Legal Question in Business Law in India

Can a second mortgage created for a property?

Whether it should be registered?

Whether a company lend a loan to his customers without any specification in the object in memorandum of association?

Whether a Ltd company lend loans to its customers without obtaining lending license from the competent authorities ?


Asked on 1/03/17, 11:21 pm

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

04.01.2017

Dear Sir / Madam,

A second mortgage (paripasu charge) of a property cannot be created without the explicit approval and consent of the Bank / Institution with which the first mortgage has been created.

In India, a mortgage deed requires to be stamped and registered.

If the object clause of in the Memorandum & Articles of Association of the limited Company does not permit it to give loans to its customers, if it does, it will be deemed a violation as per law.

In India, this activity falls in the purview of the Reserve Bank of India.

Regards,

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Answered on 1/03/17, 11:45 pm


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