How to scrutiny title deeds

 How to Scrutiny of Title Deeds  

Obtention of Legal Scrutiny Report from Panel Advocate is common 

practice in respect of mortgage based loans in many Banks. 

One Bank has sanctioned two housing loans each of Rs 30 lacs to two 

individuals to purchase residential flats in the same residential complex. 

As per Approved Plan the Complex is for 20 flats (5 flats per floor and in 

4 floors). The flats financed by Bank are in the first floor. As the 

construction of flats in first floor is completed, Bank has released the full 

amount. Construction of remaining floors is not yet commenced. Except 

2 flats financed by Bank, Builder is unable to sell other 3 flats in the first 

floor.  

It is learnt that some litigation has come to surface. It has come to light 

that the Builder who has sold the property is not having proper title over 

the property and it is proved that he has cheated the Borrowers with the 

help of Panel Advocate of the Bank. When the Builder is not having 

proper title over the property, it is natural, that the sale of flats to 

individuals not valid. Aggrieved Borrowers have filed a case in Court of 

Law against Bank. 

Their contention is that the Bank is responsible for their loss. They  

contend that it is at the advise of the Bank that they have approached 

Specified Advocate and due to Bank’s wrongful selection of Advocate, 

they are put to loss. Hence, they contend, Bank should not demand 

repayment of loan and in turn Bank to refund whatever amount collected 

towards Processing and other incidental charges along with margin 

amount with interest.  

  

In the Court of Law, it is questioned whether Bank has given any option 

to Applicant (Borrower) for obtention of Legal Report from any Advocate 

or is it at the direction of Bank, the Advocate is selected to peruse 

documents for Applicants. Bank has failed to prove that an option is 

given to Applicants (Borrowers) to select Advocate. As a result Bank has 

lost the Case. 

To overcome such instances the following may be examined: 

a) Advise prospective borrowers (Applicants) to get the documents 

scrutinised by Advocate of  their choice (need not be from Bank’s Panel) 

in addition to one  from Bank’s Panel Advocate.  

or / and 

b) obtain a declaration / consent from the Applicant that they do not  

have any objection for obtention of Legal Report from our Panel /  

Specified Advocate.  

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