Value Of The Property Drastically Depreciates Upon Loss Of Its Title Deeds By The Bank: NCDRC

In this case, a person took a loan of Rs. 20 lakh from HSBC by mortgaging his house with the bank. However, the bank could not return the original title deeds as the same were lost by it. Hence, the consumer filed the complaint before Rajasthan State Consumer Disputes Redressal Commission, Jaipur claiming compensation of Rs. 95 lakh stating that loss of original title deeds had caused approx 50% depreciation in the value of his house's market value which he estimated to be Rs. 190 lakhs at that time. He further sought the relief of Rs. 3.75 lakh towards mental agony and Rs. 1.25 lakh towards costs of litigation, thus, totalling a compensation of Rs. 1 crore. However, the State commission directed the complainant to approach the District Consumer Forum by observing that the consumer had assessed the loss of value of his house unrealistically and exaggeratedly. The aforesaid final order of the State Commission was challenged by the complainant before NCDRC by way of appeal under Section 19 of the Consumer Protection Act, 1986.

Ld. Counsel for the Respondent Bank emphasised upon the fact that the lease deed executed by the Jaipur Development Authority in the name of the complainant was for Rs. 50,309/- only and the value of loan given by the bank was just Rs. 20 lakhs; hence, the complainant could not have claimed Rs. 95 lakhs towards depreciation in the value of property due to loss of original title deeds.

Countering the Bank's arguments, Ld. Counsel for the Appellant Mr. Praveen Kumar Jain referred to Section 17(1)(a)(i) of the Act of 1986 which states that State Commission shall have jurisdiction to entertain complaints where the value of goods or services and compensation claimed exceeds Rs. 20 lakhs but not Rs. 1 crore. He argued that value of services i.e. the loan amount of Rs. 20 lakh was not the determining factor to decide the pecuniary jurisdiction in the present case as the grievance to the Appellant was caused due to loss of original title deeds and not because of any deficiency in the loan advanced by the Bank. He further argued that no formula has been provided to estimate the amount of compensation while filing the complaint; hence, a consumer may claim any reasonable amount as per his own wisdom towards compensation depending upon the facts and circumstances of a case and the State Commission did not have jurisdiction to direct the complainant to reduce the amount of compensation which in the prima facie view of the State Commission was not reasonable or justified.

He further argued that though the State Commission if it allows his complaint would be within its rights to award compensation which in its own understanding it finds to be just and equitable but it cannot impellingly force the complainant to ab initio pray for a drastically reduced amount and to bring it within the pecuniary jurisdiction of the forum below.

National Commission appreciated the aforesaid submission of the Ld. Counsel for the Appellant and observed that non-availability of its original title documents unarguably puts a property under suspicion in the eyes of the general public or prospective buyers and decisively impacts its value detrimentally. The consequences continue in perpetuity, they continue even after the property has devolved to the heirs i.e. the value-extenuating consequences sustain indefinitely. The adverse consequences of non-availability of the original title documents do not appear to have been realistically appreciated in the right pragmatic perspective by the State Commission.

National Commission minced no words in criticising the order of the State Commission by further observing that 'disapprovingly enough, we notice that there are makings of post-haste adjudication and pre-judging of the case on the part of the State Commission. The observations in respect of the quantum of compensation as have been made in the State Commission's Order is also so likely to go to unduly influence the District Commission in the contingency that the complaint goes before it. All this is to the utter detriment of the complainant and necessarily puts him to prejudice unjustly'.

Accordingly, the matter was remanded back to the State Commission for deciding it afresh on merit as per the law.

Counsel for the Appellant: Mr. Praveen Kumar Jain with Mr. Naveen Kumar Jain, Advocates