BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 26^TH DAY OF MAY 2023

ORDER

SMT. K. ANITA SHIVKUMAR, MEMBER

1. The complaint has been filed under Section 35 of C.P.Act (hereinafter referred as an Act) against the OP for the following reliefs against the OP:-

1. Direct the OP to return the original documents of title deeds pertaining to the immoveable property bearing site No.26, Sy.No.44/2, B Narayanaura Village, K.R.Puram Hobli, Bengaluru south taluk, measuring east to west 45 feet and north to south 30 feet totally measuring 1350 sq. feet.
2. Consequently direct the OP to pay a um of Rs.10,00,000/- towards hardship and mental agony suffered by the complainants.
3. Direct the OP to pay a sum of Rs.30,000/- towards cost of litigation expenses
4. To grant such other order. 

2. The case set up by the complainant in brief is as under:-

The complainant states that he is the sole and absolute owner of immovable property bearing site No. 26, in survey No 42/2, B. Narayanpura Village, K R Puram Hobli, Bengaluru south taluk, measuring East to West 45 feet and North to South 30 feet, in totally measuring 1350 Sqft, bounded on the East private property, West By Road North By Site No. 25, South By site No. 27.

3. The complainant further states that complainant purchased the same from previous owner Sri. D. Murugaiyan, represented his GPA Holder Smt. D Shanthi, register as document No. 3625/1993-94. In the office of sub registrar, K R Puram, Bengaluru dated 20/12/1993. Copy of absolute sale deed, dated 22/12/1993 and encumbrance certificate dated 03/02/1994.

4. The complainant further states initially approached the OP bank for mortgage loan for the purpose of construction of residential building for own use and occupation. After perusal of title documents and other financial status of the complainant the OP bank sanction the housing loan to the complainant by creating the security as mortgage of above said property on 21/04/1995. The OP bank issued an endorsement for received all original title deeds/ documents from the complainant at the time of mortgage by way of depositing of title deeds. The OP bank issued and endorsement of receipt of said title documents from the hands of complainant. Copies of the loan application, endorsed issued by OP for having received the original documents from the complainant.

5. The complainant further states at the time of availing the loan complainant was working in Bharat Earth Movers Ltd, Bengaluru. On the basis of salary the house loan has been sanctioned and released to the complainant. The complainant in other three occasions further two loans have been availed by the complainant from the opposite bank. It clearly reveals that the complainant is a very old consumer to the opposite party and having good track of loan accounts with OP bank. The complainant states that after retirement from his service, was not able to track the loan account in order with the intention to close loan account by paying the entire loan outstanding amount by November 2020, the complainant approached the OP bank. Accordingly, in the month of November 2020, the complainant paid entire outstanding loan amount in the loan account No. 16061701196 to the complainant bank and requested the OP to release the title document pertaining to the above property. On that aspect OP issued letter to complainant by fixing the appointment on 17/11/2022 to collect the original title deeds/ documents between 10:15 am to 11:15 am with a condition that the complainant shall bring the original ID with Xerox copy and the same latest 6 months statement of accounts to the Loan account.

6. Accordingly complainant was present before authorized officer of the OP No. 2 but OP’s are failed to return the original title deeds which was deposited at the time of availing first loan intimating the complainant by assuring to that they will refix the date to collection of original title deeds/documents at the earliest, i.e. on 17.11.2020. But OP did not return the documents on that day. The complainant further states that OP bank at the any point after closure of mortgage loan, have no right to retain the original documents/title deeds belonging to complainant – complainant has given written representation through mail on several occasions to OP but went in vain. The complainant states that due to careless and negligent attitude of OP bank the complainant is not able to sell the property or raise any loan for any other purpose by pledging the above property. After misplacement original documents/title deeds the complainant requested OP bank to provide any mortgage loan to same property. The opposite party bank refused to sanction the mortgage loan in absence of the original title deeds/documents. Hence due to careless and negligence of OP bank the complainant suffered heavy loss and suffered financially and mentally. The very negligent attitude of respondent bank is nothing but unfair trade practice and there is total departure of purpose of the bank which is against to the procedure adopted by OP bank, being the banking and finance institution which is not fair and reasonable, it exhibits the deficiency of service to its customer. Hence the OP bank has to pay the compensation for the loss suffered by the complainant not only for the mental agony and harassment given to complainant. For no fault on the part of complainant, is not in the position to transact through the original document and could not sell the property to the propective purchaser. It is all due to careless and negligent attitude of the OP. Therefore the complaint filed against the OP.

