Versus
- HDB Financial Services Limited through its Directors/Authorized Officer, 3rd and 4th Floor, Hemalatha Mansion, 7-1-397/111 & 112, S R Nagar, Hyderabad-500038, Telegana.
- HDB Financial Services Limited through its Directors/Authorized Officer, Plot No.384, First Floor, DVD Tower, Near Petrol Pump, R.K. Road, Cheema Chowk, Ludhiana-142030.
- HDB Financial Services Limited through its Directors/Authorized Officer, Kunal Tower, 4th Floor, The Mall, Mall Road, Ludhiana-141027. …..Opposite parties
Complaint Under Section 34 & 35 of Consumer Protection Act, 2019 as amended up to date.
QUORUM:
SH. SANJEEV BATRA, PRESIDENT
MS. MONIKA BHAGAT, MEMBER
COUNSEL FOR THE PARTIES:
For complainant : Sh. Nipun Gupta, Advocate
For OPs : Sh. Rahul Rajput, Advocate.
ORDER
PER SANJEEV BATRA, PRESIDENT
1. Shorn of unnecessary details, the facts of the case are that on 28.04.2012, the complainant took loan of Rs.32,00,000/- by mortgaging his property/House No.B-20-2775, Gurdev Nagar, Ludhiana with the OPs vide loan account No.242511. The complainant stated that due to negligence of the OPs, he could not pay installments of the loan due to which his account was declared as NPA and proceedings under SARFAESI Act were started against him. Even a complaint U/s.138 of the Negotiable Instrument Act, 1881 was filed against him and other proceedings were also initiated against him. As such, due to compelling circumstances, the complainant settled the loan account with the OPs vide settlement letter dated 17.01.2022 and the OPs withdrew all the pending cases against him. At the time of taking loan, the complainant submitted documents with the OPs, which are reproduced as under:-
(a) Sale deed Wasika No.26288 dated 15.01.1990 in favour of father of the complainant.
(b) Will Wasika No.1487 dated 16.12.1998 in favour of Sanjeev Kumar.
(c) GPA Wasika No.3759 dated 03.08.1989 in favour of Randir Kalra.
(d) Public Notice in Ludhiana Ajit and Hindustan Times dated 28.12.2010.
(e) Death Certificate of Pishori Lal.
(f) Latest 13 years Jamabandis.
(g) Latest NEC.
(h) Affidavit confirming that property is free from all Liens and Encumbrances.
(i) Will dated 02.08.1989 in favour of Pishori Lal.
(j) Agreement to sell in favour of Pishori Lal.
The complainant further stated that at the time of taking loan and its settlement, the OPs assured to return all the original documents to him, which they were bound to return in original to him. After return of the loan, the complainant approached and requested the OPs to return the loan property original papers/documents/title deeds but the OPs insulted the complainant and threatened him with dire consequences. Even the complainant served a legal notice dated 05.02.2022 to the OPs, which was replied by the OPs on 10.02.2022 stating that the said documents were kept with their storage vendor and inspite of best efforts, they are unable to trace the said documents. The complainant claimed to have suffered huge financial loss, mental tension, trauma etc. due to negligent act on the part of the OPs for which they are liable to pay compensation to the complainant. In the end, the complainant prayed for issuing directions to the OPs to pay compensation of Rs.25 Lakh along with litigation expenses of Rs.50,000/-.
2. Upon notice, the OPs appeared and filed joint written statement and by taking preliminary objections, assailed the complaint on the grounds of maintainability; the complaint being false, frivolous and vexatious; the complainant has not approached with clean hands; suppression of material facts; lack of cause of action etc. The OPs stated that at the time of taking loan, the complainant deposited the documents mentioned in para no.3 of the complaint and for keeping the same in safe custody, the documents were sent to Hyderabad office at 3rd and 4th Floor, Hemalatha Mansion, 7/-397/111 & 112, SR Nagar, Hyderabad-Telangana. After closure of loan account, they approached through Email the concerned department for retrieval of the documents of the complainant, then it transpired that due to the shifting of office from Pujagutta to S.R. Nagar, the documents of the complainants were misplaced/lost by them. However, after coming to know this fact, the authorized representative of the OPs submitted a letter dated 23.04.2022 to the concerned SHO immediately. The OPs issued a public notice in the newspaper regarding loss/misplace of the original documents of the complainant. However, the Ops undertook that as and when the documents will be traced out then same will be handed over to the complainant.
On merits, the OPs reiterated the crux of averments made in factual submission. The OPs have denied that there is any deficiency of service and have also prayed for dismissal of the complaint.
