Bank ordered to pay ₹3 lakh compensation for failure to return property documents

The Mandya District Consumer Disputes Redressal Commission has directed a public sector bank to pay compensation of ₹3 lakh for its failure to return the original documents pertaining to a property in Bengaluru deposited with the bank for raising a house building loan.

According to a complaint filed by Suguna, a resident of Arakere village in Srirangapatna, her late husband A.M. Ramachandriah had obtained a house building loan for his property in Judicial Layout in Jakkur Allalasandra in Bengaluru.

Though Mr. Ramachandraiah died after the loan was sanctioned, his legal representatives had cleared the entire outstanding loan amount on February 21, 2018. Though Ms. Suguna and her children had completed all the formalities to receive the property documents deposited with the bank by submitting the necessary application form with Mr. Ramachandraiah’s death certificate and the affidavits of the three legal heirs, the bank authorities had not returned the documents.

The reason cited by the bank authorities was that the property documents had been kept in a safe locker of the bank in Mysuru and they would be returned after due verification. Despite several correspondences with the bank and issue of a legal notice on May 11, 2019, the bank had not returned the documents, the complainant said.

The complainant, who required the documents to change the khatha and for other purposes to safeguard the property that was standing in her husband’s name, lodged a complaint with the Commission on June 18, 2019, against State Bank of India, Local Head Office, Bengaluru, the bank’s RACPC (Retail Assets Central Processing Centre) in Saraswathipuram in Mysuru, and managers of bank’s branches in Krishnamurthypuram in Mysuru and R.P. Road in Mandya.

After hearing the arguments in the case, the Commission, headed by its President M.S. Ramachandra, noted that the bank represented by its counsel, who filed a written version, had admitted that the entire loan amount had been cleared and there is no due from the complainant. The bank also admits that there has been a delay in returning the original documents, but the reason for the delay is not explained, the Commission has observed.

The Commission, in its order on December 14, 2020, said that the act and conduct of the opposite party bank shows that there is a deficiency in service on their part and also said that the delay in returning the original documents to the complainant is not explained with reasonable cause.

The Commission referred to a judgment rendered by the National Consumer Disputes Redressal Commission, Delhi, upholding a State Commission’s ruling ordering the petitioner bank to pay a compensation of ₹5 lakh for losing original documents deposited by a complainant.

In this case, the Mandya District Consumer Disputes Redressal Commission said, the bank had either misplaced or lost the documents deposited by the husband of the complainant and said payment of ₹3 lakh would be an appropriate compensation for loss of the original documents.

The Commission has also ordered the bank to return the documents within 45 days from the date of the order failing which it shall pay a penalty of ₹100 per day till the order is complied with, besides ₹10,000 towards deficiency and mental agony and ₹3,000 towards costs.

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