1. IF the 4th floor is really illegal, THEN you would need to get a stay order on the notice, till you complete your investigations.

2. Banks give loan against mortgage of property and based on Title-Ownership and has usually got nothing to do with unauthorized constructions, which the Bank hardly checks since they are more interested in business.

3. Procure the sanctioned building plans from the Municipal Corporation /Town planning dept., /Builder /earlier owner and check the building status.

4. IF the 4th floor is really illegal, THEN you would need to get it regularized (alongwith other flat owners) by hiring the services of an registered architect.

The approval of SBI does not make the construction legal.

So when the construction is illegal check whether in payment of penalty it can be made legal or not.

If not then the Municipality may raze the building.

However you can file case against the builder in the consumer forum and seek refund of your money along with damages and compensation.

Apply for regularisation of unauthorised construction of flat 

2) pay the regularisation fees 

3) SBI must not have scrutinised sanctioned plans 

This kind of practices are being made by the builders after getting they approvals of lower floss they increase the height of the building and in case it is not approved by the development authority the Management Corporation will take action and they will go to the court to demolish the extended floors.

You need to file writ petition in High Court against the notice of municipal corporation making the Builder and Development Authority party to respondent

If you have received a notice from the authorities then you first ascertain the fact instead of asking questions that how bank granted loan,  etc.

You verify the original master plan and the approval by authorities concerned about the genuineness of the notice and then give a reply notice through your lawyer on the basis of the prevailing circumstances. 

Later on you can go for amnesty schemes if any by paying penalty to regularize the construction. 

You are at great risk. Municipality can if so want can demolish the illegal part of the construction.

First talk if there is any way to legalize the construction by paying penalties .

If not, file both civil and criminal case against the seller. Criminal case because it is a fradulent sale.

No there is fault of you in this transaction. All members of building should come together and apply for CC and OC certificate from Municipal Corporation by paying penalty fees and regularaize the 4th floor of the building.

See there may be default on side of bank during verification of documents , they failed to check plan approvals.

See you need to get construction regularised from municipality if same is not permitted the notice has to be challenged before the High court.

You need to regularise it with the municipality. And also ask sbi about the loan sanctions. If you get any notice of demolition you need to get stay on the same

These banks are only looking for interest money from your end. At the end of the day all they shall see is if you are financially good to pay back the loan amount that is taken by you. However, certain banks do a through a scrutiny of the documents. 

you can apply for regularisation of unauthorised construction. 

If the permitted 3 floors are constructed as per plan no regularization charges will be collected for the 3 floors. If there are deviations in the permitted floors, the regularization charges will be collected as per that rate. But the entire 4th floor will be treated as unauthorized construction and regularization charges will be collected as per that category.

You should file Application under RTI act and demand copy policy for building approvals. 

Also ask the copy of approved plan for your building and fees paid for it.

If approved plan is for G+2 floor then ask them for approval by paying penalties if any.

Dear sir,

All such constructions which are called irregular constructions will be regularized on payment of some penalty. Since because it is newly formed municipality so it is making an issue on that ground. It is the wrong step taken by the SBI in sanctioning loan and insurance. Anyway there will be no danger for your possession except the question of payment of penalty.