Why is the bank insisting on production of environment clearance certificate for residential housing loan?

Or whether you have mistaken encumbrance certificate (EC) for environment clearance certificate. 

If the builder is not cooperating to provide the required documents for obtaining housing loan then you can decide about cancelling the sale agreement and demand for full refund of amount paid by you because it is fault for not complying with the requirements. 

You issue a legal notice demanding the certificate or to cancel and return your advance amount. 

The builder has to provide the requisite documents to enable the purchaser to obtain loan and this requirement seems to be common in that area and appears to be an essential document in order to consider granting home loan. 

You can issue a legal notice to builder as suggested in my previous post and proceed accordingly. 

Remember that you are not at mercy of the builder. 

Seek cancellation of booking and refund as builder failed to provide environmental certificate as required for clearance of bank loan 

2) if builder refuses refund file case before RERA and seek orders to direct builder to refund your money 

3) you have good case on merits 

Act as mentioned herein above 

- Environmental Clearance (EC) for certain developmental projects has been made mandatory by the Ministry of Environment & Forests under the provisions of Environment (Protection) Act, 1986, and  failing to obtain this clearance can lead to legal issues and project delays.

- Further, EC is required for residential projects if the built-up area is more than 20,000 sq. meters and is required before the construction of the project.

- Further, it is a mandatory compliance and banks do not approve a project if the builder doesn't possess this NOC.

- Since, the said project is having 8 acres area , hence the EC is necessary for getting loan from bank.

- If builder refused to provide the same, then you can send a legal notice , and if no positive response, then file a complaint before the consumer forum on the ground of deficiency of services. 

1. This is deficiency in service in part of builder. So you must demand your full amount back, with interest. If the builder refuses,  sue him in consumer court 

Builder is at fault if not EC ? you are entitle to full refund with interest. Complaint to RERA. 

you can file a suit for performance of your agreement against the builder. 

Dear Client,
The builder's inability to provide the EC certificate before the agreed timeline is a clear breach of the terms of the agreement. Kindly review the agreement thoroughly to understand the provisions regarding refund of the paid amount in case of the builder's failure to fulfil their obligations. Send a written notice to the builder demanding a full refund of the amount you have paid (₹3 lakhs + stamp duty). mention the breach of contract and the builder's failure to fulfil their obligations as the grounds for the refund request. If the builder refuses to refund the amount, you can consider filing a consumer complaint before the appropriate consumer forum. The builder’s pressure to switch to other banks may not be in your best interest as that would further complicate the situation. Consulting a real estate lawyer may further give you better results.