There is no need to get the mortgage released by the coop bank now that its debt itself is time-barred. However, it has to be ensured that no suit is pending against the mortgaged property and there is no attachment as on date.
Mortgaged property cooperative bank and EC time lines
My father( passed away in 2010) had purchased some agricultural lands down South in Tamilnadu near Sattur in 1995. We found a buyer and gave an EC which was taken in 2007 from 1987 i.e 21 years. The buyer went ahead and took an EC from 1975 to 1986 where some of the Survey Numbers were shown to have been mortgaged from 1975 to 1979. We found out that these loans were from a cooperative bank and have been waived off by the government. My question is since the land was sold to us without any discharge of the mortgage (we were not aware of it since the EC taken that time was after the mortgages were taken), is it necessary to go back so many years and go through the hassle of getting the mortgage released. Are there any risks to the buyer if we sell it based on the EC from 1987. Isnt there a min number of years for EC that is acceptable for sale of Agricultural lands. The person who sold the lands is willing to sign any document if it can help sell the lands.
Asked 5 years ago in Property Law
Religion: Hindu
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13 Answers
Hello,
though a good time has elapsed still it will be better if you may get the mortgage released. The same will though not make any difference now.
regards
It is always advisable to take detailed title search of the property
2) if you sell the land to purchaser you must execute indemnity bond to indemnify him If any claims are made for said land in question
If he is ready to sign take a registered indemnity bond from him stating that any charge, lien or mortgage will be his liablity and he will make good any loss in future.
If buyer is ready to purchase from you after executing indemnity then you can proceed.
A mortgage is always a mortgage and a liability to repay on the part of the borrower. It shall be lawful to discharge the mortgage money and enter into sale.
Regards
G.Rajaganapathy
Lawyer
High Court of Madras
1. ideally the mortgagee should be made a confirming party in the sale agreement to be signed between you and the buyer
2. however if the mortgagee is not available then if you can get hold of the mortgagor then he can sign as confirming party stating that the loan availed by him from the co-operative banks stand duly discharged
3. also the notifications or circular or order under which the said loans came to be waived can be attached to your sale agreement
4. this would give adequate protection to the buyer
5. a public notice can also be issued informing about the waiver of loan transactions touching your property and also informing them about the intended sale and inviting objections against such sale
Generally when sale agreement is taking place related to a plot, it is better to have at least 30 years of EC .In your case,as you are having more than 30 years of EC,it is sufficient.But as you mentioned that the particular land is under mortgage for certain period,it is better to take release certificate from the bank,if it's possible.As it's a very old transaction ,it's bit difficult to find it.But make a try.
The mortgage loans availed on the landed property have to be discharged or there should be an endorsement that the loan have been waived hence there is no due against this property and the same should be reflected in the the register held by the regeneration department so that it can appear in the EC accordingly.
You may ask your vendor to get a No due certificate from the bank and also to execute the entry before the registrar so that the problem is solved instead of stretching the issue by asking irrelevant questions on this, because rule says that the property should be free from encumbrance whereas this appears to be an encumbrance hence the buyer may hesitate to buy to avoid risking his property being attached by the bank at a later stage
Thank you all for your valuable advice. In the last couple of months we have been trying to reach out to the concerned authorities to give us an NOC since the loan has been waived. He is refusing to give unless we get an NOC from all the legal heirs (There is another complication that has arisen they say, the owner of this plot supposedly had 2 wives and this was sold by one of the wife's and her son) This has led to the following issues 1) reaching out to all these people is a cumbersome task 2) There is a risk of them creating problems once they come to know of it. Would it be advisable to get some notice about the loan being waived and use that as security for the buyer to buy the land?. We are asking the buyer to buy the lands that are free of any issues 1st and then we will deal with these Survey numbers later and settle them. One survey number has been sold wrongly to another company and we have to file a case for that too. The problem is the value of these lands are not very high so spending too much money on this will make the worthless excercise. So please advice the best way to deal with this situation.
Asked 5 years ago
You can file a suit and take direction from the court for the aforesaid issues
You can execute indemnity bond to indemnify purchaser in case any claims are made by third parties
it would protect purchaser interests in case claims are made
Was the other wife a legally married one? If not, there is no need to obtain her NOC. She will not legally inherit any asset. However, her son will be entitled. Explain the factual position to the bank and request them not to insist on NOC from them. NOC from the bank is not absolutely required if you have proof of the loan being waived and in view of the fact that any claim on the mortgage is legally time-barred.
Your suggestions may be rejected by the lawyer of the buyer.
What if he imposes plenty of such legal conditions?
In case of any difficulty to get NOC then you may issue a legal notice to all the heirs in this regard and drag them to court if they refuse to oblige.
If they dont turn up to court then you may get an exparte order so that your job will become easy.