JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)

1.      The complainant No.1 in this case namely K. Bal Reddy availed loan from the petitioner-bank by mortgaging house No.8-4-17/34 which belong to her wife complainant No.2-K. Vasundhara. The title deed of the aforesaid property was deposited with the bank by way of an equitable mortgage. The entire loan taken by the complainant No.1 stood paid by April 2009. However, the original sale deed of the property which had been deposited with the bank was not returned on the ground that the same was not traceable. The complainants served a legal notice on the petitioner-bank requiring it to return the original title deed. However, the bank did not return the said title deed despite receipt of the legal notice. As a result the complainants approached the concerned District Forum seeking direction to the bank to return the original sale deed as well as damages amounting to Rs.3,00,000/-.

2.      The complaint was resisted by the petitioner-bank inter alia on the ground that in the shifting of the concerned branch the original title deed of the property got mixed with some other document and later could not be traced. The bank expressed its willingness to issue a certificate stating therein that the original title deed has been misplaced in their custody.

3.      The District Forum vide its order dated 12-02-2013 issued the following directions:

(i)      the opposite party shall pay the complainant a sum of Rs.6,26,520/- (20% of the value of the property house assessed by the Registration and Stamps Dept., Govt. of AP),

(ii)      the opposite party shall pay a sum of Rs.1,00,000/- towards compensation to the complainant for mental agony and trauma suffered by the complainants,

(iii)     the opposite party shall issue a certificate stating that the original title deed bearing No.5638/1981 dated 10/9/1981 bearing Municipal No.8-4-17/34 situated at Kranthi Nagar, Karmanghat village, Saroornagar Mandal, Ranga Reddy District, was lost while in their custody and hence are unable to return the same to the complainants,

(iv)    the opposite party shall issue a paper publication to the effect that the original title deed bearing No.5638/1981 dated 10/9/1981 of the complainants was lost while in their custody, in a newspaper that is widely circulated in the locality where the said house property is situated at Kranthi Nagar, Karmanghat Village, Saroornagar Mandal, Ranga Reddy District and

(v)     the opposite party shall pay a sum of Rs.2,000/- towards costs.

4.      Being aggrieved from the order of the District Forum the petitioner-bank approached the concerned State Commission by way of an appeal. The State Commission reduced the quantum of compensation from Rs.6,26,520/- to Rs.3,00,000/-. However, despite the aforesaid deduction in the quantum of compensation the petitioner-bank is not satisfied and is before us by way of this revision petition.

5.      It is an admitted position that the title deed of the property which had been mortgaged with the bank, was deposited by the borrower with the bank. It is also not in dispute that the said title deed has not been returned to the borrower despite the loan having been fully paid by April 2009. The plea taken by the petitioner-bank is that the title deed had got mixed with other documents during the shifting of the branch where the said title deed was deposited. Even today, the bank is not in a position to return the title deed to the complainants. In case the title deed had got mixed with other documents, it would have been possible for the bank to trace the same within a reasonable period after the complainant had sought return of the said deed. It is a very sorry state of affairs that the bank has lost and has not been able to trace an all important document such as a title deed of an immovable property in last more than five years. The title deeds of immovable property are required to be kept by a bank in safe custody and ordinarily there would be no occasion for mixing up of such a valuable document with other documents of the bank. The petitioner-bank has not explained who was the officer having custody of the title deed, what explanation he gave for loss of the documents and what action the bank has taken against him. Obviously, the bank seems to be interested only in hiding the negligence of its officer, instead of holding an inquiry and identifying the officer/official responsible for the loss of the document and taking appropriate disciplinary action against him.

6.      In our view, it cannot be said that loss of original title deed would not lead to an erosion in the value of the property. A peson seeking to buy an immovable property would certainly like to have the original title deed with him at the time of purchase. Even if someone is willing to purchase an immovable property without original title deed, he in our opinion would never pay the correct prevailing market value of the property which he is purchasing.  He will always be apprehensive that someone may or may have mortgaged the property by deposit of title deeds. Therefore, in our view, loss of title deed by the bank would inevitably result in substantial erosion in the resale value of the property subject matter of the deed. Moreover, in case the owner of the property wants to raise some loan by mortgaging the said property, the lender may not accept the mortgage without the title deed of the property is not available with the person seeking to raise loan against that property. The banks normally insist on creation of equitable mortgage in their favour by deposit of title deed and, therefore, any bank if approached for grant of loan, etc., against security of an immovable property, would be unwilling to extend loan without deposit of the title deed of the property in question.

7.      The learned counsel for the petitioner has drawn our attention to the observation made by this Commission in C.L. Khanna Vs. Dena Bank, IV (2005) CPJ 137 (NC):

          “In our view, it would not be difficult to sell the property in a case of loss of registered gift deed if proper advertisement is given by the Bank that the original gift deed is lost by the Bank and that the property is free from any encumbrances. It cannot be held that the value of the property would be reduced by 35% in case of loss of title deed. Hence, it would not be proper to award compensation as claimed by the complainant.”

8.      The Commission did not say that there will be no diminition at all in the resale value of an immovable property, if the title documents are not available, though it did not accept that the value would be reduced to the extent of 35%. Moreover, in our opinion, the aforesaid observation made by this Commission does not constitute a legally binding precedent since it is only obiter observation and no legal proposition was laid down by this Commission with respect to the issue involved in this petition. Moreover, we also find that in the case being relied upon by the learned counsel for the petitioner the Commission had instead of dismissing the complaint awarded compensation to the extent of Rs.1,00,000/- on account of deficiency in services provided by Dena Bank.

9.      Coming to the quantum of compensation, in our view the State Commission has been quite indulgent in reducing the compensation awarded to the complainants. Considering the likely erosion in the resale value, on account of the loss of the title deed the compensation awarded by the State Commission cannot at all be said to be on higher side. If anything, in our opinion, is on the lower side.

10.    For the reasons stated hereinabove, we find no merit in the revision petition and the same is hereby dismissed with cost assessed at Rs.25,000/- to be deposited with the Consumer Legal Aid A/c-NCDRC.