District Consumer Disputes Redressal Commission (DCDRC), Kanchipuram: Complainant, in a petition filed under Section 35 of the Consumer Protection Act, 2019, sought the return of original title documents deposited for a loan agreement, along with compensation for mental agony, emotional trauma, and financial insecurity caused by the bank’s gross negligence. A bench comprising U. Kasipandian, President, and M. Jawahar, Member, held that the bank’s failure to return the original title documents upon full repayment of the housing loan amounted to a deficiency in service. The bench further noted that the Reserve Bank of India’s circular expressly mandates the return of such documents within 30 days of loan closure, and that non-compliance renders the bank liable to pay compensation.
Since the bank itself admitted to the loss of the documents, the Commission found it liable for all consequences arising from its negligence. Accordingly, the Commission awarded monetary compensation along with interest, to run until the bank achieves full compliance with its obligations.
BACKGROUND
The complainants availed a housing loan of Rs. 46,35,000 from the opposite party-bank in 2012 for purchase of a residential flat. As security, the complainants deposited original title documents, including the sale deed, construction agreement, and memorandum of deposit of title deeds, with the bank.
The loan was fully repaid on 16.04.2024. After closure of the loan, the complainants sought return of the original documents. It was communicated to the complainants that the documents were misplaced while in the custody of the bank. The bank also acknowledged the loss.
The complainants issued a legal notice and pursued grievance redressal through the RBI Ombudsman. The complaint before the Ombudsman was closed on jurisdictional grounds. The bank did not return the original documents thereafter.
The opposite party stated that the documents were lost and that steps were taken such as reporting the loss, publishing notices in newspapers, and providing certified copies. It also stated that registration can be completed without original documents.
ISSUES
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Whether the complaint is maintainable under the Consumer Protection Act, 2019.
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Whether the opposite party failed to provide service by not returning the original title documents after closure of the loan.
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Whether the complainants are entitled to return of documents or compensation and what reliefs are payable, if any.
ANALYSIS
The Reserve Bank of India Circular dated 13.09.20231 requires regulated entities to return original movable or immovable property documents within 30 days of full repayment and provides for compensation of Rs. 5,000 per day of delay where the delay is attributable to the regulated entity. It also provides for assistance in obtaining duplicate or certified copies in cases of loss.
The materials on record indicate that the documents were not returned within the prescribed period and that the bank did not complete the return process within the timeline specified in the RBI circular.
DECISION
The complaint was partly allowed. The opposite party was directed to return the original title documents deposited under if available or, take necessary steps as per law regarding compensation or settlement in lieu thereof as determined by the Commission. The opposite party was directed to pay Rs. 5,000 per day from 16.06.2024 until the date of compliance, as per RBI Circular dated 13.09.2023, subject to applicable limits and verification of delay also pay interest at 18% per annum on Rs. 46,35,000 from 16.04.2024 until realization.
[Somasekhar Gangarapu v. SBI, CC.No.03 / 2026, decided on 03-06-2026]
*Judgment pronounced by Thiru. U.Kasipandian]
Advocates who appeared in this case:
For Complainant: Mr. Senthamil Selvan, Advocate.
For Opposite party: Mr. Arun Kumar, Advocate.
