Since the original title documents are with the bank, a transfer without their consent violates the loan agreement. 

2) If a gift deed is registered without their knowledge, the bank can challenge it in a court of law.

3)until loan is repaid bank will refuse to give NOC 

4) If the loan defaults, the bank can invoke the SARFAESI Act to auction the property to recover dues, regardless of the gift deed

Pay off the entire outstanding home loan. Once the loan is cleared, the bank has no interest in the property. They will release the original documents and provide a "No Dues Certificate." You can then register the gift deed with absolute freedom.

Under the Transfer of Property Act, 1882 and standard loan agreements, once a property is mortgaged the borrower cannot transfer ownership without the lender’s consent.

So if your wife executes a registered gift deed transferring her share to you without NOC, the situation becomes that the gift deed may still be valid between you and your wife but it will be subject to the bank’s mortgage rights.

The bank can ignore the transfer because the property was already mortgages to them. In short the bank’s rights override the gift deed.

The Bank may refuse to furnish NOC even after repayment of entire loan demanding the co-borrower's signature to release the documents.

At the time of selling the property, the buyer's lawyer may object stating that the gift deed was executed without lender consent during the mortgage.

This can delay or complicate the sale.

Even if she gifts her share she remains liable as a co-borrower unless the bank approves a borrower change.

The bank can still recover the loan from both of you.

Therefore it is suggested that you may Close the home loan, obtain mortgage release, execute gift deed.

When a flat is mortgaged to a bank for a home loan, the property is already under a registered charge in favour of the lender, and the borrower normally cannot transfer ownership rights without the bank’s prior consent. The loan agreement and mortgage terms generally contain a clause prohibiting sale, transfer, or creation of third-party rights without the lender’s permission.

If your wife executes a gift deed transferring her share to you without obtaining the bank’s NOC, the gift deed may still technically get registered because the Sub-Registrar usually does not verify loan conditions. However, such a transfer would violate the terms of the loan agreement with the bank. Under the Transfer of Property Act, 1882, a mortgaged property remains subject to the rights of the mortgagee (the bank). This means the bank’s charge continues regardless of the gift deed.

The practical issues that can arise later include the bank treating the transfer as a breach of loan conditions, which may allow it to demand immediate repayment or take action under loan default provisions. When you attempt to close the loan or sell the property in the future, the bank will examine the title documents and may object to the transfer made without its consent. Similarly, during loan foreclosure or resale of the property, the bank may insist on rectification or may require both original borrowers to sign documents.

In the event of separation or divorce, the existence of a gift deed without lender consent may also be questioned. Although the transfer between spouses may be valid inter se, the property will still remain subject to the bank’s mortgage rights until the loan is cleared.

If the bank is not granting an NOC, the most common practical solutions are:

• Continue the loan in joint names but record the arrangement privately through a family settlement or declaration regarding beneficial ownership until the loan is repaid.
• Request the bank for loan restructuring or borrower substitution, where your wife is released from the loan and you become the sole borrower (banks sometimes allow this after credit assessment).
• Close or refinance the loan with another lender and then execute the gift deed after the mortgage is cleared.
• Execute the gift deed after full loan repayment, which avoids any objection from the bank.

In most cases, the safest approach is to obtain the bank’s written consent before executing any transfer, because the lender’s charge on the property takes priority over later transfers made without permission.

Thank you for your response. Before providing a proper reply, I kindly request that you share the complete details of the matter for clarity. To ensure a thorough discussion and provide appropriate guidance, a phone consultation or office visit-Fort would be necessary.

If bank is not giving noc you can approach court. As bank can’t refuse unless the mortgage loan emis are unpaid. Other than that there is no reason bank can refuse.

- As per laws, any transfer of ownership of a mortgaged property requires prior permission or NOC from the bank.

- Further, transferring the share without informing the bank is a violation of the loan agreement.

- Further, in case of non-informing the bank , there will be joint ownership of the property in the bank. 

- Hence, you should take permission of the bank before registering the gift deed, and the bank may allow the same. 

Dear Sir,

Gifting the share without an NOC is a technical default of the loan agreement. The bank may invoke an "acceleration clause," demanding immediate repayment of the entire outstanding loan balance.

