About no due certificate from the bank
Adv M.D.Azhar
(Querist) 28 October 2014
This query is : Resolved
Sir, Can any bank can deny to issue no due certificate? sir my grand father had a agricultural land and we also took some loans over the said land. Now the property has been divided among the brothers. So the loan which was taken by my grand father, still shows the entry of encumbrances. Which has been recently paid by all of us. Now every one has individual account but due to legal land revenue procedure entires of encumbrances is still sows in land revenue records. So my father has applied for the agricultural loan (crop Loan) so the bank said u have to get no due certificate from the concern bank. so i went to s.b.i. bank from where we had taken loan before and asked him to issue no due certificate on the name of my father. so the manager has replied that, we have already issued no due certificate on the name of your grandfather. so there is no need to issue other one. But the bank from which i have applied needs no due certificate, so i asked manager that i am ready to file the affidavit regarding the loans. yet he said as per the procedure no due certificate has to be produced. Now I complain to the AGM of s.b.i. that please issue the N.D.C. that is required in the bank where i applied but he also saying that, we can not issue the no due certificate on the name of my father, the land is now on the name of my father, sir please help me out, is there any rule and regulation regarding the said issue? How to deal wit the said issue?
Anirudh
(Expert) 28 October 2014
Dear Mr. Azhar,
Can you please indicate the complete wordings of the encumbrance entry?
Rajendra K Goyal
(Expert) 28 October 2014
1. The loan was taken by your grandfather and no dues certificate was rightly issued in his name. You can get the mortgage encumbrance removed / cleared in the revenue records standing in the name of your grandfather.
2. Your present Bank should not insist for no dues certificate as there exist no encumbrance entry in the name of your father and the land has since been transferred in the name of your father. Your new Banker can should take an affidavit from your father in this respect.
3. You have wrongly lodged a complaint to SBI, they are right in their stand. They rightly refused to issue NDC to a non customer.
4. However, if necessary you can lodge written request to SBI to issue no dues certificate in the name of your grand father. Bank can issue such certificate by charging following charges:
Priority sector – No charges.
Others Rs.102/- per certificate.
Guest
(Expert) 28 October 2014
Dear Author,If the Loan of your Grandfather is a Registered Mortgage they are the Bankers are bound to cancel the same at Registrar Office irrespective of No Due Certificate.Contact a Local Good Advocate.
Anirudh
(Expert) 29 October 2014
I am sorry.
In para 1 Mr. Goyal rightly says "1. The loan was taken by your grandfather and no dues certificate was rightly issued in his name."
As a corollary Mr. Goyal very rightly says that "3. ...They rightly refused to issue NDC to a non customer."
But the reply contained in other paragraphs are totally wrong. For instance In para Mr. Goyal says "4. However, if necessary you can lodge written request to SBI to issue no dues certificate in the name of your grand father." This is completely contrary to his own reply in para 1.
The reply of Mr. Goyal in para 2 "2. Your present Bank should not insist for no dues certificate as there exist no encumbrance entry in the name of your father and the land has since been transferred in the name of your father." is totally wrong as the querist himself has stated that "Now every one has individual account but due to legal land revenue procedure entires of encumbrances is still shows in land revenue records."
Therefore, when once an encumbrance entry is there against the father of the querist, it cannot be said that "your present Bank should not insist for no dues certificate as there exist no encumbrance entry in the name of your father".
The whole problem has arisen because even while the encumbrance against the name of the grand father was still existing, the property was partitioned. Consequently, the encumbrance travelled to the partitioned portions now standing in the name of individuals i.e. father of the querist etc.
On the basis of the N.D.C. given by the Bank, at the most, the encumbrance against the grand father property can get removed in the revenue records. But unfortunately, unlike in the case of encumbrance in the title which followed to the subsequent holders of the property, the benefit of cannot travel to the shares of the subsequent holders (i.e. property standing in the name of the father of the querist).
It is precisely here, the exact and complete wordings of the encumbrance entry standing against the property in the name of the father of the querist assumes importance.
Even after getting this vital information, one has to put in efforts to get the encumbrance clearance by approaching the Revenue Authorities (not bank authorities).
However, without this information, it will be an uphill task to prove that the property in the name of the persons like the father of the querist has no encumbrance.
Guest
(Expert) 29 October 2014
Dear Author,The Encumberrance Should be Cleared by the Bankers in Registrar Office.Mere Producing Of NOC will not enable the Registrar To Cancel the Same.Bank is supposed to Register The Receipt of Full Payment in Registrar Office to Clear the Mortgage Entry.This is the Practical Solution.(This is not a reply to Anonymous)
Adv M.D.Azhar
(Querist) 29 October 2014
thanks experts now i will try to solve this problem.
Guest
(Expert) 29 October 2014
Welcome Please
K.K.Ganguly
(Expert) 29 October 2014
You can ask for a copy of the said No-Due Certificate issued in favour of your grandfather to settle the matter.
T. Kalaiselvan, Advocate
(Expert) 02 November 2014
The author being an advocate, dont know whether it is his personal issue or that of his client's, has been advised various steps that may be followed to solve the crisis. If bank loan was on a registered mortgage, no doubt the bankers are bound to cancel the same to clear the encumbrance.
