From the Desk of the Chairman (March 2025)

Here is a case involving an important legal issue as regards mortgages in India.? We have different kinds of mortgages prevalent in India – simple mortgages, equitable mortgages, registered mortgages, et al, with ever so subtle differences amongst them. For a layperson the differences between these types of legal documents can be quite challenging. Here is one case that got decided by the apex court this month that should remove some of our misunderstandings on this all-important class of legal documents.? Read on to know more. There was this case involving a dispute between Cosmos Co-Operative Bank and Central Bank of India over the priority of mortgage rights on a property offered as security by the borrowers who defaulted on re-payment of their loans. ?The borrowers availed a loan facility from Central Bank of India in the year 1989 based on an unregistered Agreement of Sale for a flat that the borrowers had proposed to purchase from the developer.? Subsequently, in 1998 the same borrowers availed another loan from Cosmos Co-Operative Bank by depositing an unregistered Agreement of Sale along with a Share Certificate pertaining to the flat. When the borrowers defaulted on re-payment of their loan, Central Bank of India approached the Debt Recovery Tribunal (DRT). The DRT held that the Central Bank of India had failed to establish a valid mortgage due to its failure to present the title deeds based on which the loan was sanctioned to the borrowers or to present any registered title deed pertaining to the flat.? The Central Bank of India then approached the Debt Recovery Appellate Tribunal (DRAT). The DRAT held that the mortgage created by the Central Bank of India was valid and set aside the order passed by the DRT.? Aggrieved by the DRAT’s decision, Cosmos Co-Operative Bank approached?the?Bombay High Court, which upheld the DRAT’s decision, leading to the present appeal before the Supreme Court by the Cosmos Co-Operative Bank.? The Supreme Court in its judgment clarified that a legal mortgage created by deposit of valid title deeds – specifically, in this case, a Share Certificate – always has priority over an equitable mortgage created based on an incomplete title document, such as an unregistered Agreement of Sale.? In the process, the Supreme Court set aside the High Court order, ruling in favour of Cosmos Co-Operative Bank by affirming their superior claim over the flat. Importantly, the SC held that an equitable mortgage created by an unregistered Agreement of Sale cannot override a legal mortgage supported by valid title deeds.? The Court, however, recognised equitable mortgages under the nomenclature of a “charge” as per Section 100 of the Transfer of Property Act, 1882 and clarified the enforceability of the same, as per the procedure and provisions applicable to a simple mortgage except for those without notice of such charge. The Supreme Court was of the view that the High Court got carried away by the fact that the first charge was that of the Central Bank and not of the Appellant bank and failed to notice the distinction that exists between an ‘equitable mortgage’ and a ‘legal mortgage’. The Supreme Court further held: “The proposition of law is that though the transaction evidenced by the prior unregistered document is valid in itself, yet any title or interest created by it is liable to be defeated under the rule of priority by a valid later and legal sale or mortgage evidenced by a duly registered document”. Look at the trajectory of the case – Debt Recovery Tribunal to Debt Recovery Appellate Tribunal to the High Court and finally to the Supreme Court – There is no scope for further appeal for the aggrieved as the Supreme Court is supreme!

