Why you must check the EC before bidding.

An Encumbrance Certificate (EC) is a mirror to the property's legal history. It is a document issued by the sub-registrar's office that lists all registered transactions (mortgages, sales, transfers) on a property for a specific period.

Why it Matters in Auctions

Even though a bank is auctioning the property, it ensures that the bank's mortgage is formally registered. More importantly, it helps you detect if there are multiple loans on the same property or if the borrower has illegally sold it to someone else while it was mortgaged.

How to Read an EC

Form 15: If there are encumbrances (loans, leases, sales), they appear on Form 15. You should see the entry of the mortgage in favor of the auctioning bank.
Form 16: This is a 'Nil Encumbrance Certificate', meaning no transaction happened in that period. You want Form 15 showing the bank's claim, but no other subsequent claims.