7. OP’s made their representation through its counsel, filed version, denied all the allegations of complainant. The OPs contends that the complaint is not maintainable either in law or facts. The OPs further contended that the complaint filed by the complainant involve several complicated facts which cannot be decided in the summary proceedings, for the remedy, complainant has to approach the civil court. On this ground also complaint is liable to dismiss. The OPs contended that are not aware whether the complainant is the sole and absolute owner of the alleged immovable property. The OP has further also contended that have not issued an endorsement for receipt of title documents and also not received alleged original title deeds/documents and the property is not mortgaged by way of depositing the title deeds to the OP’s as alleged by the complainant. The complainant though claims to have avail loan in the year 1995 from the OP has neither stated the loan application number or loan account number or file number produced the loan offer letter of the loan availed by the complainant in the year 1995. Further it is not clear whether the complainant has close the said loan account by paying the entire loan dues of the loan availed by the complainant in the year 1995. After considering the said loan application OP have offered loan of Rs. 5,88,000/- to the complainant subject to terms of loan offer letter dated 22/06/2004 bearing loan account No. 16061701196. The complainant has not approached for any mortgage loan alleged after repayment in 2020. The OP contended that has not caused any financial loss or mental suffering to the complainant as alleged and not indulging an unfair trade practice and deficiency of service to him. The OP’s stated that no cause of action to file the complaint against the OP’s. The cause of action pleaded, is imaginary. Hence, OP prayed to dismiss the complainant.

8. The complainant has filed his affidavit evidence, reiterated as stated in the complaint. In support of oral evidence filed 7 documents, which are marked as Ex.P1 to Ex.P7.  One S.Pavan Kumar, manager of OP filed affidavit evidence on behalf of OP’s along with three documents, are marked as Ex.R.1 to Ex.R.3.

9. Heard the arguments of advocate for the complainant & filed memo with citation.  OP’s counsel filed written arguments and citations.  Perused the materials on record.

10. The following points arise for our consideration as are:-

1. Whether the complainant proves deficiency of service on the part of OP’s?
2. Whether the complainant is entitled to get relief’s as prayed in the complaint?
3. What order?

11. Our answers to the above points are as under:

Point No.1:  Affirmative

Point No.2: Affirmative in part

Point No.3: As per final orders

REASONS

12. Point No.1 AND 2: These two points are inter related each other, for the sake of arguments and to avoid repetition we would like to discuss and answer Point No.1 and 2 together.
13. First and foremost to discuss with regard to whether the complainant is comes under the definition of Consumer or not, Complainant has availed services from OP by availing loan, for that he mortgaged the documents pertains to the property. U/S 2(7)(ii) of Consumer Protection Act 2015, Consumer has availed services from OP, is very much comes under the definition of Consumer and also this commission has jurisdiction to deal with the matter.
14.  On perusal of pleadings of both the parties. It is admitted that the complainant is the absolute owner of the immovable property bearing site No. 26, in survey No 44/2, B Narayanapura Village, K R Puram Hobli, Bengaluru south Taluk, measuring East to West 45 feet and North to South 30 feet, in totally measuring 1350 Sqft, bounded on the East private property, West By Road, North By Site No. 25, South By site No. 27. as The said property was registered in the name of complainant in the office of sub-Registerar on dated 03/12/1994 which is at Ex. P1, and encumbrance certificate on the said property stood in the name of complainant is at Ex. P2.

15. Thereafter, the complainant approached OP bank for mortgage loan for construction of residential building for his own use. After receiving the title document, financial status of the complainant the OP bank sanctioned the said loan to the complainant by creating the simple mortgage on above said property. By creating the mortgage the OP bank have issued an endorsement dated 24/04/1995 stating that OP bank have received original title deed/ documents along with other required documents which is at Ex.P7 from the complainant at the time of mortgage by way of depositing of title deeds and after which OP have sanctioned and released loan in the favour of the complainant. With regard to that Op has issued loan sanction details in the Interest Subsidy Certificate dated 04.05.1995 which is at Ex.P.3 (Page-16). As per the said documents complainant availed loan of Rs.1,40,000/- on 21.04.1995. On the said loan OP imposed interest at the rate of 15.5% for the term of 20 years, EMI was fixed for Rs.1,905/- commences from 16.06.1995 in the vide loan account No.06101757. In the very document OP even mentioned about the value of property mortgage is Rs.2,69,000/-. The above mentioned certificate issued by OP on request and on payment of Rs.710 in vide receipt No.217.