Donald Trump, the mercurial US President is a controversial character in our mind, perhaps for good reasons. Sometimes I wonder whether our judgment of the American President is indeed justified. Before we do that, we need to arrive at a conclusion as to why we tend to judge him not so favourably.? He is rich and he is a spoiled brat.? But then, there are many in the society like him.? We do not apply the same self-imposed judgemental standards to them similarly.? Let me now come to the point. Why do we react the way do when it comes to his actions for his country? Let us look at a few of the things that he has recently done for the benefit of his own country.? When others do similar acts, we rush to congratulate them for being patriotic to a fault.? If I were a citizen of the US, would I entertain the kind of disquiet that I harbour for him now?? You may have your own reasons to dislike him for his behaviour.?? Most of them are based on our own personal dispositions. Agreed that he does not fit into the definitions of ideal behaviour expected of a politician.? We have politicians in our country who are worse. Look at what he is doing for his country. Declaring trade wars in the name of tariffs. By getting the drug lords from Mexico he is saving his own country in the long run.? The slogan “Minimum Government and Maximum Governance’ has remained a cliched slogan for us. For the US, with the help of Elon Musk he might just get it done. Bloated bureaucracy is a bane for all countries.? It is possible that Musk’s way of removing the flab may look a bit extreme, but there is no other way to shake up an entrenched bureaucracy anywhere in the world.? It is possible that the duo Trump and Musk may have crossed the line somewhere.? That is no reason to throw out the initiatives they have already undertaken. ??The hard stance on immigration aiming to secure the U.S. borders and reduce illegal immigration may look unfair to us, outsiders.? But they are taking such steps for their own interest. Who are we to sit on judgment on these matters unless international treaties or conventions are broken?? No doubt the scenes of undocumented immigrants in chains deported to India looks inhuman and heart wrenching.? But let us not forget that the US government has not broken any law whereas those deported had broken the US laws knowingly and wantonly.? We want the US to be a global policeman. If so, let us be prepared to pay a price for such services. After all nothing comes free.? There are two types of leaders.? One is transformational and the other, transactional.? Donald Trump is the President of another country.? If the voters of that country have decided to elect an essentially a transactional leader for themselves, so be it. All that we can do is to learn to work with him.? In Trump’s world there is no free lunch for any outsider (read non-American).

Family offices in India have seen remarkable growth in recent years. These private wealth management firms, which cater to ultra-high-net-worth individuals or families, have increased from just 45 in 2018 to nearly 300 in 2024. They now manage an estimated $30 billion in assets under management (AUM), though this is still a small fraction of the global AUM of family offices, which stands at around $6 trillion.? The rise of family offices in India is driven by a shift toward professionalised investment management, succession planning, and diversification of wealth into various asset classes like real estate, equities, and private equity. Notable family offices in India include Catamaran Ventures, Premji Invest, and Nadathur Holdings, which have invested in a range of sectors.? This trend reflects the growing wealth of India's ultra-rich population and their focus on preserving and growing wealth for future generations. Family offices are also playing a transformative role in domestic private markets with many doubling their investments in private sectors over the past years.? Watch the developments in this space.

If Ukraine were to surrender to Russia, something that would become a reality as early tomorrow, it could have several implications for future generations of Ukrainians.

1.????? Geopolitical Landscape: A surrender could shift the balance of power in Eastern Europe, potentially allowing Russia to reassert its influence over former Soviet states especially, leading to increased tensions and conflict in the region.

2.????? National Sovereignty: Such an event might challenge concepts of national sovereignty and self-determination, sending a message that large nations can overpower smaller ones potentially emboldening other aggressive state actors.

3.????? International Norms and Responses: It could undermine the international norms that discourage invasion and annexation, prompting a re-evaluation of alliances and defence strategies among other nations.

4.????? Impact on Democracy and Governance: A surrender could affect democratic governance in Ukraine and possibly encourage authoritarianism in the region, detracting from democratic movements.

5.????? Humanitarian Consequences: The aftermath could lead to significant humanitarian issues, including refugee crises, human rights abuses, and long-term instability impacting millions of lives.

6.????? Historical Memory and National Identity: Future generations in Ukraine may grow up with a narrative of resistance and loss, influencing national identity and historical memory, potentially leading to an abiding desire for reclaiming lost territories in the long term.

7.????? US Standing in Global Affairs:? Russia is able to conquer Ukraine despite the military support provided by the US earlier. Even the agreement signed by Ukraine is under duress from US.? Ukraine would never forget or forgive the US for abandoning it.

8.????? Acceptance of the philosophy of Might is Right: US will have a difficult time to live down the reputation of being branded as a tribal leader of countries. ?

While these points highlight likely future ramifications, the actual consequences would depend on various factors including international responses, internal dynamics in Ukraine and Russia, and the broader geopolitical context.? Ukraine and Ukrainians would live with the bitter memory of what they had been subjected to, for no fault of theirs.

