Legal Question in Real Estate Law in India
transfer of a flat when two mortgages over the same flat are held
X bank financed flat in Kalyan on which Y bank held its right under equitable mortgage. X bank drew Pay order fvg. Y bank a/c name of the seller not mentioning that pay order is towards housing loan. Y bank appropriates proceeds to other loans & refuses to deliver documents of title to x bank. X bank creates registered mortgage over the flat & share certificate is held by X bank. advise the title of X bank & the status of the buyer since original title papers are with y bank.
1 Answer from Attorneys
Re: transfer of a flat when two mortgages over the same flat are held
From facts given it appears that either the Flat Owner or X Bank or Prospective Purchaser did not take necessary care while settling claims of Y Bank. In such cases normally there is exchange of communications between two banks. If, in this case of X & Y Banks, such communication did take place, then same would make is abundantly clear that X Bank indeed remitted money to Y Bank towards Housing Loan only. If this can be established, then act of Y Bank in appropriating sums received for one loan account to another loan account would be not only illegal but an act of misappropriation. In such cases, appropriate remedies under civil as well as criminal law can be explored.
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