As the property is in joint names, both of you would have created the mortgage jointly in the bank's favour for securing the housing loan. The bank's position as the secured creditor will not be worse off if your wife gifts her share to you, NOC or no NOC, practically speaking. In any case, wait for the NOC for good order's sake. Instead of a gift, your wife may release her share by means of a relinquishment deed duly drafted, executed and registered. After she gifts or relinquishes her share, your wife shall have no further claim over the property. The bank's NOC is immaterial in any case.

Dear client,

If someone has taken out a bank home loan against their flat, they still have credit and ownership of what they own until they complete ALL payments owed to the bank or lenders They are bound to that credit/card until that time is completed, at which time they will no longer owe anything to those companies.

Transferring your ownership through a Gift Deed without an NOC (No Objection Certificate) from the bank can lead to legal problems for you, as the Title Holder and Transferor, as follows:

1. Many home loans or mortgages will have terms that specifically prevent the Title Holder from transferring, selling, or gifting to another person without the bank's agreement or NOC. Therefore, if you register your Gift Deed without an NOC from the bank, it could be construed as violating your terms of your loan with the bank. In extreme cases, the bank may require full repayment of your loan with them or take Legal Action against you and your property.

1. The bank's rights under the mortgage will remain. Therefore, should you register the Gift Deed without an NOC, the bank may take actions against the Title Holder or property due to an unpaid mortgage, regardless of having the registered Gift Deed.

1. In the event of Divorce, Mortgage Payoff or Sale of Property, banks will not recognize the transfer and the Title Holder will not be able to enforce their rights due to lack of legal approval; thus, this may lead to disputes of ownership.

Should the bank refuse your request for NOC, you might want to consider: 1) Transferring your loan into one Title Holder (unless the bank requires multiple Title Holders to continue 2) Refinancing the loan with a different lender 3) Repaying your loan in full and receiving your property free of mortgage.

If you have any query please feel free to contact us

Dear Sir,

Your query concerns the transfer of a co-owner’s share in a mortgaged property while a home loan is still active, which requires careful legal consideration.

Firstly, when a property is purchased with a home loan, it is usually mortgaged to the lending bank, and the original title documents remain with the bank as security. In such cases, most loan agreements specifically state that the borrower cannot transfer, sell, gift, or otherwise create third-party rights in the property without the bank’s prior consent.

1. Executing a Gift Deed without Bank NOC

Technically, a gift deed between spouses can be executed and registered under the Transfer of Property Act, 1882. However, if the property is already mortgaged, doing so without the bank’s No Objection Certificate (NOC) may lead to the following legal and practical issues:

• Violation of Loan Agreement: Most housing loan agreements prohibit transfer of ownership during the loan tenure without lender approval. Executing a gift deed without NOC could be treated as a breach of contract.

• Bank’s Security Rights: The mortgage created in favour of the bank will continue to remain valid and superior to the gift deed, meaning the bank’s rights over the property will not be affected.

• Difficulty during Loan Closure: When the loan is closed and the bank issues a No Due Certificate and releases the mortgage, the bank may insist on clarifying ownership changes made during the loan tenure.

• Problems during Sale: A future buyer or bank financing the buyer will conduct due diligence. If the transfer was done without lender consent, it may raise compliance issues or require additional documentation.

• Issues in Divorce/Separation: If marital disputes arise later, the gift deed may still be valid, but your wife could potentially challenge it on grounds such as coercion, lack of free consent, or financial imbalance, especially if the transaction happened during a sensitive marital phase.

It is important to note that while the registration authority may register the gift deed, registration does not override the contractual restrictions in the loan agreement.

2. What if the Bank is Not Giving NOC

If the bank refuses to grant NOC, the following options may be considered:

(a) Loan Transfer to Single Borrower (Preferred Option)
Request the bank to remove your wife as co-borrower and co-owner and allow the loan to continue solely in your name. This usually requires:

• Fresh eligibility assessment

• Execution of supplementary loan documents

• Bank’s internal approval

Once approved, your wife can execute the gift deed or release deed with the bank’s consent.

(b) Loan Refinancing / Balance Transfer
You may transfer the loan to another bank in your individual name, subject to eligibility. After the new bank sanctions the loan in your name alone, your wife can legally transfer her share.

(c) Closure of Loan First
If financially feasible, you may prepay and close the loan, obtain the original documents and mortgage release, and then execute the gift deed without any restrictions.

