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Kiran Steels deposited title-deeds of its plot with a bank in Bengaluru, a town not named in section 58(f). The State Government has issued no notification covering Bengaluru for this purpose. Which statement is correct as per section 58(f)?

It does not qualify unless the town is Calcutta, Madras, Bombay or one notified by the State Government in the Official Gazette. Section 58(f) limits this form of mortgage to those towns, so the draft must verify the location first.

  1. AThe deposit creates a valid mortgage by deposit of title-deeds because any town qualifies
  2. BThe deposit creates such a mortgage only if it is registered within four months
  3. CThe deposit is valid only if the creditor is a scheduled bank
  4. DThe transaction does not qualify as a mortgage by deposit of title-deeds unless the town is Calcutta, Madras, Bombay or a town notified by the State GovernmentCorrect

Explanation

Section 58(f) confines this form of mortgage to the towns of Calcutta, Madras and Bombay and any other town the State Government specifies by notification in the Official Gazette. Without a notification, a Bengaluru deposit does not fit the definition. The other options add conditions found nowhere in the definition.

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