Hyderabad: In a recent ruling, a district consumer forum has ordered Axis Bank Ld Loan Centre to compensate a consumer with a sum of 3 lakh for misplacing their original property documents and failing to return them, even after the home loan had been fully paid off. The forum also mandated that the bank obtain a certified copy of the sale deed and other relevant documents from the appropriate authority and provide them to the complainant. Additionally, the bank was instructed to publish an advertisement acknowledging the loss of the documents from their custody.
The complainant, Venkat Ramana P, had entrusted the original deed and other necessary paperwork to the bank as collateral for a home loan of 1.4 crore, with a tenure of 96 months. After repaying the loan in October 2020, Ramana was informed that he would receive an SMS from the loan center, instructing him to collect the original documents. However, he never received the expected message. Instead, he was informed that the documents were missing and would be returned once they were located.
Unable to sell his house without the original documents, Ramana filed a complaint with the consumer forum when the bank failed to respond to a legal notice. In their written response, bank officials stated that they were prepared to reconstruct the original documents, but the complainant refused to give consent. They argued that the loss of the original documents did not affect the legal ownership status of any person, as the owner’s name was reflected in the encumbrance certificate. Furthermore, they claimed that the registering authority accepted the reconstructed documents as valid and genuine for the transfer of ownership.
During the trial, the District Consumer Disputes Redressal Commission, Ranga Reddy, acknowledged that the absence of the original sale deed would indeed present difficulties for the complainant in putting their property on the market. The bench concluded that the bank was at fault for the misplacement of the complainant’s original sale deed, holding them accountable for deficiency in service.
As part of the ruling, the forum directed the bank to issue an indemnity bond in favor of the complainant to safeguard against any future damages incurred due to the loss of the original documents. Additionally, the bank was deemed responsible for compensating the complainant for any losses that may arise in the future.
In any circumstance certified copy never takes place of original. Bank documents are assets of the Branch, it is gross negligence on part of the erring employee/officer.
No Bank sanction loan against cerified copies of documents because certified documents of property and duplicate both are same.
Agree with first para however banks do sanction loan on the basis of lost copy of original registry..
After police complaint of lost document, publication in local newspapers and certified copy of documents, proposal can be sanctioned by next higher authority in many banks..
I agree with the above proposition that banks do sanction loans on the basis of certified copies of property papers. But banks should exercise utmost care in safe keeping of property papers after creation of equitable or other forms of mortgage. In no circumstances bank should say about its displacement. These docs are examined by banks internal auditors.More over these docs should be kept in strong room to thwart it’s misplacement. In my opinion customer should not be harassed for the laxity of Bank’s staff.