(d) Execute a Conditional Family Arrangement
In some cases, spouses execute a memorandum or family arrangement recording the intention to transfer the share after the loan is cleared. The actual transfer is then completed later.

3. Practical Advice

From a legal and banking perspective, the safest approach is always to obtain the lender’s NOC before executing any transfer. This avoids complications during resale, refinancing, or loan closure.

Before proceeding, it would be advisable to review your loan agreement and mortgage terms to understand the exact restrictions imposed by the bank.

If you need assistance in reviewing the loan agreement or structuring the safest legal route for transferring the share, you may consider taking professional legal advice.

Thanks and Regards,
Advocate Aman Verma
Legal Corridor

When a flat is under an active home loan, the property is normally mortgaged to the bank as security. Because of this mortgage, the owners do not have completely free rights to transfer their share without the lender’s consent. Your situation should therefore be analysed carefully.

1. Whether a gift deed can be executed when the property is mortgaged

Legally, ownership of the flat remains with you and your wife, but the bank has a security interest over the property.

Most loan agreements contain clauses stating that:

• the borrower shall not transfer, gift, sell, or create any third-party interest in the property without prior written consent of the bank, and

• any such transfer may be treated as breach of loan terms.

Therefore, if your wife executes and registers a gift deed transferring her share to you without obtaining the bank’s NOC, the following issues may arise:

• The bank may treat it as violation of the loan agreement.

• The transfer may remain subject to the existing mortgage, meaning the bank’s charge continues irrespective of the gift deed.

• In extreme cases, the bank may issue a notice for loan recall or corrective documentation.

However, the gift deed itself does not extinguish the bank’s mortgage. The bank’s charge continues and takes priority over the transfer.

2. Consequences during loan closure or property sale

If you later wish to:

• close the loan,

• refinance the loan, or

• sell the property,

the bank will examine the title chain.

If they find that the co-owner transferred her share without their consent, they may require:

• ratification or confirmation documents,

• fresh loan documentation,

• or even insist that the earlier co-borrower continue to remain liable until the loan is repaid.

Banks sometimes refuse to recognise such transfers unless they had formally approved the ownership change.

3. Impact in case of separation or divorce

If a properly registered gift deed exists:

• your wife generally cannot claim ownership again, because a gift once executed and accepted is ordinarily irrevocable under property law.

However, disputes sometimes arise where the donor later alleges:

• coercion,

• lack of free consent, or

• that the transfer violated loan terms.

Additionally, even after the gift, if she remains a co-borrower in the loan, the bank may still hold her jointly liable for repayment. Ownership transfer does not automatically remove borrower liability.

4. If the bank refuses to give NOC — practical options

If the lender is not willing to issue a No Objection Certificate, the commonly used solutions are:

(a) Loan restructuring with ownership change

Request the bank to:

• remove your wife as co-owner and co-borrower, and

• keep the loan solely in your name.

The bank may allow this if:

• your income alone satisfies eligibility criteria, and

• fresh loan documentation is executed.

(b) Loan refinancing

You may:

• transfer the loan to another bank in your sole name, and

• once the earlier loan is closed and mortgage released, execute the gift deed safely.

(c) Gift deed with bank consent

Some banks allow:

• execution of the gift deed after signing a consent letter, while

• continuing both parties as co-borrowers until the loan is repaid.

(d) Execute gift deed after loan closure

The legally cleanest method is to wait until the loan is fully repaid and the mortgage is released, and then execute the gift deed.

5. Key practical point

Even if a gift deed is registered without the bank’s NOC:

• the mortgage will continue,

• the bank’s rights will override the transfer, and

• problems may arise during future transactions.

Therefore, the safest approach is to first regularise the loan arrangement with the bank before transferring ownership.

In summary: a gift deed between spouses on a mortgaged flat is legally possible, but executing it without the bank’s consent can create complications with the lender and future title verification. It is advisable to either obtain the bank’s written approval or restructure the loan so that the transfer is properly recognised.

1. Normally, title of a mortgaged property can not be conveyed without the consent of the mortgagee.

2. However, in the instant case, the Bank should not refuse to give consent for the said conveyance of your share of the mortgaged property to your husband if he is also the mortgagor.

Any transfer is subject to mortgage only and both are jointly liable for repayment of loan irrespective of your marital status.