Society cannot be forced to accept format given by bank
society can make some changes in format and if bank refuses to give loan approach another bank for said purpose
NOC format not satisfied by society
I am in the process of selling my flat in Pune. My buyer is seeking loan from SBI and the bank needs a specific format of the NOC . The society has provided NOC without the following clause - which is required by SBI. They are Is the society bound to provide NOC in the format asked by SBI (specially the following clause)? 6. After creation of proper charge/mortgage and after receipt of the copies there of and after receipt of proper nomination in favour of the Bank, from the said purchaser, we are agreeable to accept State Bank of India as a nominee of the above named purchaser for the property described above and once the nomination favoring the Bank has been registered in the Society’s register and advice sent to the Bank of having done so, We confirm not to change the same without the written NOC of the Bank." Their response was : Kindly ask your bankers to accept the NOC as it is. We have been providing NOC in a standard format irrespective of lenders. There are many bank loans processed earlier and we were forced to change our NOC format after being pressurised by the Bank Executive to your proposed buyer and subsequently by you to the committee. Afterall there are many lenders these days in the market. Please note that a society never takes responsibility for "Agreement to Sale" but on your request we had to mention all the "Agreement to Sale" details which otherwise we are not supposed to do. Now that the bank executive is asking for an indemnity which no society would like to provide. We can't take responsibility for interacting with the bank on a future date. Also we strongly disagree with the clause mentioned in your email in general and with this line "We confirm not to change the same without the written NOC of the Bank" in particular. Hence, the committee has approved this NOC and we request you to provide this to the lending bank of your proposed buyer.
Asked 3 years ago in Property Law
Religion: Hindu
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8 Answers
Understood on the point that a society does not have to follow the format of the bank. However, can a society refuse to add "State Bank of India as a nominee while the bank has provided loan to the buyer " and to the point "We confirm not to change the same without the written NOC of the Bank." mentioned in the clause below ? After creation of proper charge/mortgage and after receipt of the copies there of and after receipt of proper nomination in favour of the Bank, from the said purchaser, we are agreeable to accept State Bank of India as a nominee of the above named purchaser for the property described above and once the nomination favoring the Bank has been registered in the Society’s register and advice sent to the Bank of having done so, We confirm not to change the same without the written NOC of the Bank.
Asked 3 years ago
The response given by the society seems to be proper and and legally right.
The bank cannot dictate its terms to society and cannot insist the bank to furnish NOC as per their fancy.
The banking law also do not prescribe any such format.
This is the brain work of some over enthusiastic staff of the bank without realizing the hardship of borrowers.
As rightly observed there are plenty of lenders available in the market, hence the buyer can be advised to look for some other lender, if this bank is refusing to accept this NOC.
Society can refuse to add bank as nominee
however no charge or third party rights can be created without consent of bank
The society can very well refuse to accept the bank as nominee of the borrower/members.
Besides, nominee do not have any rights acquire title to the property on the demise of owner.
The demand made by the bank to make it a nominee is not tenable in law even though it is a fact that the nominee cannot acquire title to the property instead he can receive the property on behalf of the legal heirs and distribute the same to the legal heirs.
Therefore making the bank as nominee to this property makes no legal sense.
Dear Client,
To resolve your dispute legally:
(a) You may file a complaint before the registrar and follow thereafter to conduct hearing by filing RTI applications demanding action taken report
(b) Get signature of 20% or more members to call a Special General body meeting to decide on this matter. If within 1 month of such requisition, no actions are taken, the registrar may be asked to depute his person to call the SGM and decide on the matter.
Legally in Maharashtra now noc is not required for sale of flat as per new l& recent notification of jitnedra awhad.
1. The Bank is overacting in demanding the society to add the clauses in their NOC format.
2. The Society can also not bind itself in guaranteeing that it will not change the Nominee unless consented by the Nominee. It is the right of the share holder to change the Nominee.
3. On the contrary, the borrower can give undertaking to the Bank that he will not change the Nominee with out the consent of the lending bank.
1. The Society shall have to change the Nominee after receiving the application from the share holder of the Society to that effect. The Society can decide not to involve itself in any sorts of agreement with the Bank to this effect.
2. The Society has the right not to accept the said Clause deviating from its standard procedure. However, the lending Bank can bind the Borrower in an agreement mentioning the said clauses.