You can buy the plot as mortgage has been cleared after making full payment to the bank
the revenue records do reflect name of builder as owner
Mortgage deed without possession
Hi, I am buying a plot in Chennai. The parent owner has a mortgage deed without possession with the scheduled land mortgaged to a Co-operative bank in 1992. This document is reflected in the encumbrance certificate. The builder/promoter shared the loan clearance certificate issued by the bank in 2006 (bank letter head) to the parent owner mentioning the mortgage deed number, property details and also mentioned that the loan is cleared and the property free of encumbrance. However, the same is not reflecting in encumbrance certificate that the loan is cleared. The promoter has bought this land in 2017 and patta is now in the name of the promoter. Shall I proceed with buying this plot? Thanks.
Asked 3 years ago in Property Law
Religion: Hindu
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7 Answers
If the clearance of mortgage is not reflected in ec means the registration of mortgage is cancelled. The property is still in mortgage with the bank technically, though bank cannot seek possession. Purchase of property is safe but you will face problem at the time of selling or transferring the property. Safe to get the mortgage deed cancelled.
Patta is not the title document hence just because the promoter has patta in his name cannot make him the title owner to the property.
If the promoter has bought the land then he should possess a registered title deed on his name.
The bank might have given loan clearance certificate, but it is the duty of the bank to execute a cancellation deed to cancel the registered mortgage deed without which the encumbrance on the property cannot be removed.
The reflection in the EC will remain forever until it is removed by executing a registered cancellation deed which the bank has to do it.
Therefore without getting all such lacuna rectified, it is not advisable to b y this property/.
You may also obtain a legal opinion from a local lawyer if you still insist on buying this property.
The discrepancy has to be cleared before purchasing.
G.Rajaganapathy
High Court of Madras
- Yes, you can proceed , if there is already mention for the clearance of loan , and further if the original title deed has been released by the bank to the said owner.
- Further, you should mention in the sale deed at the time of drafting that this property is free from all loans/burdens etc, and if the same arise in future , then the seller will indemnify the purchaser.
you may proceed if there are any documents regarding the loan clearance from the bank. when you purchased that plot then it should be mentioned in the sale deed that the property is free from all encumbrances.
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Dear Sir/Madam
The purchase of the property shouldn't be a problem, but you might face difficulties if you wish to sell or transfer the property. As the loan clearance has not been reflected in the encumbrance certificate, it technically means that the said property is still under mortgage with the bank. Patta will not determine the title over a property. Please clear the formalities before you purchase the property.
