15 July 2024


National Consumer Disputes Redressal Commission

Secretary/Manager, Mayyanad Regional Co-Operative Bank v. Ebrahimkutty




Bank is Liable to Pay Compensation, if the Original Title Deed had been Lost

Instant first appeal has been filed against the impugned order passed by Kerala State Consumer Disputes Redressal Commission vide which, Consumer Complaint No. C-05/13, filed by present Respondent, was allowed and Appellant/opposite party (OP) was directed to return the original sale deed number 1959/92 to complainant within one month, failing which to provide compensation of 10 lakh with interest @ 12% p.a. from the date of petition till realisation.

In facts of case, complainant/respondent availed a loan from Appellant, by mortgaging his property. Complainant repaid his loan, but OP Bank did not return the original title deed. It has been stated that the Bank orally informed him in the year 1999 that the original deed was missing, and the OP Bank was on search to recover the same. Complainant stated that, property was valued at about Rs. 75 lakhs and due to lack of original document, complainant was unable to sell property to the third parties. Alleging deficiency in service on part of the OP Bank, consumer complaint was filed, seeking compensation from OP for deficiency in service/unfair trade practices etc.

Affidavit executed on 31st October, 2013 establishes beyond doubt that, Bank has always been taking the position that, document has been 'misplaced' and not 'lost'. In consumer complaint itself, complainant took the plea that, when loan was closed finally on 8th September, 2012, he was informed by OP that document of title deed had been lost.

In case, Bank takes stand that document had been 'misplaced', there shall still be a possibility that, document could be recovered at a later stage and returned to complainant. However, if Bank had intimated to the complainant that, documents had been "lost", cause of action would have started from date of receiving said intimation. In present case, therefore, it is established beyond doubt that since Bank has been taking the stand that, document was 'misplaced', cause of action had not accrued to complainant all these years, and hence, complaint filed by them cannot be stated to be beyond limitation in terms of Section 24A of Consumer Protection Act, 1986.

Facts of case make it clear that, cause of action would have accrued form date of intimation of loss of document to complainant. OP/appellant allowed the complainant to avail himself of loans from time to time all these years, even in the event of title deed having been misplaced/lost. However, this does not mean that other financing institutions shall also extend the loan facility to the complainant in the absence of title deed. It is made out, therefore, that, complainant did suffer due to loss of title deeds. Deficiency in service on part of the Bank is clearly established, because title deed under their custody got lost.

In Bank of India vs. Mustafa Ibrahim Nadiadwala and Indian Overseas Bank, Hyderabad vs. K. Bal Reddy & Ors., it was held that Bank was liable to pay compensation to the complainant, because value of property was bound to be affected, if original title deed had been lost. However, compensation of Rs. 10 lakh alongwith interest @ 12% p.a. allowed by State Commission is on the higher side. In view of orders passed by this Commission in, "Bank of India vs. Mustafa Ibrahim Nadiadwala", and "LIC Housing Finance Company Ltd. vs. Rajeev Kumar Jain", OP/appellant shall be liable to pay a sum of Rs. 5 lakh to the complainant for the loss of title deed alongwith Rs. 10,000/- as cost of litigation.

Tags : Compensation Entitlement Limitation

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