DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

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Iqbal Singh s/o Sh.Joga Singh, r/o Village – Bhagat Majra, P.O.  Rani Majra, Tehsil and District – SAS Nagar (Mohali).

…..Complainant

                                      V E R S U S

1.       State Bank of India through its Regional Manager, Regional/Head Office, Sector 17-B, Chandigarh.

2.       Branch Manager, State Bank of India, Sector 7 Branch, Madhya Marg, Chandigarh.

……Opposite Parties

QUORUM:   P.L.AHUJA                                                  PRESIDENT

                   DR.(MRS) MADANJIT KAUR SAHOTA         MEMBER

Argued by: Sh.H.S.Saini, Counsel for complainant.

                     Sh.K.S.Arya, Counsel for the OPs.

PER P.L.AHUJA, PRESIDENT

1.                Sh.Iqbal Singh, complainant has filed this consumer complaint under Section 12 of the Consumer Protection Act, 1986, against State Bank of India & Anr. - Opposite Parties (hereinafter called the OPs), alleging that he is owner in possession of the property measuring 10 Marla situated in the revenue estate of Village Bhagat Majra, Tehsil Kharar, District SAS Nagar, Mohali, as detailed in para No.2 of the complaint. In the year 2007, the complainant applied for the grant of housing loan to the tune of Rs.2 lacs under the Gram Niwas Yojana for construction of house in his plot/property with OP No.2. As per the terms and conditions of the scheme/application form, the loanee was required to submit the supporting documents including original sale deed/agreement of sale by way of security/mortgage of property for sanctioning of housing loan. A true complete copy of the application form is Annexure C-1.  After finding the complainant eligible for the housing loan as per the terms and conditions of the scheme, OP No.2 sanctioned the loan amounting to Rs.2 lacs on 28.5.2007 vide loan account No.30181074890 in favour of the complainant. Before releasing the first installment of loan, Sh.O.P.Mehra, Assistant Manager then dealing with the housing loan cases gave a form duly filled by his own handwriting to the complainant to submit the same along with original title/sale deed of the property mortgaged in favour of the bank by way of security and accordingly the complainant submitted/deposited his original title/sale deed with the said form vide registered letter No.3193 dated 29.5.2007, copy of which is Annexure C-2. Thereafter, OP No.2 released the loan amount in two equal installments of Rs.1 lac each. The complainant repaid the loan amount as per the monthly installments and ultimately the entire loan amount along with interest in lump sum was repaid by the complainant upto October, 2011 without any default. OP No.2 also issued No Due Certificate on 22.11.2011, copy of which is Annexure C-3.  The complainant requested OP No.2 to release his original title/sale deed and return the same to him immediately but the same was not returned, despite repeated requests. Ultimately, the complainant submitted a written request dated 2.4.2012, copy of which is Annexure C-4. Then a reminder was sent on 3.5.2012, copy of which is Annexure C-5. OP No.2 vide its communication dated 11.5.2012, copy of which is Annexure C-6 turned down the request of the complainant by saying that there was neither any mention of equitable mortgage of property in the loan application nor the complainant submitted the conveyance deed to the bank, therefore, it was unable to return the same. The complainant again sent a letter dated 31.5.2012 – Annexure C-7 to OP No.2. The complainant has contended that he had deposited his original title/sale deed with the OPs in a good faith and trust and by not returning his original title deed, the OPs bank have not only breached the trust of the complainant but has also cheated him. The complainant has alleged deficiency in rendering services on the part of OPs. He has made a prayer for a direction to the OPs to return the original sale/title deed of the property, apart from granting compensation and litigation expenses.

2.                OPs No.1 and 2 in their written statement have pleaded that the complainant approached them for a housing loan to the tune of Rs.2 lacs and the loan was sanctioned and granted under certain terms and conditions but without equitable mortgage of any of the property taking into due consideration the regular Government job of the complainant, having salary account with OPs bank and availing a very small loan.  It has been averred that the property in question was not mortgaged with the OPs bank towards collateral security. The Memorandum of Term Loan Agreement for housing loan granted under Gram Niwas Yojana was executed by the complainant after understanding and knowing fully well all the terms and conditions mentioned therein. It has been stated that none of the documents carry any details/recording of creating the equitable mortgage. It has been further stated that the land in question is Village land and the complainant offered to deposit the copy of Jamabandi/Intekal only. The letter sent through the registered post regarding the deposit of the title deed was sent with a postal stamp of Rs.19.50, which is insufficient against the actual weight of the document and furthermore the same is an inland letter. It has been further stated that on receipt of letters from the complainant the things were verified and the complainant was apprised accordingly.

