Loan Repaid Property Deed Lost Woman Wins Rs 2 Lakh Bank Manager

The Hyderabad consumer commission has held a bank branch manager deficient in service for allegedly failing to return a retired woman employee’s original property papers after she repaid her housing loan, and directed the branch to return the original documents or provide reconstructed and certified copies. It also directed the branch manager to pay Rs 2 lakh in compensation and Rs 15,000 towards costs.

President B Uma Venkata Subba Lakshmi and member C Lakshmi Prasanna were hearing a complaint filed by the 60-year-old retired bank employee, who had taken a housing loan of Rs 7.5 lakh from the bank in 2012.

“Not returning the original title deeds even after receiving the total loan amount along with interest is nothing but deficiency in service on the part of the opposite party number 2 (branch manager). There is nothing on the record to establish deficiency in service on the part of opposite party number 1 (bank),” the August 27 order read.

The complainant, a senior citizen and a retired employee of the bank, availed its services for a housing loan of Rs 7.5 lakh in 2012, i.e. during her service tenure. She claimed that she repaid the total loan amount and the loan account was officially closed.

Despite clearing the loan amount, the bank allegedly failed to return her original property papers. She requested the bank to return the same but only received a photocopy of the property papers and a no-dues certificate following multiple requests.

The woman claimed that the loss of the original property document caused her immense mental agony and hardship. She added that due to the bank’s actions and omissions, she has developed neurological issues, leading to paralysis.

Aggrieved, she moved the commission seeking justice while pointing out that without the original property papers, she faces potential legal and financial challenges, including difficulty in transferring the property. The woman was represented by advocate Hanuman Naik.

The bank, through advocate M V Raj Kumar Gabriel, submitted that the allegations in the complaint were made against the said branch manager and the woman accidentally added the bank in the present complaint.

The manager, on the other hand, argued that he made sincere efforts to trace the original property papers of the complainant, but failed to find them. It was further stated that, as part of his official duty and responsibility, he reconstructed the said property papers and followed the procedural aspects by issuing a paper notification in the newspaper in February 2024. He added that the complainant had not raised any objection while receiving the reconstructed property papers, lost certificate issued by the police department, etc.

The commission noted that banks keep the original property documents as security for the loans and retain possession of them until the loans are fully repaid. It observed that the woman had already repaid the loan amount along with interest and had been continuously following up with the bank manager for her original property papers, but in vain.

The consumer body pointed out that the absence of an original sale deed affects the owner’s ability to freely deal with the property and realise its full market value. It noted that the missing original could also create a risk of misuse and that its absence could affect a person’s ability to sell, mortgage or transfer the property.

The commission held that the branch manager should return the original property papers along with other linked documents, in original, which have been deposited at the time of obtaining the loans or obtain, at its cost, all the reconstructed and certified copies of the documents handed over by the complainant.

Accordingly, the commission directed the branch manager to pay compensation of Rs 2 lakh and costs of Rs 15,000 to the woman within 45 days.

This ruling highlights that bank branches are responsible for keeping customers’ original property documents safe and can be held liable if those documents are lost while in their custody.

Aggrieved consumers may contact the consumer helpline in their respective states (Telangana: 0771-2582902) or call the National Consumer Helpline at 1915 for assistance.

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Richa Sahay is a Legal Correspondent for The Indian Express (Digital), where she focuses on simplifying the complexities of the Indian judicial system. A law postgraduate, she leverages her advanced legal education to bridge the gap between technical court rulings and public understanding, ensuring that readers stay informed about the rapidly evolving legal landscape. Expertise Advanced Legal Education: As a law postgraduate, Richa possesses the academic depth required to interpret intricate statutes and constitutional nuances. Her background allows her to provide more than just summaries; she offers context-driven analysis of how legal changes impact the average citizen. Specialized Beat: She operates at the intersection of law and public policy, focusing on: Judicial Updates: Providing timely reports on orders from the Supreme Court of India and various High Courts. Legal Simplification: Translating dense "legalese" into accessible, engaging narratives without sacrificing factual accuracy. Legislative Changes: Monitoring new bills, amendments, and regulatory shifts that shape Indian society. ... Read More