The Consumer Disputes Redressal Commission, Thrissur, comprising President C. T. Sabu and Member Ram Mohan R., has held the State Bank of India liable for deficiency in service after it lost a customer's original property title deed deposited as security for a housing loan. The Commission observed that the bank's failure to preserve and return the original document adversely affected the complainant's property sale transaction and directed the bank to pay compensation for the financial loss, mental agony and litigation expenses.
Facts:
The complainant, Roney Mathew, resident of Thrissur, Kerala, filed a consumer complaint against the Manager of State Bank of India's P.B. Branch, Round South, Thrissur, alleging deficiency in service over the loss of his original property title deed, which had been deposited with the bank as security for a housing loan. The complainant stated that after discharging the entire loan liability on July 12, 2017, he sought the return of the original title deed but was informed by the bank that the document was not traceable in its custody.
The complainant further stated that he had entered into an agreement for sale of his apartment, F7, Hi-Life King Crest Apartments, with prospective purchasers Mary and Thomas on April 24, 2017, for a total consideration of ₹23 lakh. He claimed that the purchasers insisted on reducing the sale price after learning that the original title deed had been lost by the bank. Consequently, the property was ultimately sold on October 5, 2017, for ₹17 lakh after obtaining a certified copy of the original title deed, resulting in an alleged financial loss of ₹6 lakh.
The complainant approached the Commission seeking ₹6 lakh towards the alleged loss in sale consideration, ₹4 lakh as compensation for mental agony, hardship and inconvenience, along with litigation costs.
The bank admitted that the original title deed was not traceable in its custody but contended that it had taken remedial measures by filing a police complaint, publishing a newspaper notice regarding the loss and facilitating the complainant in obtaining a certified copy. It also disputed the genuineness of the sale agreement, alleging that it was fabricated in collusion with the purchasers, and argued that the purchasers were necessary parties to the proceedings.
Observation and decision:
The Commission observed that the bank had admitted losing the complainant's original title deed while it was in its custody. It held that banks are obligated to ensure the safe custody and return of original title documents after repayment of loans. The Commission clarified that filing a police complaint, publishing a newspaper notice or providing a certified copy could not absolve the bank of its liability.
The Commission referred to several NCDRC decisions, including Indian Overseas Bank, Hyderabad v. K. Bal Reddy and Another (Revision Petition No. 3800/2014), State Bank of India v. Amitesh Mazumdar(Revision Petition No. 2732/2019), Bank of India v. Mustafa Ibrahim Nadiadwalla (First Appeal No. 226/2016), Secretary/Manager, Mayyanad Regional Co-operative Bank v. Ibrahimkutty (First Appeal No. 288/2014), and Union Bank of India v. Veerendra Kumar Goyal. These decisions recognised the loss of original title deeds by banks as deficiency in service.
Accepting the complainant's claim of financial loss, the Commission noted that the original sale agreement recorded a consideration of ₹23 lakh, while the subsequent sale deed reflected ₹17 lakh and specifically mentioned the non-availability of the original title deed. It also referred to IDBI Bank Ltd. v. Bijth Simon (Revision Petition No. 37/2022), emphasising the need to establish a causal connection between the loss of title documents and the reduction in sale consideration.
On compensation for mental agony and hardship, the Commission relied on the Supreme Court's decision in Charan Singh v. Healing Touch Hospital, (2000) 7 SCC 668, observing that compensation must be reasonable and proportionate to the circumstances of the case.
Accordingly, the Commission allowed the complaint and directed SBI to pay ₹6 lakh towards pecuniary loss, ₹4 lakh as compensation for mental agony and hardship, and ₹25,000 towards litigation costs, along with 9% annual interest from the date of filing of the complaint until realisation. The bank was directed to comply within 30 days of receiving the order.