Delhi State Commission Upholds ₹10 Lakh Compensation Against LIC Housing Finance For Losing Original Property Documents

The Delhi State Consumer Disputes Redressal Commission, comprising Justice Sangita Dhingra Sehgal (President) and Pinki (Member Judicial), upheld an order directing LIC Housing Finance Ltd. to pay ₹10 lakh compensation for losing the complainant's original property documents, holding the finance company guilty of deficiency in service after it failed to return the title deeds despite full repayment of the housing loan.

Brief Facts:

The complainant, Mrs. Bindu Roy, had availed a housing loan of ₹1 lakh from LIC Housing Finance Ltd. in 1995 for purchase of a property in New Delhi. She later obtained an additional loan of ₹2 lakh for renovation of the flat. According to the complainant, the original title documents of the property were deposited with the finance company as mortgage security, which was also acknowledged by the company through a certificate issued in 1996.

After repayment of the entire loan amount in August 2010, the complainant repeatedly requested return of the original sale deed and title documents through several letters. However, despite repeated reminders, the finance company neither returned the documents nor provided any satisfactory explanation regarding their whereabouts.

Aggrieved by the non-return of the original title deed, the complainant approached the District Consumer Commission alleging deficiency in service and sought compensation for loss of the documents and the resulting hardship. The District Commission allowed the complaint and directed LIC Housing Finance Ltd. to pay ₹10 lakh as compensation for loss of the original property documents.

Challenging the order, LIC Housing Finance Ltd. filed an appeal before the Delhi State Consumer Disputes Redressal Commission, contending that the complainant had never deposited the original sale deed and that the compensation awarded was excessive.

Contentions of the Opposite Party :

LIC Housing Finance Ltd., contended that the complainant had never deposited the original sale deed with the company and that the complaint was filed with ulterior motives. It argued that the compensation of ₹10 lakh awarded by the District Commission was excessive and disproportionate, especially when no actual loss or misuse of the documents had been proved.

Observation and Decision :

The Commission observed that the complainant had fully repaid the housing loan and had repeatedly requested return of the original title documents, but LIC Housing Finance Ltd. neither returned the documents nor provided any satisfactory explanation regarding their loss. The Commission relied upon the certificate issued by the finance company itself, which clearly acknowledged that all original property documents were mortgaged with it.

The Commission held that the Opposite Party failed to produce any cogent evidence to show that the original sale deed was never deposited. It further observed that loss of original title documents can seriously affect the owner's ability to sell or mortgage the property and may reduce its market value, thereby causing continuing hardship and uncertainty.

Holding that the District Commission had rightly appreciated the facts and evidence on record, the State Commission upheld the order directing LIC Housing Finance Ltd. to pay ₹10 lakh compensation for loss of the original sale deed and dismissed the appeal.

Case Title: HOUSING FINANCE LTD. VS. SMT. BINDU ROY

Case No.: FA-115/2019

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