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Can I sell mortgaged property
02-Jul-2023 (In Property Law)
My cousin took a homeloan with mine and my father's document. Property is in agra and it was agreed that he will pay the emis on time. For one and a half year he paid on time. But sopped suddenly now i wish to sell off the property as i can not continue paying the home loan emis. Icici bank evaluated the property as 45 lakhs and approved the loan for 30 lakhs. I had a word with couple of brokers and they stated it can be sold off only for 24-25 lakhs. It means loss of 6 lakhs for me. Please advise what best can i do here
The bank can file a suit for recovery of funds and if those are not recovered or cannot recovered then and only the bank can pray to the court for possession of the property or to recover their funds by selling the attachment (property itself).
Basically the bank only needs funds, no matter how you do that, no matter you repay the loan by selling the mortgaged property. The onus will lie on the purchaser as whether they have checked the property value or any sort of loan running on the property.
In one way, if the bank has given the loan to purchase your property then it has the share on your property but banks cannot ask for their share to property but they can only ask for their funds, this can be explained by the below mentioned example:-
If the property value is 45 lakhs and if you have taken the bank loan of 15 lakhs only, so in common man's language bank has 1/3rd share but it is not like this. If after 5 years the property value becomes 90 lakhs then you will have to pay the banks those 15 lakhs+their interest and nothing else, bank cannot ask for their 1/3rd share for about 30 lakhs after those 5 years.
If the bank files suit for recovery of funds but if you sell that property while pendency of suit and you get 90 lakhs then you can very well repay bank loan, bank and court will have no objection to that but you cannot highlight yourself that you have done this as this is not allowed till you get the no objection certificate from bank.
Basically the bank only needs funds, no matter how you do that, no matter you repay the loan by selling the mortgaged property. The onus will lie on the purchaser as whether they have checked the property value or any sort of loan running on the property.
In one way, if the bank has given the loan to purchase your property then it has the share on your property but banks cannot ask for their share to property but they can only ask for their funds, this can be explained by the below mentioned example:-
If the property value is 45 lakhs and if you have taken the bank loan of 15 lakhs only, so in common man's language bank has 1/3rd share but it is not like this. If after 5 years the property value becomes 90 lakhs then you will have to pay the banks those 15 lakhs+their interest and nothing else, bank cannot ask for their 1/3rd share for about 30 lakhs after those 5 years.
If the bank files suit for recovery of funds but if you sell that property while pendency of suit and you get 90 lakhs then you can very well repay bank loan, bank and court will have no objection to that but you cannot highlight yourself that you have done this as this is not allowed till you get the no objection certificate from bank.
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Adv. Siddhant Sharma
Delhi | 200+ Answers
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