Date of Filing:25/10/2019

Date of Order:10/12/2020

BEFORE THE BANGALORE I ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION SHANTHINAGAR BANGALORE - 27.

Dated: 10^TH DAY OF DECEMBER 2020

PRESENT

SRI.H.R. SRINIVAS, B.Sc., LL.B. Retd. Prl. District & Sessions Judge and PRESIDENT

MRS.SHARAVATHI S.M., B.A., LL.B., MEMBER

COMPLAINT NO.1673/2019

Vs

6698606.  
51. MRS.SHARAVATHI, MEMBER

1.      This is the Complaint filed by the Complainant u/s 12 of Consumer Protection Act 1986, against the Opposite Party (herein referred in short as O.P) alleging the deficiency in service in not returning the original title deeds which he had deposited with the OP Bank and direct the OP to pay Compensation of Rs.10,00,000/- towards the loss of original title deeds.  A sum of Rs.1,00,000/- towards compensation for causing mental agony, pain and suffering and for other reliefs as the Commission deems fit.

2.      The brief facts of the Complaint are that:

The Complainant obtained Home loan Rs.15,00,000/- under the Loan A/c No.0694675100006415, by pledging his property bearing No-899, N-MIG-B, Ground Floor, Yelahanka New Town, Bangalore, in favour of the OP bank by depositing title deeds/documents. Afterwards the Complainant was repaying the loan amount regularly by way of instalments. The Complainant wanted to sell the said property for Rs.23,63,000/- and entered into an Agreement of Sale dated 20/03/2019.By getting advance, the Complainant cleared all dues to OP bank and requested OP bank to close the housing loan account number 0694675100000415. The Complainant was to hand over originals to the purchaser as per the agreement of sale dated.20-03-2019 at the time of executing and registered the Sale Deed. OP issued letter dated 03-06-2019 informing that the Complainant’s loan account is closed. OP issued another letter dated 12-06-2019 that the original documents has been destroyed in a Fire accident on 11^th December 2017. OP did not inform the same until repayment of the entire loan amount, about the fire accident and destruction of his original documents. OP did not take proper care of the security of his documents. He failed to provide the original documents due to OP negligence. Purchaser has reduced the consideration amount from the original agreed amount and has been forced to agree for reduced consideration by Rs.8,65,000/-. The Complainant suffered both mentally and financially and lost value of his property.

3. Complainant issued legal notice dated 29-06-2019 to the OP demanding his original title deeds failing which for compensation of Rs.15,00,000/-.  After receipt of the notice OP did not bother to return original title deed nor paid any compensation for the loss whereas sent a reply admitting the receipt of the original title deed/documents mentioned above and also admitted fire accident and agreed to bear the cost of getting the copies of the said documents and publishing in the newspaper and providing certificate in that respect. The act of OP has caused immense loss to him for which OP is bound to pay compensation. This situation resulted due to sheer negligence and deficiency in service of OP. Hence the complaint.
4. Upon the service of notice OP appeared before this Commission and filed its version contending that, the Complainant by depositing the 13 title deed/title documents obtained the loan and the same was stored with their custodian i.e., Stock Holding Corporation of India, with an intention to ensure its safe custody and also to return the documents to the parties immediately upon closer of loans without any Complaint and grievance from any of its customers. The OP despite taking sufficient precautions to keep the title deeds in a fire proof and strong storage space unfortunately unexpected fire accident took place in the storage premises of stock holding corporation of India on     11-12-2017 destroying certain documents of the Complainant. After the incident OP informed the Complainant vide its letter dated 12-06-2019 and its readiness to arrange to get the certified copies of the documents from the office of concerned Sub-Registrar. The Complainant is well aware that the accidental fire was beyond its control and there was no negligence on its part and there was no deficiency in service on the part. The said accident did not occur because of any callousness or other acts, but unforeseen circumstances which were beyond the control of OP. OP had no intention of causing any hardship or injury to Complainant. In the absence of the original title deeds, the next best evidence of the owner’s title to the property is the certified copy of the document.
5. It is further contended that, the sale of the property if the original title deed is destroyed or lost in fire, the absence of the same would not affect the value of the property or its title or over it. If sufficient documents such as report filed with police authorities of the place where the fire incident/loss occurred, as well as publication made in daily/news paper by the person from whose custody the documents were lost/destroyed, are available to establish that the originals have been lost and the same are beyond retrieval and in such cases, the owner of the property can make alienation of the property and therefore no question of affecting the said property’s price or value causing any loss to the Complainant. The Complainant was forced to sell the said property at reduced consideration, is totally incorrect and unacceptable.
6. The property value of the Complainant has not diminished and the OP has claimed huge amount of Rs.10,00,000/- as compensation and Rs.1,00,000/- as damages.   OP being a lender of public money should not be penalised for the loss if any caused to the Complainant.  OP has further stated that they don’t have any further charge lien or claim on the said property. The Complainant’s claim of compensation as such is to make wrongful gain out of the unfortunate situation and to cause wrongful loss to OP.
7. It is contended that, as per the terms and conditions of the agreement entered into between OP is not responsible for any loss or any damage of any consignment caused due to act of God. No claim of loss or damage can be entertained by the company in such an event. On these grounds OP prayed to reject the complaint.
8. In order to substantiate the case both parties have filed their affidavit evidence.  Heard the arguments.
9. On the basis of the pleading of the parties, the following points arise for our consideration:-

