Bombay HC: Applicability of Section 4 vs Section 5 of the Maharashtra Stamp Act to a Common Mortgage Deed.

 Issue- Whether a single mortgage deed securing obligations under multiple loan agreements should be treated as:

i) an instrument relating to several distinct matters/transactions (Section-5) or

ii) an instrument dealing with multiple documents used for one single transaction (Section-4).

Bombay High Court – Neepa Real Estate Pvt. Ltd. v. State of Maharashtra (23-12-2025) read with Supreme Court Chief Controlling Revenue Authority vs Coastal Gujarat Power Limited and Others held that-

Where a single mortgage deed secures liabilities arising out of multiple independent loan agreements, each constituting a separate and enforceable transaction and each requiring creation of security, such mortgage deed is treated as an instrument relating to several distinct transactions under Section 5 of the Stamp Act.

Section-4 applies only where there is one composite loan transaction and multiple documents are merely procedural or incidental.

If one mortgage deed secures more than one independent loan then law treats it as multiple transactions and Section-5 of the Stamp Act applies.

Print Page