SBI Banjara Hills Branch asked to pay customer Rs. 5L for misplacing property documents

The complainant, P. Kalavathi, a resident of Engineering Colony in Hyderabad, took a housing loan from the State Bank of India, Road number 5, Banjara Hills branch. It was then the State Bank of Mysore and was later merged with its principle bank, the State Bank of India.

Ms. Kalavathi took the loan to purchase a flat in Yellareddyguda, Hyderabad. She purchased the property after creating an equitable mortgage by depositing the registered sale deed of the property, executed on 12 July 2002, along with link documents relating to the said properties as security. The loan amount was payable in equal monthly installments.

Ms. Kalavathi had repaid the entire loan by December 2018. However, when she went to the bank to collect her documents she found that they were missing.

"When I approached the bank for the release of the original documents which I had deposited as collateral security, I was advised to collect them from the State Bank of India, RACPC, Banjara Hills. When I approached them, they said they could not find the documents and advised me to approach their own bank again," the complainant said.

However, all her efforts proved futile and the banks failed to hand over the documents despite repeated reminders. The delay in returning the original documents caused the complainant severe hardship and mental agony.

The bank in its reply to the consumer forum said it was unable to trace the original sale deed and that it had made alternate arrangements to furnish the authenticated extract certified copy of the sale deed with due endorsement specifying the reasons for misplacement of the original documents.

After filing a complaint, Ms. Kalavathi approached the banks and admittedly accepted the bank's proposal to take the certified copies of the sale deed. Both the parties intended to settle the issue amicably out of court. Therefore, the opposite parties did not render/commit any deficiency of service as alleged by the complainant.

After examining the evidence provided by both the parties, the forum said the complainant had undergone mental agony and trauma caused by the negligence and deficient acts of the bank for which she was entitled to compensation. "Substituting the original document with the certification from the banker does not satisfy the purchaser if case anyone wants to purchase the property of the complainant," it said.

"Any purchaser will suspect the bonafide and title of the complainant's property in the absence of the original documents, making it difficult for her to sell the property or get loan from any other public bank," the forum said and ruled in favour of the complainant.

The forum asked the bank to pay the complainant Rs. 5 lakh towards damages and for causing trauma and mental agony to the complainant and her family members. It also asked the bank to pay Rs.10, 000 towards the costs of litigation.