Regarding purchase of property lacking building sanction plan

^{A prospective buyer, Mr. Z, intends to purchase the Second and Third Floors of a property situated in a regularized colony/area of Delhi. Mr. Z applied for a home loan, which was rejected by the bank on the grounds that the building sanction plan for the property is not available.}

^{The plot, measuring approximately 1500 sq. ft., was originally purchased by Mr. X in 1936. After his demise, his spouse constructed a building on the said plot in 1987, having a covered area of about 1000 sq. ft. The structure initially comprised a Basement, Ground Floor, First Floor, and Second Floor.}

^{Subsequently, the spouse of Mr. X sold the Basement, Ground Floor, and First Floor to different purchasers. In 1988, Mr. Y purchased the Second Floor along with roof rights, and mutation in his favour was duly carried out in 1990. Thereafter, Mr. Y constructed an additional (Third) Floor over the Second Floor. Mr. Y now intends to sell the Second and Third Floors (with terrace rights) to Mr. Z.}

^{All ownership and title documents including the chain of sale deeds, relinquishment deeds, current sale deed, mutation records, house tax receipts, and electricity and water bills are stated to be in proper order. The only missing document is the building sanction plan.}

^{Mr. Y has explained that the building was constructed several decades ago, at a time when sanctioned building plans were not strictly enforced. However, the bank has maintained that a sanctioned building plan is mandatory for the purpose of home loan approval, and has even advised Mr. Z not to proceed with the purchase without it.}

^{As the building already stands constructed, a new building sanction plan might be made at this stage. Some persons have suggested that the Municipal Corporation of Delhi (MCD) provides  regularization of old properties and buildings lacking approved plans.}

1. ^{In the absence of a sanctioned building plan, should Mr. Z proceed with the purchase of the property?}

2. ^{Will the absence of a building sanction plan pose any legal or procedural hurdles for future renovation, reconstruction, or structural modification by Mr. Z?}

3. ^{Should Mr. Z insist that Mr. Y first obtain regularization of the building before completing the sale transaction?}

^{It is also pertinent to mention that, as per the property agent, a large number of old buildings in Delhi face similar issues regarding non-availability of sanctioned building plans.}

^{Learned opinion /advice on above and any practical or legal recourse available to regularize the property or mitigate the potential risks associated with the absence of a building sanction plan may kindly be provided.}

^Regards.