3.                In his rejoinder, the complainant has pleaded that in case he did not deposit the original title deed with OPs bank then why Mr.O.P.Mehra, Branch Manager had handed over the confirmation letter (C-2) duly filled by him to the complainant, which is virtually a confirmation letter of depositing the title deed with the bank and the complainant was asked to send the same through registered post. It has been further pleaded that before filing the written reply the bank officials tried to settle the matter personally and visited the house of the complainant and got 4 dates for filing of the reply. It has been averred that in the absence of original title deed by the complainant, the loan could not have been granted to the complainant in breach of terms and conditions of the scheme. 

4.                The parties led evidence in support of their contentions.

5.                We have gone through the entire evidence and heard the arguments addressed by the learned Counsel for the parties.

6.                Pertinently the copy of Application cum Documents – Annexure C-1 for obtaining loan under Gram Niwas Yojana produced by the complainant contains the blank performae. On the other hand, OPs have produced a copy of duly filled in application form by the complainant with written statement, copy of which is Exbt. R-1. The copy of the loan application produced by the OPs shows that the complainant applied for housing loan for constructing a house on his property measuring 10 Marlas at Village Bhagat Majra, P.O. Rani Majra, Tehsil Kharar, District Mohali. On the basis of his request, a term loan of Rs.2 lacs was sanctioned in his favour on 28.5.2007 by OP No.2. A Memorandum of Term Loan Agreement – Annexure R-3 was also executed. The complainant repaid the entire loan amount as per statement of account – Annexure R-7. OP No.2 also issued a No Due Certificate – Annexure C-3 in favour of the complainant on 22.11.2011.

7.                The only material question that survives for determination in this case is whether the complainant had submitted the original title/sale deed of his property to OP No.2 by way of security/mortgage of property for sanctioning of housing loan. According to OPs as mentioned in the letter dated 11.5.2012 – Annexure C-6 there is neither any mention of equitable mortgage of property in the loan application nor any recital for the same and as per bank’s record, the complainant had not submitted the conveyance deed to the bank, accordingly they are unable to return the same. It has also been contended by the learned Counsel for the OPs during arguments that the loan was granted to the complainant without equitable mortgage of his property taking into consideration his regular Government job, salary account with the OPs bank and availing of a very small loan.

8.                After going through the evidence on record, we are not impressed with this contention that the complainant had not submitted the title/sale deed of his property to OP No.2 with an intention of creating an equitable mortgage of the said property. A bare perusal of the housing loan application shows that following documents were required for granting the loan :-

“Sale deed/Agreement of sale

Copy of approved drawings of proposed construction/purchase/extension.

NOC under the provisions of ULC Act, 1976. Original of the same.

(Not applicable for Rural and Semi urban areas)

Detailed cost Estimate/Valuation Report from Chartered Engineer/Architect.

In case of conversion of agricultural land for non-agricultural purposes, copy of the relative order.

Non Encumbrance Certificate for 13 years.

Salary Certificate and Form 16 of previous year (in case of employees).

IT Returns for the last 2 years (if IT assessee) duly accepted by the ITO.

Allotment letter of Co-operative Society/Housing Board (if applicable), in original.

NOC from society/builder as per enclosed Annexure.

Proof of residence (Identity Card/Passport/Voter Identification Card/Driving Licence).

Tax receipts etc. (Advance IT/Property Tax/Municipal Tax, etc.)

Others”

Significantly there are tick marks on the documents such as sale deed/agreement of sale, copy of approved drawings of proposed construction/purchase/extension, NOC under the provisions of ULC Act, 1976 and detailed cost estimate/valuation report from Chartered Engineer/Architect in the copy of application form Exhibit  R-1. There is no tick mark on any of the remaining items in the application form. There is a declaration below the column of ‘Documents Required’ by Sh.Iqbal Singh, complainant in accordance with which, particulars and information furnished in the application form were true, accurate and complete. Furthermore, as per term and conditions 2(k) of Memorandum of Term Loan Agreement – Annexure R-3, it was agreed as under :-

“I/We shall create an equitable mortgage of land/house/flat purchased by me/us out of the amount of the said loan in favour of the Bank and shall execute/cause to be executed such documents as may be required by the Bank.  Where creation of equitable mortgage is not possible, I/we shall create a legal mortgage by execution and registration of proper Deed of Mortgage, of all my rights, title and interest in the flat/house/land purchased by me/us in such form as may be approved by the Bank. I/We shall, if required by the Bank, give such further security as acceptable to the Bank forthwith on demand by the Bank. In case it is not possible to create security by way of mortgage as aforesaid I/we shall forthwith on demand arrange for other collateral securities by way of pledge such as insurance policies, promissory notes issued by the Govt., shares or debentures of the companies, sufficient quality of gold or gold ornaments or other articles or things acceptable to the Bank as security for the loan.”

