The State Bank of India (SBI) has been ordered to pay ₹3.20 lakh for misplacing original property documents submitted as collateral for a home loan. The Ranga Reddy District Consumer Commission held SBI responsible for negligence and deficiency in service after the bank failed to return the documents even after the loan was fully repaid. SBI was directed to pay ₹3 lakh as compensation and ₹20,000 as litigation costs.
The State Bank of India (SBI) has been ordered to pay a total of Rs 3.20 lakh after it misplaced original property documents submitted as collateral for a home loan. The order was passed by the Ranga Reddy District Consumer Disputes Redressal Commission in Hyderabad.
Borrower Had Taken Rs 5 Lakh Home Loan
The case involved B Venkatesham, who had taken a home loan of Rs 5 lakh from SBI’s Aditbala branch. As additional security for the loan, he submitted the original sale deed and other property documents related to a 194-square-yard plot in Bairamalguda.
The property belonged to his relative, M Anjaiah, and the original documents were deposited with the bank as collateral for the loan.
Original Documents Not Returned After Loan Repayment
Venkatesham later repaid the entire home loan and received a “No Dues Certificate” from SBI in March. After clearing the loan, he asked the bank to return the original property documents that had been submitted as security.
However, SBI could not return the original documents. The bank informed him that the papers had been misplaced and provided authorised copies instead.
Borrower Approached Consumer Commission
Venkatesham was not satisfied with the bank’s response and filed a complaint before the Ranga Reddy District Consumer Disputes Redressal Commission. He accused SBI of negligence for failing to safely keep and return the original property documents.
During the hearing, SBI informed the Commission that it had filed a police complaint regarding the missing documents and had provided certified copies to the borrower.
SBI Said Property Belonged to Another Person
SBI argued that the property belonged to M Anjaiah and not to Venkatesham, who had filed the complaint. On this basis, the bank claimed that Venkatesham was not entitled to receive compensation for the missing documents.
The Consumer Commission rejected this argument. It observed that the home loan account was in Venkatesham’s name and that he had the legal right to ask for the return of the original documents submitted as collateral.
SBI Ordered to Pay Rs 3.20 Lakh
The Commission held SBI responsible for negligence and deficiency in service for failing to keep the original property documents safe.
It directed SBI to pay Rs 3 lakh as compensation to Venkatesham. The bank was also ordered to pay Rs 20,000 towards litigation expenses, taking the total amount payable to Rs 3.20 lakh.
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