The National Consumer Disputes Redressal Commission, presided by Mr. Subhash Chandra and Dr. Sadhna Shanker, held that loss of ownership documents of the customer by the bank amounts as negligence and the bank must compensate the customer for losses stemming from the document loss.
Brief Facts of the Case
The complainant got a housing loan from the State Bank Of Travancore by pledging sale deed, tax receipts, possession certificate, location certificate, encumbrance certificates and title clearance certificate as a security. Subsequently, the complainant sought from the bank to fetch the title deed upon which they realized that it had been lost. Claiming, deficincy in service, the complainant filed a complaint before the State Commission for Kerala. The State Commission allowed the complaint and ordered the bank to pay Rs. 5,00,000 together with interest @ 12% p.a.. Consequently, the Bank filed an appeal before the National Commission.
Contentions of the Bank
The bank argued that the complainant failed to disclose that they had made a complaint to the Banking Ombudsman and that the case is precluded by the doctrine of estoppel. It was further contended that the State Commission neither had the jurisdiction to entertain such matters as these raise legal and factually sensitive issues that ought to be dealt with in a civil court.
Observations by the National Commission
The National Commission observed that the primary question raised was whether there was a deficiency in service by the bank. It was acknowledged that the complainant had paid for the housing loan in full while the bank, which held the title deeds, was at fault, which was a deficiency in the service. The commission observed that the certified copy did not make up for the loss of the originals, citing a case of Pooja Pincha & Anr VS State Bank of India, wherein the court held that the loss of ownership documents is a significant issue and the bank was negligent of its duties. Furthermore, , the commission relied on the case of Citi Bank & Ors V/s Ramesh Kalyan Durg & Ors where it was held that the bank is liable to reimburse the complainant for the losses arising out of the document loss. Likewise, in Bank of India vs. Mustafa Ibrahim Nadiadwala, it has been held by the court that the bank is liable for paying compensation because the property had become less valuable after the title deed was lost.
Based on these precedents, the commission upheld the State Commission's order and dismissed the appeal.
Case Title: State Bank Of Travancore Vs. Dr. S. Sunil
Case Number: F.A. No. 1652/2017