Advertisement
A consumer forum in Ghaziabad has held a cooperative bank liable for losing a borrower's original property documents despite full loan repayment. The documents went missing during the bank's branch relocation from Ghaziabad to Noida. The borrower, who sought the return of his papers much later, was told they were untraceable. The commission has directed the bank to pay INR 25,000 for mental distress and INR 5,000 for litigation expenses. The bank must also assist in obtaining certified copies of the lost deed. This case reflects increasing regulatory pressure on lenders to maintain stringent safeguards over customer documents.
The District Consumer Disputes Redressal Commission (DCDRC) in Ghaziabad has directed a cooperative bank to compensate a borrower for misplacing his original property documents after full settlement of a housing loan. The commission found the bank guilty of deficiency in service and unfair trade practice. Advertisement
The borrower, who had availed a housing loan years ago from the cooperative bank's Ghaziabad branch, approached the institution recently to retrieve his original property documents. However, he was informed that the documents had been lost during the branch's relocation to Noida. The bank's internal correspondence revealed that it had already lodged an FIR after being unable to trace the records, admitting its inability to recover them.
Despite this admission, the bank tried to argue that the consumer forum lacked jurisdiction and that the dispute should be referred for arbitration under the provisions of the Uttar Pradesh Cooperative Societies Act. The commission rejected this argument, citing clear consumer interest and accountability, and proceeded with the ruling.
The commission has ordered the bank to pay INR 25,000 to the complainant as compensation for the mental harassment caused due to the loss of critical legal documents. An additional INR 5,000 has been awarded to cover litigation expenses. Further, the bank has been directed to provide full assistance in procuring certified duplicate property documents from the appropriate registrar's office. The order also mandates the bank to issue an official confirmation stating that the original documents are irretrievably lost and will not be misused.
This judgment follows a string of similar cases across India. Just months ago, the National Consumer Disputes Redressal Commission (NCDRC) imposed a penalty of INR 25 lakh on ICICI Bank for losing a customer's property papers.
In September 2023, the Reserve Bank of India introduced strict guidelines mandating that banks must return original property documents within 30 days of full loan repayment. Failing to do so attracts a penalty of INR5, 000 per day of delay. The RBI circular also directed banks to have a clear mechanism for grievance redressal in such cases and to issue prompt declarations when documents go missing.
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
