Suman Santosh (Executive) 13 May 2013

Bank blocking property document after pre-closure

I have pre-closed a home loan and now the bank gave a message that my property document is blocked because i have to clear personal loan.

Due to my financial problems, i could not pay my personal loan and requested the bank that i will pay when my financial status improves.

I am in the process of selling my property and paid off my home loan with the advance amount received from buyer. But now the bank says that I have to clear my personal loan to get my property documents back.

Is it right on the bank to hold my property document? How can they link both personal loan and property loan?

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Ajit Singh Cheema (practising Advocate) 13 May 2013

No Right Of General Lien to Bankers on Mortgaged property: The banker has no right of general lien on the property specifically mortgaged in a particular account .But the bankers generally don’t resist from using this right. The Heading Of this note is based on a Wonderful decision by a division bench of Madras Court in a very recent time. The case under reference is

State Bank Of India Vrses Mrs.Jayanthi ,AIR 2011Madras 179.