1) Whether the complainant has proved deficiency in service on the part of the Opposite Party?

2)  Whether the complainant is entitled to the relief prayed for in the complaint?

10. Our answers to the above points are:-

POINT NO.1:            In the Affirmative  

POINT NO.2:            Partly in the affirmative.

                                For the following.

 POINT NO (1) & (2):-

11. On perusal of the pleadings of the parties, it is not in dispute that, the Complainant availed loan of rupees 15,00,000/- and created equitable mortgage on his property bearing NO-899, N-MIG-B, Ground Floor, Yelahanka New Town, Bangalore, in favour of the OP by depositing the title deeds/title documents mentioned therein with OP in respect of the said property. Complainant also cleared all the dues to OP Bank before the due date and requested OP bank to close the housing loan. After Complainant’s request to OP to hand over original title deed to hand over the same to the purchaser as it is one of the main terms of agreement of sale dated 20-03-2019 for completion of sale transaction, OP issued a letter to him dated 12-06-2019 that the original documents deposited with OP has been destroyed in a fire accident on 11^th December, 2017.
12. It is to be noted here that, until repayment of the entire loan amount, OP Bank did not reveal the same to the complainant. OP ought to have taken proper care of the documents furnished by the Complainant. After clearing the said loan OP is bound to determine the mortgage and to return the original documents. Since the same has not been done it amounts to deficiency of service.
13. It is quite natural that the purchaser of the complainant’s proper reduces the consideration amount and the complainant cannot realise the full value of the said property.  No buyer will agree to purchase an immoveable property without the original title deeds.  There will always be an apprehension of the misuse of the title deeds and unscrupulous persons made by creating equitable mortgage by deposit of title deeds borrow money from the banks. 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 sufficient compensation is to be provided to take up such erosion in the market value of the property.     Further if the complainant wanted to take a loan by deposit of title deeds of the property, he will be able to get a ready lender in the market unless the original title deed on the property has deposit.  Even OP may be unwilling to given loan against an immoveable property unless the title deed of the property.
14. The Complainant has not been able to show that he has suffered damage on account of loss of the title deeds in the Fire incident. No document produced as to for what amount the sale deed was registered to show that the sale price was reduced by Rs.8,65,000/- out of the agreed sale consideration. The counsel for the complainant has relied on two reported decisions rendered by Hon’ble NCDRC, New Delhi.  In a similar case between State Bank of India and Amitesh Muzumdar, (R.P. No.2732/2019, dated 03^rd January 2020) wherein the respondent obtained loan of Rs.13,50,000/- from the appellant who did not return the title deeds.  The District Forum awarded the complainant therein a sum of Rs.5,00,000/- as compensation to be paid by the bank with Rs.30,000/- as litigation expenses. The forum also ordered to publish the same regarding the non-availability of the document of title deeds in leading newspaper, to lodge FIR with the concerned police station along with interest on the compensation amount.  The same was questioned before the State Commission and then before the National Commission, wherein it is held that no one in the market will agree to purchase the immovable property on payment of the prevailing market value if he knows that original title deed of the property will not be delivered to him by the seller.  There will be erosion in the value of the property if it is to be sold without the title deeds.  More over if the complainant decides to take loan by depositing the title deeds against the property he will not able to get the loan from the banks and the lenders and held that the compensation awarded by the District forum was justified and proper.
15. In a similar type of case decided by NCDRC on 20^th February 2017 in First Appeal No.288/2014 between Secretary/Manager, Mayyanad Regional Co-operative Bank, -vs- Ebrahim Kutty, the Hon’ble NCDRC by modifying the order of the Hon’ble State Commission and directing the bank to pay compensation of Rs.5,00,000/- instead of Rs.10,00,000/- as ordered along with interest at 12% in respect of the loss of the title deeds by the bank.
16. It has also held in F.A.No.226/2016, Bank of India –vs- Musthafa Ibrahim Nadiadwala and also in R.P.No.3800/2014 Indian Overseas Bank, Hyderabad –vs- Bala Reddy and others, wherein it was held that bank is liable to pay compensation to the complainant because the value of the property was bound to be affected if the original title deed has been lost.
17. In view of the above findings we are of the opinion that if a sum of Rs.5,00,000/- as compensation if ordered to be paid to the complainant by OP along with interest at 12% p.a., on the said amount from the date of clearing/discharging the loan till payment of the entire amount would be just, proper and reasonable.
18. In view of the deficiency in service on the part of OP in not returning the document, the complainant has suffered mental agony, anxiety, mental tension besides financial loss.  The financial loss has been compensated by ordering to pay Rs.5,00,000/- as compensation along with interest. Hence complainant is to be compensated for the mental and physical suffering and we direct OP to pay a sum of Rs.25,000/- as damages and Rs.10,000/- towards litigation expenses as OP made the complainant to approach this commission by spending his time, money and energy and also by paying professional fee to his advocate. Hence we answer Point No 1 & 2 in the affirmative and we proceed to pass the following:-