Recently in the Lok Sabha, Narendra Modi made a book recommendation while moving the vote of thanks to the President, not to me, but to the Opposition leaders. He asked them to read this all-important book on foreign affairs “JFK’s Forgotten Crisis: Tibet, the CIA and the Sino – Indian War” written by renowned foreign policy analyst, Bruce Reidel. I do not know if Rahul Gandhi followed the PM’s recommendation. I did. In my growing up years, much before I was trained to survive corporate politics, there were very few world leaders who commanded our attention and admiration – one was John F Kennedy, and the other was Jawaharlal Nehru. If one was inspirational, the other was aspirational. Suddenly the book became a must-read for me. Here is my review of the book.? A good author with exceptional leaders as subject matter, even without a recommendation from the PM I would have reached out for the book if I knew such a book existed. I am glad that I read the book; but not so much for how it was written. It helps one to understand the broad contours of foreign policy as it was applicable in those tumultuous days of Cuban missile crisis and the Indo-China war. There is nothing great to write home about the writing style of the author. The book falls between a wartime journal without the intricate details of an ongoing battle and not really a salacious one as you would find in fiction. No doubt the events brought back memories of those days Bay of Pigs, John Kenneth Galbraith, Ayub Khan, Jacqueline Kennedy, Mao Tse Tung, etc. etc., just to name a few. Now let us look at some of the contentious facets between India and China as written in the book: “As tensions with China mounted after the Dalai Lama fled into exile in India in 1959, Nehru and his advisers gradually implemented what became known as the “Forward Policy” of sending Indian military forces forward into contested and disputed territory with China. India had been building up its intelligence presence along the border for more than a decade, but in the early 1960s it began to create military outposts behind the Chinese troops in the disputed land, so as to cut off their supplies and force their return to China. This action led some scholars, most notably the Australian journalist and author Neville Maxwell, to argue, “It was Nehru, not the Chinese, who declared war.”? "The Forward Policy was never formally reviewed and approved as such by the Indian government; rather it grew from a series of incremental decisions and events. It was also more of a statement of political resolve than a military strategy: The Indian army was never given the means to effectively implement it. Because India's major dispute with China was over territory in the Aksai Chin portion of Kashmir that India claimed and China controlled, it was there that the Forward Policy was most vigorously prosecuted and confrontations with the Chinese were the most volatile. The extremely harsh terrain in Aksai Chin made it a formidable challenge for Indian troops, and the logistics of supplying forward posts was extremely difficult. Later India implemented the Forward Policy in the northeastern region where India occupied the disputed territory claimed by China. Violent incidents became more and more common on both fronts”. For Nehru and Krishna Menon, the defence minister the Forward Policy was not a “military challenge to a far stronger power, but the necessary physical extension of a subtle diplomatic game”.? There are some anecdotal quotes that I found interesting. In one place Jacqueline Kennedy talks of Mrs Indira Gandhi. According to her the latter was “a truly bitter woman, a real prune – bitter, kind of pushy, horrible woman. It always looks like she’s been sucking on a lemon”. John Kenneth Galbraith, the then Ambassador of the US comes across as the real hero behind the throne (remember that tall and lanky gentleman? According to the book he was a key policy counsellor for not only the US President but also the Indian Prime Minister. Galbraith is there all over the place in the book and comes across as a top-class diplomat, a species that is almost extinct today. ??Another important quote from the book: “the Soviet Union had failed India and so had the nonaligned world”. The latter part of the book describes the plight of the country’s then popular Prime Minister Jawaharlal Nehru and the humiliation that he had to suffer.? Here is another interesting (and also revealing) quote from the book: “Zulfikar Bhutto visited Washington in October 1963. The Pakistani foreign minister had deservedly earned a reputation in the United States as being pro-China and anti-America. In a bid to flatter the young Bhutto, Kennedy remarked that if Zulfi (Bhutto's nickname) were an American, he would be serving in JFK's cabinet. Zulfi responded that if he was really an American, he would be President and JFK would be in his cabinet. This response was the final irritant in Kennedy's relations with the Pakistani leadership”- Moral of the story: You don’t mess with people at the high table!? Finally, let me sign off with this quote from the book – the very last paragraph. “JFK proved to be the ultimate crisis manager in 1962. His deft handling of two global crises simultaneously involving the two great communist adversaries of the United States was a tour de force of policymaking at the highest level. America, India and the world were lucky to have JFK and Ken in 1962”. I am glad I read the book. Thank you, Mr. Prime Minister, for your book recommendation. It took me to another time and another world.

Thank you.

Venkat R Venkitachalam