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CS Professional · Drafting, Pleadings and Appearances · Drafting of Agreements, Deeds and Documents

Nisha mortgages her factory to Bank A by a registered mortgage deed. Later she executes another mortgage deed of the same property to Bank B, also registered. Bank B argues that, as the later deed, it should prevail. How does the proviso to the Registration Act section on registered documents and oral agreements treat this?

Bank A prevails. The proviso states that a mortgage as defined in section 58 of the Transfer of Property Act, 1882 takes effect against any mortgage-deed subsequently executed and registered relating to the same property, so the earlier mortgage ranks ahead of the later one.

  1. ABank B prevails because later deeds override earlier ones
  2. BA mortgage as defined in section 58 of the Transfer of Property Act, 1882 takes effect against a mortgage-deed subsequently executed and registered relating to the same property, so Bank A prevailsCorrect
  3. CNeither bank prevails until a court orders otherwise
  4. DBoth rank equally regardless of the date of execution

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. Bank A's earlier registered mortgage therefore has priority over Bank B's later one. Later execution gives no advantage.

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