Delay In Returning Property Documents, Hyderabad Commission Order Union Bank To Pay Rs. 1 Lakh Compensation

Brief Facts of the Case:

Usha Rani Jaishwal (“Complainant”) had an account with the erstwhile Andhra Bank (“Bank”), which later merged with Union Bank of India. She approached the Sultan Bazar branch of the bank to obtain an educational loan for her son. To secure the loan, she offered her property located in Troop Bazar, Hyderabad, as collateral. The bank sanctioned a loan of Rs. 4 lakhs against the title deed of the said property. After repaying the loan amount along with interest, the complainant requested the bank to return her original property documents.

However, despite several requests, the bank had failed to return the original sale deed document to the complainant. The bank's standard response to her inquiries was that they were searching for the document and would return it once it was located. In response to a legal notice sent by her counsel, the bank informed her that the document could not be traced. This situation left the complainant unable to sell her property for her personal needs at a reasonable price due to the unavailability of the original sale deed. Aggrieved, the complainant filed a consumer complaint in the Hyderabad District Consumer Disputes Redressal Commission – I (“District Commission”).

The complainant contended that she had deposited the original sale deed of her property with the bank as security for obtaining an educational loan for her son. She claimed that despite repeated requests, the bank did not return the original title deed to her after the loan was repaid. The complainant argued that the unavailability of the original sale deed had prevented her from selling the property for her personal needs at a reasonable price. She alleged that the bank's negligence and failure to return the title deed amounted to deficiency in service and caused her significant inconvenience and financial loss.

The bank denied the complainant's allegations and contended that they would typically return documents immediately or within two to three days once a loan account was closed. The bank also argued that the complainant had not provided any documentary or other proof to demonstrate that she had been approaching the bank for the return of the original sale deed. They suggested that the complainant may have taken back the deposited title deeds and accused her of attempting to take undue advantage of the situation. The bank maintained that they were not aware of the complete facts and had replied that they would trace the document when the complainant approached them again. Additionally, they pointed out that the complainant had approached the bank after a lapse of 11 years, which they considered a significant delay.

Observations by the Commission:

The District Commission began by considering whether the complaint was barred by limitation due to the complainant approaching the bank after a lapse of 11 years. The District Commission clarified that the law of limitation is founded on public policy and aims to ensure that parties do not resort to dilatory tactics and seek remedies without delay. However, it emphasized that rules of limitation are not meant to destroy the rights of parties but to prevent dilatory tactics.

In this case, the complainant had a valuable right that accrued due to the bank's failure to return the original title deeds. The delay in approaching the bank was a result of the bank's negligence and inaction. The District Commission noted that it would be unreasonable to take away the complainant's right due to the bank's delay in returning the documents, particularly when that delay was a consequence of the bank's negligence. Therefore, the objection raised by the bank regarding limitation was rejected.

The District Commission observed that the bank admitted in a public notice and a reply to a legal notice that the original title deed document, which was in their custody, was not traceable. Consequently, the District Commission concluded that there was a deficiency of service on the part of the bank. It was established that the complainant had deposited the original title deed as security, and the bank's failure to return it constituted a deficiency in their service.

Consequently, the District Commission directed the bank to return the original title deed or provide an indemnity bond, pay an amount of Rs. 1,00,000/- as compensation to the complainant and an additional amount of Rs. 25,000 towards the costs incurred by the complainant.

Case: Smt. Usha Rani Jaiswal vs Union Bank of India

Case No.: CC/505/2022

Advocate for the complainant: M/s KRR Associates

Advocate for the Respondent: M/s Gopi Rajesh & Associates

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