgage defined in section 58 of the Transfer of Property Act takes effect against any mortgage-deed subsequently executed and registered relating to the same property, so the earlier registered mortgage prevails.

  1. ABank B's, as the later deed overrides the earlier
  2. BBoth rank equally irrespective of dates
  3. CThe mortgage first executed and registered takes effect against the mortgage-deed subsequently executed and registeredCorrect
  4. DNeither takes effect until possession is delivered

Explanation

The proviso to section 48 states that a mortgage as defined in section 58 of the Transfer of Property Act takes effect against any mortgage-deed subsequently executed and registered relating to the same property. So Bank A ranks first. Delivery of possession is not required for this priority.

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