Bank told to pay 1 lakh for losing property deed

Bank told to pay 1 lakh for losing property deed

A bank has been directed by a consumer forum in the city to pay a compensation of Rs 1 lakh to a man who suffered extreme inconvenience and harassment after his documents were lost by the bank.

Kamal Kant Joshi, a resident of east Delhi, took a loan of Rs 50 lakh from the bank after depositing the original papers of his property with the bank. After repaying the loan amount, Joshi found out that his papers had been lost.

Observing that people are often left helpless in such situations due to the absence of any provisions for penalising financial institutions for dereliction of duty, the bench presided by N A Zaidi also asked the Reserve Bank of India to formulate stringent guidelines with regard to the liability of financial institutions. He also asked that a penalty be imposed.

Joshi approached the forum seeking a compensation of Rs 2 lakh from HDB Financial Services Ltd (respondent) after the bank, after much dilly-dally, admitted in November 2011 that it had lost the documents and suggested Joshi to sell the property to it. By then Joshi had already made a deal with someone else, which eventually got stuck since the bank had lost his original papers.

"The loss of title deeds would certainly diminish the value of the property, as without the original title deeds not only it would be a gruelling job to sell the property. The complainant is bound to suffer substantial financial loss on sale of the said property and no banking institution would give any loan to him in the absence of the original title deeds," the east district consumer forum said.

Source:BankingUpdates