Resolution for Authorisation to Mortgage for Secured Loan
Approve a company secured loan, identify the immovable property, authorise the mortgage and complete execution, registration and ROC charge requirements.
What should the Board approve?
The resolution should approve the secured facility, mortgage type, exact property, secured amount, lender priority and authorised signatory. It should permit execution or title-deed deposit, stamping, registration and CHG-1 filing. The property schedule must match the title record and the security documents; a broad reference to "company property" is not enough.
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When is a mortgage Board resolution needed?
Use the resolution when a company will borrow against land, a building, office, factory, warehouse or another immovable property owned by it. The lender needs evidence that the company approved both the borrowing and the transfer of a security interest in the identified property.
This format is for a company mortgaging its own property to secure its own borrowing. If the property belongs to a director, promoter or group company, or if the company secures another person's loan, separate owner consent and Sections 185/186 analysis are required.
Before sanction
The Board may approve a maximum facility and identified property while authorising negotiation within defined limits. Do not leave the property itself open-ended.
After sanction
Refer to the lender, sanction date, facility amount, mortgage method, security priority and documents placed before the meeting.
Board resolution authorising mortgage for secured loan
Replace every highlighted placeholder. Select the actual mortgage method and priority from the lender's approved security documents; do not keep alternative wording that makes the resolution uncertain.
CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF [COMPANY LEGAL NAME] HELD ON [DATE] AT [TIME] AT [VENUE / THROUGH VIDEO CONFERENCING]
"RESOLVED THAT pursuant to Section 179(3)(d) and other applicable provisions of the Companies Act, 2013, the Articles of Association of the Company and subject to approvals required under Section 180, consent of the Board be and is hereby accorded to avail [NATURE OF FACILITY] not exceeding INR [AMOUNT] from [FULL LEGAL NAME OF LENDER / SECURITY TRUSTEE] for [PURPOSE] on the terms of the sanction letter dated [DATE] and finance documents placed before the meeting.
RESOLVED FURTHER THAT as security for all monies payable under the facility documents, the Company approves creation of a [FIRST / EXCLUSIVE / PARI PASSU / SECOND] mortgage and charge in favour of [LENDER / SECURITY TRUSTEE] over the immovable property more particularly described in Schedule A below, together with all buildings, structures, fixtures, easements and appurtenant rights legally capable of being secured.
RESOLVED FURTHER THAT the mortgage be created by [EXECUTION AND REGISTRATION OF MORTGAGE DEED / DEPOSIT OF SPECIFIED TITLE DEEDS WITH INTENT TO CREATE SECURITY / EXTENSION OF EXISTING MORTGAGE], in the manner advised by the lender's property counsel and permitted by applicable property, stamp and registration law.
RESOLVED FURTHER THAT Mr./Ms. [NAME], [DESIGNATION], DIN [IF DIRECTOR] be and is hereby authorised [SEVERALLY / JOINTLY] on behalf of the Company to negotiate and accept the approved terms; sign and execute the loan agreement, mortgage deed, memorandum or declaration relating to deposit of title deeds, undertaking, power of attorney and related security documents; deliver the original title documents listed in Schedule B; and acknowledge creation or continuation of security.
RESOLVED FURTHER THAT the authorised person may appear before the Sub-Registrar or other authority, admit execution, present documents, pay applicable stamp duty and registration fees from Company funds, complete identification and biometric formalities where required, receive registered documents and make non-material corrections consistent with the approved facility and property schedule.
RESOLVED FURTHER THAT the authorised person be and is hereby empowered to sign and submit CHG-1, MGT-14 and other applicable corporate filings, provide information required for Central Registry filing by the secured creditor, obtain certificates and acknowledgements, and do all acts necessary to give effect to this resolution.
RESOLVED FURTHER THAT a certified true copy of this resolution be furnished to the lender, security trustee, Sub-Registrar, Registrar of Companies and any authority or professional requiring it, and each may act upon it until written notice of modification or withdrawal is received from the Company."
