Modification of charge

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CA. HARISH AGARWAL (Querist)
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17 May 2012 Dear Sir,

I am a practicing CA, one of our client has approached us to modify its already created charge as the bank has informed it that the value of property against the given loan is considered to be less the the stipulated norms at the time of giving the loan. Now it has done valuation and want that the charge to be modified with the newly valued price. However there is no any change in the facility sanctioned by the bank.

I want to know as just because of change in valuation of the mortgaged property is it required to modify the charge.

Ajay Mishra

Ajay Mishra (Expert)
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17 May 2012 Hi

If the terms and conditions of sanctioned loan is going to be changed after creation of charges and new agreement or supporting documents are available and bank give the letter for such modification then you can file the same through" Modification of Charges" otherwise not.

Regards

CA. HARISH AGARWAL

CA. HARISH AGARWAL (Querist)
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17 May 2012 This point has arisen during the course of renewal of the loan as the higher authorities of the bank has instructed it to modify the charge. There is no document other than renewal papers and valuation report.

Ajay Mishra

Ajay Mishra (Expert)
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17 May 2012 Hi

Whether renewal paper is signed by both party or not.

Also take modification letter from bank and attach the same with Form-8 along with renewal papers but not valuation report.

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CA. HARISH AGARWAL

CA. HARISH AGARWAL (Querist)
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17 May 2012 Thanks for ur valuable opinion.

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