NCDRC Holds IDBI Bank Liable For Loss Of Original Documents

The complainants have filed the original complaint under section 21 read with section 22 of the Consumer Protection Act, 1986 against the opposite party/IDBI bank. The complainant alleged that the opposite party was guilty of deficiency in service in losing/destroying the original title documents of his residential flat. The documents were deposited with the opposite party for securing a home loan taken from the Bank.

The Commission observed that the loss to the complainants is manifest. The absence of the documents would certainly make it difficult for the complainant to put his property on the market when they want to sell it. Documents such as the Builder Buyer Agreement, Flat Purchase Letter, and full and final payment receipts issued by the seller are extremely essential documents to establish title to the property. The essential nature of these documents is vouched safe by the fact that the opposite party had required the complainant to deposit the same in original in order to secure the home loan advanced to the complainants.

The complainants approached the opposite party for a housing loan to buy a residential flat. As a result, a home loan of Rs.30,67,714/- was sanctioned on 05.07.2010. According to the loan requirements, the complainants deposited the original flat documents with the opposite party.

On 25.01.2018, the complainants approached the opposite party to foreclose the home loan. The opposite party, vide e-mail dated 02.02.2018, confirmed that the original flat documents would be handed over at the time of foreclosure of the home loan. But the opposite party failed to hand over the original documents at the time of the closure of the loans.

On 21.04.2018, the opposite party conveyed that the original title documents had been destroyed/ damaged by a fire in the Stockholding Documents Management Services Ltd. on 11.12.2017.

The Complainants alleged that the opposite party failed to take due care of the original title documents and accepted the foreclosure of the loans without disclosing its destruction.

It was further stated that the opposite party failed to provide a copy of the FIR regarding this fire and the loss of original documents. Moreover, the opposite party has not provided the copy of the advertisement published by it in this regard.

However, the opposite party provided a certified copy of the registered Sale Deed cum Sub Lease Deed on 05.05.2018 of flat, which the complainants received under protest. According to the complainants, the loss of original title documents created a defect of permanent nature about the strength of the ownership title of the said flat. Because of this, several efforts to sell the flat by them have not fructified. Their application in June 2018 to HDFC Bank for a loan was also declined by the Bank as only the certified copy of the registered Sale Deed cum Sub Lease Deed was available. Moreover, the complainants alleged that they had suffered a financial loss of Rs.1,05,00,000/-, which is the current market value of the said flat based on the revised Cost Inflation Index.

Through the written statement, the opposite party/ Bank stated that it had a centralized storage system of original title deeds and loan documents of borrowers in Mumbai. The opposite party appointed M/s Stock Holding Corporation of India (SHCIL) Projects Ltd for safe custody and storage of all documents of its customers due to space constraints. The opposite party had executed a Service Level Agreement with SHCIL on 08.10.2015. It is contended that at the time of the fire incident on 11.12.2017, the documents were in the custody of M/s SHCIL.

The opposite party produced a copy of the letter dated 19.12.2017 by SHCIL to the concerned police station in Navi Mumbai regarding the incident of fire, spot panchnamma prepared, news-paper reports. It was further contended that the complaint is not maintainable as the complainants have not impleaded M/s SHCIL as a party to the complaint.

The opposite party/ Bank produced the copy of the original Sale Deed dated 22.03.2016, through an additional affidavit dated 12.04.2021, stating that SHCIL has retrieved the documents.

The complaints relied upon the order of the Commission in Consumer Case no. 46 of 2014 – Rajesh Gupta vs Axis Bank Ltd., decided on 27.08.2018, which had upheld the claim of the complainant, who had alleged that the opposite party had failed to return the documents which were entrusted to it and it had been held that the opposite party had failed to discharge its obligations towards the complainant.

The NCDRC allowed the complaint and observed that the opposite party has not disputed that they have failed to return all the original title documents of the flat entrusted to them by the complainant. Therefore, there is deficiency in service on the part of the opposite party.

The NCDRC directed the opposite party to issue an indemnity bond in favor of the complainant regarding all the documents which have not been returned in original to the complainants. The NCDRC also directed the opposite party to pay Rs.20 lakhs to the complainants towards financial damages and Rs.1.00 lakh towards mental agony and harassment and also to Pay Rs.50,000/- on account of litigation expenses.

Case Title: BINOD DOKANIA & ANR Vs IDBI BANK LIMITED

CONSUMER CASE NO. 2218 OF 2018

Counsel for the Complainant: Ms Anu Tyagi, Advocate

Counsel for the Opposite Party: Mr Rajive R Raj, Advocate

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