Is it legal to accept advance without bank loan approval?
The owner of the house has received an advance of 1 lakh rupees from the buyer for the sale of the house and signed an e-stamp agreement notarized, stating that the buyer does not want the house and the money will not be refunded. However, the house has a 25 lakh bank loan. If the buyer asks for the money back, the owner refuses to return it. Is it a crime to accept an advance of 1 lakh for selling a house with an outstanding bank loan without informing the bank and getting its consent? When I went to the police station, the PSI wrote and signed a statement on behalf of the owner stating that they did not give any support. Is it valid to accept an advance for selling the house without bank loan approval? If not, how can the buyer recover the 1 lakh advance?
It is not illegal to accept an advance for selling a house with a bank loan but the owner must clear the loan before transferring ownership. If the agreement clearly states that the advance is non-refundable, the buyer may have difficulty recovering the amount unless there was fraud or misrepresentation. However, if the owner failed to disclose the outstanding loan and misled the buyer, the buyer can file a civil suit for recovery and a complaint for cheating under Section 420 IPC. Since the police did not help, the buyer should approach a civil court or consumer forum for legal action.
Sir, selling a mortgaged house without informing the bank and getting consent is legally invalid. The buyer can file a civil suit for recovery of the 1 lakh advance for breach of contract. The buyer should gather all related documents and seek legal counsel. Police involvement is not typically applicable in civil matters, unless fraud is proven. It is advised to consult an expert lawyer who will assist you with the best course of action. For further legal assistance contact us on our helpline number.
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