For [COMPANY LEGAL NAME]
________________________
Name: [NAME]
Designation: [DIRECTOR / COMPANY SECRETARY]
DIN / Membership No.: [DETAIL]
Date: [DATE]
Place: [PLACE]
Company seal, if adopted and required
Drafting note: This sample assumes the Company owns the property and secures its own loan. A lender's prescribed format and property counsel's security description should control the final execution copy.
Property schedule for the mortgage resolution
The schedule should identify one legally traceable property. Copy details from verified title and revenue or municipal records rather than from a marketing brochure, electricity bill or informal address.
Schedule A: immovable property
Schedule B: title documents to be deposited
Legal basis for mortgage authorisation
A secured loan combines company borrowing, property security and public-record filings. Each layer must be completed independently.
- Section 179(3)(d): borrowing money is a Board power exercised by a resolution passed at a Board meeting.
- Section 180(1)(c): where applicable, member approval is required when aggregate borrowing crosses paid-up share capital, free reserves and securities premium, excluding qualifying temporary loans.
- Section 180(1)(a): obtain transaction-specific advice where the security and enforcement rights affect the whole or substantially whole of an undertaking.
- Section 77: a company creating a charge over property or assets must register particulars with the Registrar, beginning with a 30-day period.
- Transfer of Property Act Sections 58 and 59: define mortgage types and when a registered instrument is required.
- Registration Act Section 17: requires registration of specified instruments creating or limiting rights in immovable property, subject to the applicable legal framework.
- State law: stamp duty, title-deed mortgage notices, memorandum registration and local presentation procedures vary by state.
Do not mortgage from an unverified address line
Title, borrowing limits, existing charges and the lender's security draft should be reviewed before the Board signs off.
Is a Board resolution enough to mortgage property?
The answer depends on company category, total borrowing, the economic importance of the secured property, existing approvals and the articles.
| Situation | Usual approval route | Critical check |
|---|---|---|
| Eligible private company securing own loan | Board resolution under Section 179. | Confirm current private-company exemptions, annual-filing condition, articles and lender covenants. |
| Public company within borrowing limit | Board borrowing and mortgage resolution. | Test the proposed facility against existing borrowing and approved security powers. |
| Borrowing above Section 180 limit | Special resolution specifying the overall borrowing ceiling plus Board transaction approval. | The mortgage should stay within the member-approved limit and conditions. |
| Whole or substantially whole undertaking implicated | Transaction-specific analysis under Section 180(1)(a) and member approval where applicable. | Use the statutory undertaking and value tests, not only the property's book name. |
| Property already charged | Board approval subject to existing lender consent and agreed ranking. | Inter-creditor, pari passu, second-charge and negative-lien restrictions. |
| Third-party borrower's loan | Separate Board/member approvals after Sections 185 and 186 review. | Do not use the own-borrowing resolution without modification. |
Who should be authorised to create the mortgage?
Choose a person who can complete execution, title-deed delivery, registration and company filings. The lender or Sub-Registrar may require a director or a specifically empowered representative.
Common signatories
A director, managing director, company secretary, CFO or principal officer may be named according to the articles, lender requirements and document-execution rules.
Registration authority
State expressly whether the person may present and admit execution, appear before the Sub-Registrar, pay duty and fees, correct clerical errors and collect the registered document.
A general banking authority may not be enough to transfer an interest in immovable property. If a power of attorney is used, its execution, stamp and registration treatment should be checked in the state where the property and registration office are located.
Documents to review before passing the resolution
- Certificate of incorporation, memorandum, articles and current MCA master data.
- Lender sanction letter, facility agreement draft and security term sheet.
- Latest audited financial statements and complete existing borrowing schedule.
- Member resolutions setting borrowing or disposal limits, if any.
- Primary title deed and complete title chain for the review period advised by property counsel.
- Encumbrance search, MCA charge search and existing-lender NOC or pari passu consent.
- Mutation, record of rights, property tax receipts and revenue or municipal records.
- Approved plan, land-use conversion, occupancy or completion certificate where relevant.
- Leasehold lessor or development-authority permission where the title requires it.
