Hi
First and foremost you should enter in to an agreement of sale with the seller outlining the terms of payment (i.e 50% of sale consideration to bank and remaining to seller) and have it signed by both the parties and in front of reliable witnesses.
After the agreement of sale is entered in to the following are the recommended steps:
1) Make a payment of 50% of Sale consideration or the Exact amount outstanding to the bank that has sanctioned the loan in the form of demand draft drawn in favour of the loan account of the seller.
2) The demand draft should be payable to Mr.XXX, Loan account number xxxxx,_____bank Payable ____.
3) Obtain a loan closure letter from the bank(preferably on the same day when the Demand Draft is handed over) and keep it with you for your records.
4) If the loan is obtained by deposit of title deeds, then you and the seller should make a joint written request to the bank to handover the original title deed to you after the registration of sale deed between you and the seller. Take an acknowledgement from the bank manager that he has received the letter and will do so as mentioned in the letter.
5) If the loan is obtained by simple mortgage, then the banker should handover the original title deeds to you after cancellation of mortgage deed and immediately on the same day the seller and you should register your sale deed and you should take the possession of the property.
Hope this helps.