Selling land which is mortgaged to bank

Satish (Querist) 24 August 2023 This query is : Resolved
Hi,
I mortgaged my land with PNB bank via MODT legal things and took 25 lakhs loan and i am paying monthly interest regulary.
I want to sell my land to some other party who is willing to buy @90 lakhs at todays rate.
I dont have money to close the loan and get the documents.
How should I proceed with the sale.
1. Should i borrow initial money from the other party who is interested to by the land and close the loan and get my documents from bank and hand it over to the othre party?
or
2. should i transfer my loan to other party who will lose the loand and pay the remaining amount.

please feel free to suggestions.

Thank you.

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Quick Summary

If you need to sell land that is currently mortgaged to a bank, you have a few options. One common approach is to arrange for the buyer to provide an advance payment. This advance can then be used to clear the outstanding loan and retrieve your property documents from the bank. Subsequently, you can execute a registered sale deed to transfer ownership to the buyer. While selling mortgaged land is possible, it's generally advisable to clear the debt before finalising the sale to avoid complications.

kavksatyanarayana (Expert) 24 August 2023
You may request the buyer to give you advance and with that sum, you can repay the loan amount. There is no problem.

T. Kalaiselvan, Advocate (Expert) 25 August 2023
You can enter into an unregistered sale agreement , get an amount as advance , repay the outstanding loan amount with interest, retrieve the title documents and then transfer the property in favor of the buyer by executing a registered sale deed on the basis of the sale agreement conditions.

Advocate Bhartesh goyal (Expert) 25 August 2023
1 concur with the opinion expressed by expert T. Kalaiselvan.

T. Kalaiselvan, Advocate (Expert) 25 August 2023
Advocate B Goyal Sir, thank you for endorsing my opinion.

P. Venu (Expert) 29 August 2023
To my knowledge, there is legal bar in selling land that is mortgaged. However, the property would continue to be a security against the debt. The prudent course is clear the debt before the deed is executed.

It is not necessary that the original sale deed be produced in order that the conveyance is executed.

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