16. After perusal of Ex.P.3, the complainant already had two loan with OP bank, it also exhibits that the complainant was old customer of OP bank. By knowing this track records the OP has sanctioned loan in favour of the complainant. As per Ex.P.3 complainant again availed loan of Rs.1,90,000/- on 28.06.2001, the loan sanctioned under scheme of
    Grihasudar on the said property and policies mortgaged for the intention to renovate the house. It was for 10 years with the interest at the rate of 13.5%.
17. Complainant with the intention of close the loan account approached OP bank in month of November 2020 and paid entire outstanding loan amount in loan account baring NO. 16061701196 and after making the entire outstanding due to the OP, the complainant sought to release the title deeds/documents of the property. Considering the request of complainant, OP had issued the letter to the complainant by fixing an appointment on 17/11/2020 to collect the original title deeds with the condition that complainant has to bring original ID and latest 6 months bank statement pertaining to the bank account. But in spite of following up by the complainant, the OP’s have not released the original title deed to the complainant. Even after the receipt of the repayment amount including interest, OP did not release the documents, is unfair and unjust.
18. In spite the same, OP’s have not complied to the letter issued to the complainant dated 17.11.2020 calling upon the complainant to collect the original title deeds/documents in the account No. 16061701196 which is at Ex.P.5, when OP called complainant to appear with required documents and collect the mortgaged original documents, it is clearly contradictory to the contention of OP, where OP submitted in his version that complainant has not mortgaged original title deeds at the time of availing loan. If such being the case Op should exhibit the reason for calling them on 17.11.2020 for collecting the documents. Hence OP failed to prove his contention and OP is not revealing the fact that original documents are misplaced at his place.
19. Now the crux of the matter is to consider whether the OP is acted diligently in releasing documents. When the complainant repaid the entire loan amount respect of loan account No. 16061701196 and OP’s not disputed that entire payment made towards the said account No. 16061701196. But OP’s have not released the original title deeds/documents which were mortgaged while granting construction loan. But complainant already had two loan accounts in the OP’s bank. OP’s have not produced any cogent evidence to show that there lien to the two loans account, which was already held by complainant and also there is no document to show the OP’s have sanction the construction loan through the loan account No 16061701196, that the two loan account will have lien over the loan account No. 16061701196.
20. When complainant have made repayment of loan account and without sufficient reasons OP’s cannot withhold the original title deeds/documents of the complainant and also OP’s have utterly failed to show the evidence to prove their contention. Per contra, OP’s documents produced by complainant in Ex.P.3 & P.5 which having discrepancies and against the contention to OP. It intends that OP’s suppressed the fact that documents are lost and not in the position to release. Keeping silence and keeping complainant in the dark is not fair. Hence it is clearly exhibits loosing original documents of the property which are mortgaged by complainant, is amounts to deficiency of services on the part of OP. For that OP has to compensate him. The act of OP also amounts to dereliction of duty which obliviously cost heavy financial loss to complainant and mental stress till it is resolved.
21. With regard to the original title deed in Canfin homes Ltd V/S Bhaskaran, judgement passed by Hon’ble NCDRC observed as below.
22. “the original documents including original title deeds were deposited by the complainants in order to secure the loan and it was Op’s bounded duty to keep those important documents in safe custody and return them to the complainants on repayment of the loan The very fact that the documents are still untraceable, clearly exhibits negligent in rendering services of OP to complainants since due care was not taken to keep the documents in safe custody. The issue involved in this matter came up for consideration of this commission in State bank of India vs Amitesh Mazumdar RP No 2732 decided on 3.1.2020 and the following view was taken: Even if all the steps like issue of certificate to the complainant admitting the deposit of title deeds with finance company/bank and its inability to return the same to the complainant,  bank shall bear the cost of issuing a public notice in news papers with respect of the title deed, that would not result in the complainant realizing the true market value of the immovable property in question, if he decides to sell the same in the market. No one in the market will agree to purchase an immovable property on payment of its prevailing market value, if he knows that the original title deed of the property will not be delivered to him by seller. There will always be an apprehension of the misuse of the Title Deeds of the immovable property by an unscrupulous person, by depositing the same with a bonafide lender, since an Equitable Mortgage can be created by deposit of the Title Deeds.  The erosion in the value of the property if it is to be sold without the Title Deeds, would be substantial and in fact even the compensation awarded by the District Forum and maintained by the State Commission may not be sufficient to make up such erosion in the market value of the property.  Moreover, if the complainant decides to take a loan by deposit of the Title Deeds of the property against the property, he will not be able to get a ready lender in the market unless the Title Deeds of the property are deposited.  In fact, even a bank may be unwilling to give a loan against an immovable property unless the Title Deeds of the property are deposited with it.  Therefore, the compensation awarded by the Fora below was eminently justified on account of the petitioner bank having lost the Title Deeds of the immovable property of the complainant.”

