Buyer taking loan from sellers bank

Approach Bank Ombudsman. If that doesn'rt work approach DRT

Any financial institution can insist for sufficient collateral security, it is at the discretion of the institution.

DHFL is not a Bank and it is NBFC and Banking Ombudsman is not proper forum.

In case of mortgage also, personal guarantee from the owner is insisted in all Banks and NBFC, to ensure that incase of some problems in mortgage, institution can also proceed against guarantor.  This is common and not unusual.

Either you accept the term or approach another financial institution.

Mere seeking a guarantee from the person who mortgaged the property is not a crime and is within your hands.   If you can not convince your father in your own interest, do not expect any strangers will help to bar the laid down clause for your convenience and interest.

DHFL response to customers' grievance is poor as per the past records.  

Does that mean a person who doesn't have another property can't apply loan.....as far as guarantee is considered I believe sellers outstanding amount cheques are sufficient. How come DHFL initiate any process without telling this clause up-front.. Why this shocker is so late when sale agreement date is so near.

1.Does that mean a person who doesn't have another property can't apply loan

Please do not assume things that are not said.  The owner of a property has to sign as guarantor also is the norm.  Confine to this guidance alone.  There are crores of loans sanctioned without any security but not not a single personal loan can be sanctioned without personal guarantee.

2..as far as guarantee is considered I believe sellers outstanding amount cheques are sufficient. 

Laid down Norms /system/procedures are not based on borrower's beliefs.  There is no guarantee that all cheques will be honored on presentation by all borrowers in general.. If the belief is true, there is no necessity to take any third party guarantee or security at all.

3..How come DHFL initiate any process without telling this clause up-front.. Why this shocker is so late when sale agreement date is so near.

Some general terms and clauses such as the person who offered mortgage has to stand as guarantor also need not be stated in sanction term and borrower has equal responsibility to know the things.  Still the doors are open, if there is any other financial institution that can finance without taking guarantee of the person who mortgaged the property, you can go for it.

The detailed and exhaustive replies by Shri G.L.N.Prasad are appreciated.