- Draft mortgage deed, memorandum or title-deed declaration and exact list of originals.
- Valuation, legal opinion and insurance required by the lender.
Registered mortgage vs deposit of title deeds
Do not describe every title-deed transaction as an "equitable mortgage" without checking how the security is actually created and recorded.
| Point | Registered mortgage | Mortgage by deposit of title deeds |
|---|---|---|
| Creation | Created through a mortgage instrument executed and registered as required. | Created by delivering title documents to the creditor or agent at an eligible location with intent to create security. |
| Core document | Mortgage deed containing property, debt, security and enforcement terms. | Title-deed delivery and intention; lender normally records the deposit through a memorandum, declaration or confirmation. |
| Transfer of Property Act | Section 59 generally requires a registered instrument signed by mortgagor and attested by at least two witnesses for ordinary secured amounts. | Section 58(f) recognises mortgage by deposit of title deeds in specified or notified towns. |
| State treatment | Stamp duty and registration fee depend on the state, amount, property and instrument. | State stamp, notice, intimation or registration rules may apply to the memorandum or transaction. |
| Company filing | CHG-1 and other applicable company filings remain separate. | CHG-1 and other applicable company filings remain separate. |
Whether a memorandum merely records an earlier deposit or itself creates or confirms the security can change its stamp and registration treatment. The final wording should come from local property counsel, not from a generic template.
How to approve and execute the mortgage
Verify title
Confirm company ownership, property identifiers, originals, encumbrances and authority restrictions.
Check limits
Review articles, existing borrowing, Section 180 approvals, prior charges and lender covenants.
Call the meeting
Circulate the sanction, property schedule, legal opinion and security draft with the Board agenda.
Pass and minute
Approve the facility, secured amount, property, ranking, mortgage method and signatories.
Create security
Execute and register the deed or deposit title documents with the required intent and records.
Complete filings
File CHG-1 and applicable resolutions, collect certificates and verify lender registry action.
CHG-1, MGT-14, registration and CERSAI
These records operate under different laws. One filing does not automatically complete another.
| Record | Purpose | Responsibility / control |
|---|---|---|
| Mortgage deed / title-deed record | Creates or evidences the property security in the form required by applicable law. | Company and lender follow local stamp, execution, registration and title-delivery requirements. |
| CHG-1 | Registers creation or modification of a company charge other than a debenture-related charge. | The company should file within the Section 77 period, beginning with 30 days from charge creation. |
| MGT-14 | Files specified Board or member resolutions with the Registrar. | Assess Section 179 resolution, private-company exemption and every special resolution separately. |
| CERSAI / Central Registry | Records the security interest under the SARFAESI Central Registry framework. | The secured creditor commonly files; the company should provide accurate property and borrower data and verify completion. |
| Satisfaction / release | Removes or records release of security after repayment. | Obtain lender documents, retrieve originals and complete ROC, property and registry release steps. |
Property and title due-diligence controls
A resolution does not cure defective title, an undisclosed charge or a restriction on mortgage. Confirm the security package before delivering originals.
Ownership and authority
The company name must appear in the title chain, and the person executing must have valid corporate authority. Leasehold and development-authority properties may require prior consent.
Priority and encumbrance
Search property and MCA records, reconcile every existing lender and obtain required NOC, pari passu or second-charge consent before claiming a security ranking.
- Prepare a signed inventory of every original handed to the lender and obtain acknowledgement.
- Confirm that survey, area, boundaries and title deed numbers agree across all security documents.
- Check pending litigation, acquisition notices, attachment, tax dues and occupancy restrictions.
- Do not represent copies as originals or deposit documents that cover a different property.
- Keep scanned records, legal opinion, valuation and lender acknowledgement in the company file.