                                                ORDER

1. The Complaint hereby allowed-in-part with cost.
2. The OP is directed to the pay Rs.5,00,000/- along with interest at 12% per annum from the date discharge of loan to till the date of payment.
3. Further OP is hereby directed to pay a sum of Rs.25,000/- towards damages and Rs.10,000/- towards cost of the litigation expenses
4. The OP is hereby directed to comply the above order at within 30 days from the date of receipt of this order and submit the Compliance report to this commission within 15 days thereafter.
5. Send a copy of this order to both parties free of cost.

Note:You are hereby directed to take back the extra copies of the Complaints/version, documents and records filed by you within one month from the date of receipt of this order.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Forum on this 10^th day of December 2020)

MEMBER                                PRESIDENT

ANNEXURES

1. Witness examined on behalf of the Complainant/s by way of affidavit:

Copies of Documents produced on behalf of Complainant/s:

 Ex P1: Copy of the Agreement of sale with the prospective purchaser Sri.Ramesh

Ex P2: Copy of the Sale Deed executed in favour of the purchaser

Ex. P3: Copy of the letter issued by OP regarding closure of the housing loan Ex P4: Copy of the letter intimating the loss for damage of the documents deposited with the OP

Ex P5: Copy of the letter issued by stock holding dated 19.02.2017 to the Senior police Inspector, Navi Mumbai, regarding destruction of the documents deposited with it along with police documents and the spot Panchanama.

Ex P6: Copy of the Newspaper publication

Ex P7: Copy of the another letter by Stock holding company dated 30^th January 2018

Ex P8: Copy of the legal notice

Ex P9: Copy of the Postal acknowledgement

Ex P10: Copy of the Reply given by the OP

2. Witness examined on behalf of the Opposite party/s by way of affidavit:

RW-1: Sri. Monu J Koshy

Copies of Documents produced on behalf of Opposite Party/s

Ex R1: Copy of the Home loan sanction letter in favour of complainant

Ex R2: Copy of the closure certificate

Ex R3: Copy of the letter written by our bank to the complainant informing the fire accident and the destruction/loss or damage of the document deposited.

Ex R4: Copy of the Panchanama drawn by the Maharastra Police in Marati Language

Ex R5: Translated copy of the same in English

Ex R6: Intimation received from stock holding document management service to our General Manager at Bombay

Ex R7: Newspaper cutting (3 in Nos)

Ex R8: Copy of the legal notice issued by the complainant

Ex R9: Reply

Ex R10: Postal receipt

Ex R11: Encumbrance Certificate of the property in respect of the complainant.

MEMBER                                PRESIDENT