3. In evidence, the complainant tendered his affidavit as Ex. CA and reiterated the averments of the complaint. The complainant also placed on record documents i.e. Ex. C1 is the copy of Aadhar Card of the complainant, Ex. 2 is the copy of letter of loan account, Ex C3 is the copy of possession notice, Ex. C4 is the copy of settlement offer, Ex. C5 is the copy of repayment receipt, Ex. C6 is the copy of legal notice, Ex. C7 and Ex. C8 are the postal receipts, Ex. C9 is the copy of letter dated 10.02.2022 of the OPs and closed the evidence.
4. On the other hand, the counsel for the OPs tendered affidavit Ex RA of Sh. Amrish Sharma, Legal Officer of the OPs at Ludhiana along with documents i.e. Ex. R1 is the copy of Authority letter, Ex. R2 is the copy of letter dated 23.04.2022 written to police, Ex R3 is the copy of public notice in newspaper and closed the evidence.
5. We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents as well as written statement, affidavit and documents produced on record by both parties.
6. OP1 is a Non-Banking Financial Company (NBFC) and is a Regulated Entity and OP2 and OP3 are its branches and they are governed by guidelines of Reserve Bank of India issued from time to time.
The OPs, though reluctantly, conceded that they are unable to trace the documents submitted by the complainant as collateral security at the time of availing the loan and further sought time to make all the available endeavors permissible under law to reproduce the aforesaid documents vide letter dated 10.02.2022 Ex. C9. The relevant part of said letter Ex. C9 is reproduced as under:-
“The original property documents of the said property had been kept with our storage vendor. However, we regret to inform you that, in spite of the best efforts, we are unable to trace the below document of above property.
- Sale deed wasika no.26288 dated 15.01.1990 in fav of Pishori Lal-ORG.
- Will wasika No.1487 dated 16.12.1998 in fav of Sanjeev Kumar-Org.
- GPA wasika No.3759 dated 0.08.1989 in fav of Randhir Kalra-Org.
- Public notice in “Ludhiana Ajit” & “Hindustan Times” dated 28.12.2010-ORG
- Death certificate of Pishori Lal-Copy.
- Latest 13 years Jamabandi-ORG.
- Latest NEC-ORG.
- Affidavit confirming that property is free from liens & encumbrances-ORG.
- Will dated 02.08.1989 in fav of Pishori Lal-ORG.
- Agreement to sell in fav of Pishori Lal Dua-ORG.”
Please note that HDBFS is taking all available endeavors to reproduce the above document with establish due process. Hence you are request to kindly you to bear with us.
Inconvenience cause to you is highly regretted and HDBFSL assures you all support in this circumstances.”
Thereafter, the public notices were issued in newspapers “Ludhiana Ajit” and “Hindustan Times” (Ex. R3) on 28.12.2010 intimating the general public at large regarding loss/misplacement of aforesaid documents. An intimation qua the purported loss/misplacement was also sent to SHO, SR Nagar, Hyderabad (Ex. R2), but no FIR was ever registered. The OPs had indulged in paper transactions but no concrete steps were taken to assess the loss of the complainant or to indemnify the same despite being fully aware that the documents have been lost from its custody due to negligence of its officials. The loss of documents/title deeds adversely affects the market value of the property involved and also inhibits the negotiability of the instrument/document. Further the complainant is likely to face hardships in case these documents are intended to be kept as collateral security in some loan transaction.
The Hon’ble National Consumer Disputes Redressal Commission, New Delhi in cases titled as Pooja Pincha & Anr. Vs State Bank of India IV(2016) CPJ 28 (NC) has observed as under:-
“The Loss of documents of ownership is not venial and trivial matter, the wearer knows where the shoe pinched and the Bank is terribly remiss in discharge of its duties.
2. In Citi Bank & Ors. Vs Ramesh Kalyan Durg & Ors. MANU/CF/0180/2016,
The complainant would be compensated, publication cost shall be borne by the bank and the bank will get certified copies of all documents at its cost apart from suitably compensating and indemnifying the complainant if he suffers in the future due to the loss of the documents.
3. Bank of India Vs Mustafa Ibrahim Nadiadwala, MANU/CF/0809/2016
The bank is liable to pay compensation to the complainant because the value of the property is bound to be affected if the original title deed is lost by the bank.”