In the instant case though, it has been mentioned in the written statement of OPs that equitable mortgage was not obtained in this case having regard to the regular Government job of the complainant and also on account of having salary account with OPs bank and availing a very small loan, yet there is no such mention in the Memorandum of Term Loan Agreement or any other document, which could show that the condition of equitable mortgage in case of the complainant was waived/exempted. Apart from it, the complainant has produced a copy of the letter dated 28.5.2007 – Annexure C-2 sent by him to OP No.2 through registered post, copy of the postal receipt is at page No.31 of the file, which shows that the complainant had deposited with OP No.2 on 28.5.2007 the title deed relating to his property situated at Bhagat Majra, Village Kharar, Taluk Mohali against the total loan of Rs.2 lacs. It is also confirmed in para No.3 of the said letter that benefit to the bank of the mortgage by deposit of title deeds relating to the said property credited, above also shall apply/stand extended to cover the enhanced aggregate limit of Rs.2 lacs granted to him by the bank. It is true that this letter is an inland letter sent with postal stamp of Rs.19.50 only and the title deed could not be sent with this letter. However, according to the case of the complainant, Sh.O.P.Mehra, Assistant Manager then dealing with the housing loan cases gave this form duly filled by his own handwriting to him to submit the same along with original title/sale deed of the property mortgaged in favour of the bank by way of security. It is quite probable that the original title/sale deed of the property was given to the bank authorities by hand by the complainant. Though Mr.O.P.Mehra, Chief Manager has filed an affidavit in support of the averments in the written statement of the OPs, yet he has not specifically denied that he did not fill up the form in his own handwriting. Even if, it is assumed that the alleged title deed was not received by OP No.2 then it is not understandable as to why OP No.2 did not inform the complainant after receipt of the letter dated 28.5.2007 that it had not received the title/sale deed and the same was not required in the case of the complainant, who was having regular Government job having salary account with bank and availing a very small loan. It is also important to note that after obtaining the No Due Certificate dated 22.11.2011 – Annexure C-3, the complainant sent a letter by speed post to the OPs on 2.4.2012 – Annexure C-4, whereby, it was told that the title deed of his property was still lying in the bank and the same be released and handed over to him. OPs did not give any reply to that letter that the title deed was not submitted with them at the time of sanctioning of the loan. The complainant again sent a reminder – Annexure C-5 on 3.5.2012 through speed post and then on 11.5.2012 vide Annexure C-6, it was replied that there was no mention of equitable mortgage of property in the loan application nor there was recital for the same and the complainant had not submitted the conveyance deed to the bank and the bank was unable to return the same. It is also worth noting that after this complaint was filed before this Forum, the learned Counsel for OPs put in appearance on 3.10.2012 but reply and evidence were filed only on 16.11.2012 after a cost of Rs.300/- was imposed on 18.10.2012 and Rs.500/- was imposed on 1.11.2012 on the OPs. The OPs could have taken this plea on the very first date of appearance before this Forum that the original sale deed/title deed of the property of the complainant was not obtained at the time of sanctioning of loan. The complainant has specifically stated in the rejoinder that Mr.O.P.Mehra, the then Branch Manager approached him personally at his home on 13.11.2012 at about 9.00 AM to settle the dispute and he admitted that bank had lost the original title deed and he failed to mention in the loan performa/bank records regarding execution of mortgage deed/depositing of original title deed inadvertently. After weighing the evidence of both the sides, we feel that the title deed/sale deed of the property was deposited with OP No.2 bank at the time of sanctioning of the loan but the same was not returned to the complainant after repayment of the loan. The contention of the OPs in their written statement that the land in question was village land and the complainant offered to deposit the copy of Jamabandi/Intekal only cannot be accepted. The copy of Jamabandi/Intekal – Annexure R-6 produced by the OPs simply shows one Gurmukh Singh son of Aasa Singh to be the owner of the land measuring 10 Marlas in Village Bhagat Majra and vide mutation No.920 the same was mutated in favour of Mr.Iqbal son of Joga. Though presumption of truth is attached to the entry in the copy of Jamabandi, yet it is the sale/title deed, which can prove the ownership of the complainant. Consequently, we are of the opinion that the complainant, who had submitted the original title deed of his property with OP No.2 was entitled to get back the same after repayment of the loan but the same was not returned and this action on the part of OPs amounts to deficiency in service.

9.                For the reasons recorded above, we find merit in the complaint and the same is allowed. OPs are directed :-

i)                 To return the original sale/title deed of the property of the complainant to him, failing which, to grant a compensation to the tune of Rs.50,000/- to him.     

ii)                To make payment of a composite amount of Rs.11,000/- to the complainant towards compensation for harassment and litigation expenses.

10.              This order be complied with by the OPs within one month from the date of receipt of its certified copy, failing which, OPs shall be liable to refund the awarded amount to the complainant along with interest @ 9% p.a. from the date of filing of the complaint, till its realization.

11.              The certified copies of this order be sent to the parties free of charge. The file be consigned.