Order Date: 19th August 2024
Order Name: State Bank of Travancore vs Dr. S. Sunil
Case No.: First Appeal No. 1652 of 2017
The National Consumer Disputes Redressal Commission (NCDRC) held the State Bank of Travancore liable for losing the original title deed submitted by a complainant as security for a housing loan. The bench, consisting of Mr. Subhash Chandra (Presiding Member) and Dr. Sadhna Shanker (Member), found the bank guilty of deficiency in service.
Brief Facts:
The complainant took a housing loan from the State Bank of Travancore and submitted several documents, including the original title deed, as security. After repaying the loan, he approached the bank to retrieve his title deed, only to find out that the bank had lost it. Aggrieved, he filed a complaint with the State Consumer Disputes Redressal Commission, Kerala, which ordered the bank to pay Rs. 5,00,000 as compensation. Unsatisfied with this decision, the bank appealed to the NCDRC.
Observations of the NCDRC:
The NCDRC noted that the bank admitted to losing the original title deed and had made efforts to locate it. The bank had obtained a certified copy from the Sub-Registrar’s office and offered it to the complainant, arguing that no actual loss was incurred since no evidence of injury was provided.
However, the complainant argued that the loss of the original title deed reduced the property’s value and hindered his ability to secure future loans against it. The NCDRC agreed, stating that losing the original title deed by the bank was indeed a deficiency in service. As the custodian of the documents, the bank was responsible for their safekeeping. The provision of certified copies did not compensate for the loss of the original documents, which compromised the complainant’s legal title.
The NCDRC referred to previous cases to support its decision. In the case of "Pooja Pincha & Anr. Vs. State Bank of India" [IV (2016) CPJ 28 (NC)], it was held that losing ownership documents was a serious matter and the bank had failed in its duty. Similarly, in "Citi Bank & Ors. Vs. Ramesh Kalyan Durg & Ors." [MANU/CF/0180/2016], it was ruled that the bank should compensate the complainant and bear the publication cost, in addition to obtaining certified copies of all documents at its expense. The NCDRC also cited "Bank of India vs. Mustafa Ibrahim Nadiadwala" [MANU/CF/0809/2016], where the bank was held liable to pay compensation due to the impact of the loss on the property’s value.
Based on these considerations, the NCDRC found the State Commission’s order well-reasoned, and the compensation awarded appropriate. Consequently, the appeal was dismissed.
Takeaway:
Banks are responsible for the safekeeping of documents submitted as security. Losing such documents is considered a deficiency in service, and affected parties are entitled to compensation.
