RE: Registered Mortgage A/C. Company 1.
We refer to your letter dated 06 February 2007 and our letter no. ……………….. dated February 08, 2007 on the above subject.
From perusal of your letter and the documents provided it appears that BANK 1 is going to extend credit facilities to Company 1 against registered mortgage over the land and properties in the name of Company 2.
In this regard, you have enclosed some land documents and the memorandum and Articles of Association of Company 2.
You have requested our legal opinion regarding, whether the provided land documents are enough for the creation of Registered Mortgage or whether we would require to see further documents. You have also sought our opinion regarding whether Company 2 is authorized by it’s Memorandum of Association to execute third party mortgage.
We need to peruse the following documents in relation to the land and properties in the name of Company 2 before we could provide our opinion:
1. Mutation Khatians in the name of present owners.
2. Up to date Ground rent receipt.
3. Up to date Municipal tax record.
4. Non-Encumbrance Certificate.
5. Valuation Certificate.
You are, therefore, requested to send us the aforesaid document as soon as possible.
We have perused the Memorandum & Articles of Association of Company 2. Upon perusal of the object clauses of the Memorandum of Association we could not find any clause authorising Company 2 to create third party mortgage for securing the loan of another Borrower. It is our opinion that, Company 2 shall need to change its Memorandum of Association by insertion of another object clause giving the Company power to execute third party mortgages, before it could execute third party mortgage for securing the loan of Company 1.
If you have any further query, please do not hesitate to contact the undersigned.
For: “The Lawyers & Jurists”