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

Dev Malhotra has a registered mortgage deed over his factory in favour of Bank A. He later executes and registers a second mortgage deed over the same property in favour of Bank B. Under section 48 of the Registration Act, 1908 as given, which deed takes effect against the other?

Bank A's earlier registered mortgage takes effect against Bank B's later registered mortgage. The proviso to section 48 of the Registration Act provides that a mortgage under section 58 of the Transfer of Property Act prevails over a subsequently executed and registered mortgage deed on the same property.

  1. AThe first registered mortgage takes effect against the subsequently executed and registered mortgage deedCorrect
  2. BThe second mortgage prevails as it is later in time
  3. CBoth rank equally since both are registered
  4. DWhichever bank first takes possession prevails over the other

Explanation

The proviso to section 48 states that a mortgage as defined in section 58 of the Transfer of Property Act shall take effect against any mortgage-deed subsequently executed and registered relating to the same property. Hence Bank A prevails. Possession is not the test under this proviso.

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