• Builder sold Mortgaged flat to me without NOC from bank without telling me about . What should I do?

I have purchased a Flat at Hyderabad in Kukatpally in January 2018. I did not go for a flat loan. The builder has sold me the flat without intimating that the same flat was under mortgage.I was cheated. I came to know about the mortgage after I received the EC after registration online. The EC was checked even day before registration. The mortgage was registered in another SRO. Hence the concerned SRO is not reflecting the mortgage held. Even today the concerned SRO official copy doesnot show the mortgage held for loan. BUt when online title search was made, I could get all the mortgage details.

now flat is sold and registered under my name. But as the flat was sold when the bank was title owner please answer following questions:

1. what is to be done?
2. All buyers have protested to builder and now Builder has accepted to give NOC from Bank. He will also get the mortgage release done. But after the mortgage release, by law will the flat go under the name of Builder? What procedure needs to be done?
3. Now local people have advised to go for rectification sale deed by taking NOC and release document from SRO. What is the correct process to get the flat on my name?(Though registry is already over)
Please help.
Asked 4 years ago in Property Law
Religion: Hindu

3 answers received in 1 hour.

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13 Answers

1. Ask the builder to obtain the bank NOC for your flat

2. then have your sale agreement rectified by including the bank NOC, as correctly advised

3. once bank issues NOC and as the builder has already sold the flat to you, the builder wont be entitled to claim in the flat

Yusuf Rampurawala
Advocate, Mumbai
6880 Answers
79 Consultations

5.0 on 5.0

Verify under what type of mortgage the property was mortgaged in favour of bank.

Ask the builder to get the mortgage release done from bank. And also to obtain NOC with respect to your flat.

Once release is done by bank go for rectification of sale deed and include in sale deed the clause of bank NOC. Thereafter get the EC which reflects in your name.

Swarnarka Chowdhury
Advocate, Mysore
1878 Answers
5 Consultations

5.0 on 5.0

Builder has to clear bank loan for mortgaged flats and bank would furnish its NOC

2) builder ought to execute deed of rectification

Ajay Sethi
Advocate, Mumbai
87911 Answers
6207 Consultations

5.0 on 5.0

File Criminal complain against builder for cheating u/s 420 and 406 of IPC.

No need of anything,

Just release of mortgage. Sale is valid.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0


1) In order to ensure that the sale deed continues to be legally valid and binding on the parties

a) the builder has to obtain a No Objection certificate cum Registered Release deed by the bank to which the property is mortgaged and

b) The builder and yourself should execute a registered ratification deed, incorporating the details of NOC and Registered Release deed.

2) The builder had the right of redemption at the time of mortgaging the property had a right vested with him called Right of Redemption by virtue of Section 60 of the Transfer of Property Act, 1882. Right of Redemption is a right which makes mortgagor(builder) the owner of the property mortgaged, and makes him able get his property back from the mortgagee (bank) on paying the amount borrowed from him. However since the Builder has sold the flat to you, the builder has lost the right of redemption and instead you will have the right of redemption. So , even if the builder get a NOC and a release deed from the bank, he will not have the right of redemption anymore and instead you will now have the rights of ownership , title and possession of the said flat.

3) The correct procedure is to obtain a NOC from the bank and also the bank has to execute a registered release deed to state that the property is free from its mortgage/lien.

4) Actually the builder is also liable for criminal prosecution u/s 420(cheating) and 406 Criminal Breach of Trust R/W 120 of Indian Penal Code as he has with criminal intention suppressed the facts of mortgage to the bank and proceeded with registration of property. So it is in his interest to ensure that he obtains NOC and executes the registered release deed with the bank and also a rectification deed jointly with your goodself.

Hope this information is useful.

Rajgopalan Sripathi
Advocate, Hyderabad
2169 Answers
394 Consultations

5.0 on 5.0

1) If flat is on your name. Than how come builder mortgage the flat, he must have mortgage the land. Now you can take POA from builder and insert that bank name as well in it. That flat has been sold to you and you had paid full amount to builder. Ask builder to take fully responsibility of the payment which he had take loan.

2) If flat is registered on your name with registrar those paper should be with you. If not done than ask builder to make sale deed on your name.

3) Rectification deed will be better with correct name and get registered withbit registrar.

Ganesh Kadam
Advocate, Pune
12335 Answers
191 Consultations

4.9 on 5.0

1. First ask builder to clear he loan and get property released from the concerned bank with the NoC of bank stating that no mortgage on the property, further as builder has cheated bonefide buyer a complaint of cheating and breach of trust can be filed with the police.

2. Builder after the release need.to do a confirmation/retification deed stating that the sale is complete property is under no mortgage.

3. As the stamp.duty is paid registery is done a correction deed also known as confirmation/ retification deed has to be signed and registered with the builder to ensure the title is clear. You do not have to pay stamp duty and registration again .

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

Firstly, there is a presumption of law with regard to the property transactions as to inquire about the property at the hand of the buyer.

Secondly, initially people used to do the same after visiting the registrar’s office, and checking the right over the property in subject.

Thirdly, but now evething is online, so you also did the same over EC. At the end it was not your fault as you did the inquiry but because of the technical fault it was not shown to you before the registration.

Fourthly, yes you can go for the rectification of the same with the consent letter of SRO. If they deny then give them the reasons in writing for mistake at your part.

They would get it done otherwise you can also go to the High Court for Writ of Mandamus to do the same.

Sanjay Baniwal
Advocate, South Delhi
5464 Answers
13 Consultations

5.0 on 5.0

You can execute a rectification sale deed and Register the same after the NOC and release deed.

Prashant Nayak
Advocate, Mumbai
27245 Answers
88 Consultations

4.4 on 5.0

1. The builder can get a NOC from the bank in respect of this proeprty by paying the loan amount agaisnt this flat and get the encumbrance cleared.

2. Once the mortgage loan is fully discharged, then the bank will issue no due certificate while endorsing the discharge of loan and would furnish the discharge certificate which can be registered making the mortgage entry as null and void.

3. The flat is already registered on your name, whereas the registration formalities including the encumbrance are to be cleared, for which you can ask the builder to do ti

T Kalaiselvan
Advocate, Vellore
78070 Answers
1543 Consultations

5.0 on 5.0

This is my response to you:

1. Take a written apology from the builder (which can be used against him if you go to court);

2. The builder can promise to give the NOC but still does not clear your title;

3. Also, the builder must execute a rectification deed in supplement to the original sale deed to showcase how this has happened;

4. f the builder still fails to procure the perfect title to each owner, all the owners should file a complaint before RERA, consumer court and also the police station;

5. Make sure the builder is ready to admit his mistake/s and rectify the same.

Gowaal Padavi
Advocate, Mumbai
1920 Answers
5 Consultations

5.0 on 5.0

1. First you shall have to clarify whether your flat has been individually mortgaged with the lending bank or the entire construction consisting of all the flats has been mortgaged by the builder while availing loan from the said bank.

2. If the mortgage is for the entire construction then the loan/mortgage agreement might mention that the buyer will sell the flats to his buyers and the sale proceeds will be deposited with the lending bank. This is usually done by the lending banks.

3. In the above case, the bank's NOC for selling the flats of the said mortgaged building with retrospective effect will suffice.

4. Once the loan with the bank is repaid and/or mortgage is released and/or NOC for selling with retrospective effect is issued, you won't have to register any rectification deed in future.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0


Builder will take NOC from the bank and further a rectification deed will have to be presented as the same deed at this juncture is null and void.


Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

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