Drafting of Document(s) in Relation to Tacking of Property Already Mortgaged , A/C Mr. X.

Mr. Z

Address….

Dear Sir,

RE:     DRAFTING OF DOCUMENT(S) IN RELATION TO TACKING OF PROPERTY ALREADY MORTGAGED, A/C MR. X.

We refer to your letter no. …………….. dated 08 October, 2007 and letter no. ……….. dated 08 November, 2007 and our legal opinion dated 20 October, 2007 on the above subject.

From perusal of your letter and the documents provided, it appears that, Bank 1 (“the Bank”) has approved a Term Loan Facility of Taka 300.00 (three hundred) lac vide Sanction letter dated 01.10.2007 (“NEW Sanction Letter”) in favour of Mr. X,  proprietor of M/s. Company 1 to build a multi-storeyed residential building over land measuring 11 (eleven) Katha at Plot No. ……………………

Mr. X as proprietor of Compqany 1 has already been enjoying certain credit facilities from the Bank for some time against, inter alia, registered Deed of Mortgage dated 08.05.2001  to securing a facility of Tk. 75,00,000.00 (“Deed of Mortgage”). The credit facilities has been lastly renewed vide the Bank’s Sanction letter dated 11 October 2006 (“OLD Sanction Letter”). Various facilities of an aggregate amount of Tk. 300 lac was sanctioned by this OLD Sanction Letter. Under “Collateral and control” of the OLD Sanction Letter it was stated that additional charge shall be created on the Land to cover the enhanced portion of the approved facilities. However, we have not been provided with any further deed of mortgage over the Land securing the enhanced facilities under the OLD Sanction Letter.

Therefore, the total facilities to be enjoyed by Mr. X shall be of an aggregate amount of Tk. 600 Lac (Tk. 300 under the NEW Sanction Letter and Tk. 300 under the NEW Sanction Letter). However, the Bank at present only holds the Deed of Mortgage which secures only upto Tk. 75 lac.

In light of the above, we suggest the Bank to redeem the Deed of Mortgage, which secured the facilities of Tk. 75 lac, and obtain a fresh registered deed of mortgage over the Land securing the aggregate facility amount of Tk. 600 Lac.

We are of the opinion that the interest of the Bank may not be protected by ‘tacking’ the mortgaged land because, as stated in our previous opinion, the sub-registers in Bangladesh are not familiar with the method of ‘tacking’ and as such will not register the relevant document/agreement documenting ‘tacking’ and without registration the same shall not be valid and effective in accordance with Section 49 of the Registration Act 1908.

In the above circumstances, we are awaiting your instruction for drafting the necessary deed of mortgage and other relevant documents.

Thanking you.

Yours faithfully,

………………….

For: “The Lawyers & Jurists”

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