On the above reasons the Hon’ble NCDRC upheld the judgment passed by Hon’ble said commission by dismissing the appeal.

21. The above judgement is having exactly similar facts and circumstances with present case in hand. Considering the above judgement, there was bounded duty of OP’s to handover the concerned documents to the complainants.  OP’s failed to return original title deed of complainant which were in its custody. When the financial institutions are insist for security, the original documents of a property are very much required to release the loan, it is bounded duty of finance company to keep the deposited documents in a safe custody and preserve them till it is handed over to the concerned customers after repayment of entire loan.

22. In our considered view, OP caused deficiency of service, dereliction of duty by failed to keep the important documents of property in safe custody, which caused heavy financial loss and mental agony to the complainants, for which OP is liable to compensate. Complainant has proved his case, also entitle to get compensation.

23. Considering the OP has lost the original documents pertains to the property as above mortgaged when the OP bank is inability to return the same to the complainant, bank shall bear the cost of issuing the public notice in the newspaper with respect to the title deed. If he decides to sell the same in the market, no one in the market agree to purpose an immovable property on payment of its prevailing market value, if he knows that the original title deed of the property will not be delivered to him by seller. The said lost documents towards which a apprehension to the misuse of title deed of the property by the strange people by testing the same with lenders. It directly affects to the complainant financially and he is unable to get loan from the other banks for any purpose, for no fault of complainant. In our considered view, OP is liable to bear getting duplicate documents by following the procedure with his own cost and to produce the copies to the complainant.

24. Considering the amount of loan complainant borrowed from OP’s bank to construct & renovate the house, this would mean that the value of the property cannot be less than Rs.30,00,000/-. Complainant did not mention the present value of the property and also he has not claimed according to the, Compensation of Rs.3,00,000/- may constitute 10% of market value of the property at present. Hence OP’s are liable to pay Rs.3,00,000/- towards compensation for loss of original documents which is calculated in accordance with the property market value, which meet the ends of justice. OP’s are also liable to pay Rs.30,000/- towards the deficiency of services and also to pay Rs.10,000/- towards cost of litigation to the complainant. Hence for the foregoing reasons, we answer Point No.1&2 accordingly.

25.Point No.3:- In view the discussion referred above we proceed to pass the following;

O R D E R

1. The complaint is partly allowed.

2. OP No.1&2 are jointly and severally liable to handover duplicate copies of title deed pertaining to the immovable property bearing site No.26 in survey No.44/2, B.Narayanapura Village, K.R. Puram Hobli, Bangalore South, measuring East to west – 50 feet, North to south – 30 feet, in total measuring 1,350 feet vide mortgage loan A/C No.6109757 and 61029498 within 60 days from this day.
3. OP No.1&2 are jointly and severally liable pay Rs.3,00,000/- to the complainant towards compensation for financial loss and hardship caused by the act of OP’s.
4. OP’s shall pay Rs.30,000/- towards deficiency of service and Rs.10,000/- towards cost of litigation within 60 days from this day failing which OP’s shall pay interest at the rate of 10% per annum from the date or order till realization.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 26^th day of MAY, 2023)

Documents produced by the Complainant-P.W.1 are as follows:

Documents produced by the representative of opposite party – R.W.1;