A bank mortgage was created on my property, located in Borivali, Mumbai, using a forged power of attorney without my knowledge. The bank has now issued a notice under SARFAESI. Can I challenge the mortgage itself on the ground that it was created fraudulently and seek to have it declared void?
Yes, and this is an important protective question for property owners in Mumbai who discover that a mortgage was created against their property through fraudulent means — perhaps through forged signatures, impersonation, or a fabricated power of attorney — since Indian law provides clear remedies allowing the genuine owner to challenge such a fraudulent mortgage and secure redemption or cancellation of the improperly created encumbrance. Under the Transfer of Property Act, 1882, a valid mortgage requires the mortgagor to have genuine title and authority to create the mortgage in the first place, and where the underlying mortgage document itself was fraudulently executed, this fundamental defect affects the mortgage's very validity.
Where a person discovers that their property has been fraudulently mortgaged — for instance, through forged signatures purporting to be theirs, or through someone falsely claiming ownership or power of attorney authority they never actually possessed — the genuine owner can file a suit seeking a declaration that the mortgage is void and of no legal effect, along with cancellation of the mortgage document under Section 31 of the Specific Relief Act, 1963, since a mortgage created through fraud lacks the essential valid consent that any legitimate encumbrance requires from the actual property owner.
The critical distinction in such cases often lies in whether the bank or financial institution that accepted the fraudulent mortgage as security exercised proper due diligence before disbursing the loan, since if the lending institution failed to verify the mortgagor's actual title and identity through reasonable standard banking practices, this failure doesn't validate the fraudulent mortgage against the genuine owner, but it may affect the lending institution's own remedies against the actual fraudster who perpetrated the deception. The genuine property owner's rights against the fraudulent mortgage generally remain protected regardless of the lender's own due diligence failures, since the owner never actually consented to encumber their property in the first place.
Where the fraudulent mortgage has already been partially enforced, or where the lender has initiated recovery proceedings under the SARFAESI Act, 2002 based on the fraudulent security, the genuine owner needs to act with particular urgency, seeking both cancellation of the underlying fraudulent mortgage document and, if necessary, an injunction restraining any further enforcement action, along with parallel criminal complaints against those responsible for the fraud under the forgery and cheating provisions of the Bharatiya Nyaya Sanhita, 2023.
Given how discovering a fraudulent mortgage against your property requires both urgent civil remedies and often parallel criminal action, immediate and comprehensive legal response is essential to protect your ownership rights. The team at Aapka Legal Advice helps property owners challenge and cancel fraudulent mortgages while pursuing appropriate criminal action against the perpetrators. The Top Property Lawyers in Mumbai team has successfully secured cancellation of fraudulent mortgages and restrained wrongful enforcement action across Mumbai, supported by a panel of retired judges and experienced criminal lawyers for the parallel forgery proceedings these cases typically require. If you've discovered your Mumbai property was fraudulently mortgaged without your knowledge or consent, urgent legal action to cancel the mortgage and restrain any enforcement proceedings is essential to protecting your ownership.