7. Now the next question arises for consideration that how much compensation is to be awarded to the complainant?
8. The Reserve Bank of India vide notification dated 13.09.2023 postulated detailed guidelines to redress the grievances of the borrowers. The extract of said notification dated 13.09.2023 is reproduced as under:-
“Responsible Lending Conduct – Release of Movable/ Immovable Property Documents on Repayment/Settlement of Personal Loans
In terms of the guidelines on Fair Practices Code issued to various Regulated Entities (REs) since 2003, REs are required to release all movable/immovable property documents upon receiving full repayment and closure of loan account. However, it has been observed that the REs follow divergent practices in release of such movable/immovable property documents leading to customer grievances and disputes. To address the issues faced by the borrowers and towards promoting responsible lending conduct among the REs, the following Directions are being issued:
Release of Movable/Immovable Property Documents
2. The REs shall release all the original movable/immovable property documents and remove charges registered with any registry within a period of 30 days after full repayment/settlement of the loan account.
3. The borrower shall be given the option of collecting the original movable /immovable property documents either from the banking outlet/branch where the loan account was serviced or any other office of the RE where the documents are available, as per her/his preference.
4. The timeline and place of return of original movable/ immovable property documents will be mentioned in the loan sanction letters issued on or after the effective date.
5. In order to address the contingent event of demise of the sole borrower or joint
borrowers, the REs shall have a well laid out procedure for return of original movable/immovable property documents to the legal heirs. Such procedure shall be displayed on the website of the REs along with other similar policies and procedures for customer information.
Compensation for delay in release of Movable/Immovable Property Documents
6. In case of delay in releasing of original movable/immovable property documents or failing to file charge satisfaction form with relevant registry beyond 30 days after full repayment/settlement of loan, the RE shall communicate to the borrower reasons for such delay. In case where the delay is attributable to the RE, it shall compensate the borrower at the rate of ₹5,000/- for each day of delay.
7. In case of loss/damage to original movable/immovable property documents, either in part or in full, the REs shall assist the borrower in obtaining duplicate/certified copies of the movable/immovable property documents and shall bear the associated costs, in addition to paying compensation as indicated at paragraph 6 above. However, in such cases, an additional time of 30 days will be available to the REs to complete this procedure and the delayed period penalty will be calculated thereafter (i.e., after a total period of 60 days).
8. The compensation provided under these directions shall be without prejudice to the rights of a borrower to get any other compensation as per any applicable law.
Applicability
9. These Directions shall be applicable to all cases where release of original movable/immovable property documents falls due on or after December 1, 2023.
10. The above Directions are issued under sections 21, 35A and 56 of the Banking Regulation Act, 1949, sections 45JA and 45L of the Reserve Bank of India Act, 1934, and section 30A of the National Housing Bank Act, 1987.”
9. Although these guidelines are applicable prospectively w.e.f. December 1, 2023 to the cases where the release of original moveable/immovable property document would fall due on or after 01.12.2023 but still these guidelines make it clear that a hefty sum of compensation of Rs.5,000/- for each day of delay has been provided in case loss of title documents is attributable to the bank/Regulated Entities (REs).
10. In case title Manoj Madhusudhanan Vs ICICI Bank Ltd. & Anr decided by the Hon’ble National Consumer Disputes Redressal Commission vide its order dated 31.08.2023, in para No.14 has held as under:-
“14. As regards the compensation sought by the complainant is concerned, it is manifest that the property was mortgaged for a sum of Rs.1,95,25,825/- on 22.04.2016 to opposite party 1. Even if some appreciation of value is considered, it would not be of the order of Rs.5,00,00,000/- given the short duration of time between the mortgage date and the filing of the complaint. This claim is, therefore, evidently inflated. The damages of Rs.2,50,00,000/- claimed by the opposite party 1 from opposite party 2 appears to be more realistic…..”
As such, in view of the above said facts and circumstances, this Commission is of the view that it would be just and appropriate if an amount of Rs.5,00,000/- is awarded to the complainant for the loss of documents mentioned in letter Ex. C9. The OPs are further directed to lodge FIR/DDR with regard to loss/misplacement of documents and they are also directed to issue a certificate to the complainant acknowledging the loss of the documents by them.
11. As a result of above discussion, the complaint is partly allowed with direction to the OPs to pay a composite compensation of Rs.5,00,000/- (Rupees Five Lakh only) to the complainant for the loss of documents mentioned in letter Ex. C9, within 30 days from the date of receipt of copy of order, failing which the OPs shall pay interest @8% P.A. on the said amount from the date of order till its actual payment. The OPs are further directed to lodge FIR/DDR with regard to loss/misplacement of documents and they are also directed to issue a certificate to the complainant acknowledging the loss of the documents by them. Liability of the OPs shall be joint and several. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.
12. Due to huge pendency of cases, the complaint could not be decided within statutory period.
(Monika Bhagat) (Sanjeev Batra) Member President
Announced in Open Commission.
Dated:05.11.2024.
Gobind Ram.