Mortgage securing another person's or company's loan
When the company is not the borrower, the transaction becomes provision of security for another person's loan. The standard own-borrowing resolution is incomplete.
| Check | Why it matters | Possible approval |
|---|---|---|
| Section 179(3)(f) | Providing security for a loan is a specified Board power. | Board resolution at a meeting with transaction-specific limits. |
| Section 185 | Security connected with loans to directors, firms or persons in whom directors are interested may be prohibited or conditional. | Special resolution and principal-business-use conditions can apply in permitted cases. |
| Section 186 | Security for another body corporate or person counts toward statutory limits. | Consent of all directors present; special resolution where limits are exceeded, subject to exemptions. |
| Corporate benefit | The Board should record why placing company property at risk benefits the company. | Commercial rationale, consideration, group benefit and risk assessment. |
| Existing lender and articles | Negative pledge, related-party covenant or constitutional restriction may prohibit the security. | Prior consent, waiver or member approval as applicable. |
Do not change only the borrower's name in the sample resolution. Third-party security should be drafted after the borrower relationship, director interests, limits, guarantees and property risk have been reviewed together.
Common mortgage resolution mistakes
Vague property wording
The resolution says "all property" without a title-backed schedule or security limit.
Wrong owner
The company resolution describes promoter or director property as if the company owns it.
Conflicting mortgage type
The Board approves title-deed deposit while the lender executes a registered mortgage, or vice versa.
Missing ranking
The resolution promises first charge despite an existing mortgage or negative lien.
Ignoring Section 180
Borrowing totals and the economic importance of the secured undertaking are not reviewed.
No registration authority
The signatory can sign but cannot present, admit execution or complete Sub-Registrar formalities.
Late CHG-1
The company waits for disbursement even though the charge arose earlier under executed documents.
Third-party format copied
Security for another borrower is approved without Sections 185/186 or corporate-benefit analysis.
Mortgage resolution FAQs
Is a Board resolution required to mortgage company property?
Yes. The Board should approve the secured borrowing, identify the property and mortgage, and authorise execution under the Companies Act, articles and applicable member limits.
What should the mortgage resolution contain?
State the lender, facility, secured amount, purpose, property schedule, mortgage type and priority, title-deed authority, signatories, registration powers and filing authority.
Can the Board authorise deposit of title deeds?
Yes, provided the transaction is legally available at the relevant place and follows applicable state stamp, notice and registration requirements.
How is a registered mortgage different from title-deed deposit?
A registered mortgage is created through a registered instrument. A title-deed mortgage is created by delivery of title documents at an eligible location with intent to create security, with state-specific documentation requirements.
Is shareholder approval required?
It may be required when Section 180 borrowing limits are crossed or the security affects the whole or substantially whole of an undertaking. Eligible private-company exemptions are conditional.
Is CHG-1 required for the mortgage?
A company mortgage is a charge over company property. Section 77 should be assessed and CHG-1 is generally filed within 30 days of creation.
Is MGT-14 required?
Assess the Section 179 Board resolution and every special resolution under Section 117. Eligible private companies may have an exemption for specified Board resolutions when its conditions are satisfied.
Who can execute the mortgage for the company?
Name an appropriate director or officer and expressly authorise signing, title-deed delivery, appearance, admission of execution, stamping, registration and collection.
Can a company mortgage a director's property?
No resolution can mortgage property the company does not own. The owner must separately consent and execute the security after title, lender and related-party review.
Can company property secure a subsidiary loan?
Potentially, but Sections 179(3)(f), 185 and 186, existing lender covenants, corporate benefit and applicable approvals must be reviewed. Use a separate resolution.
Does CERSAI replace CHG-1?
No. Central Registry and Registrar of Companies filings are separate. The secured creditor commonly handles CERSAI filing, while the company must complete its Companies Act obligations.
What should happen after repayment?
Obtain lender release, retrieve and verify original title deeds, complete mortgage release or reconveyance, report charge satisfaction and check that registry records are updated.
Rules checked for this guide
The guide was checked against official sources available on 8 August 2026. State property law, lender documents and company facts determine the final security method.
Government sources
Review the property and authority before creating security
Share the company type, lender sanction, title schedule, existing borrowing, prior charges and proposed mortgage method. companyji can review the corporate approval, resolution, certified copy and ROC filings.