National Consumer Disputes Redressal Commission

National Consumer Disputes Redressal Commission (NCDRC): While rendering relief to Life Insurance Corporation Housing Finance company, NCDRC set aside the order of U.P. State Consumer Disputes Redressal Commission, vide which LIC Housing Finance was directed to pay 85% of the current value of a property along with interest and punitive damages as well as the cost of litigation, to the complainant for misplacing sale deed of the house mortgaged by him in 1998 against two loan amounts of Rs 4 lakh and Rs 5 lakh, respectively. NCDRC found the compensation excessive and reduced it to Rs. 5 lakhs for the loss of the sale deed and Rs. 20,000 as cost of litigation.

Earlier, the complainant had taken Rs 4.75 lakh loan from the Company in April, 1998 and delivered the original sale deed of his house in Vishal Khand, Gomtinagar as “equitable mortgage”. The housing finance company, in December 2003, issued a certificate informing that the original sale deed of the mortgage was “misplaced”. Under the same “equitable mortgage” deal, LIC Housing Finance had later loaned Rs 5 lakh to the complainant. The complainant repaid the loan in February, 2004 and got the NOC issued in August, 2006. The LIC Housing Finance, at that time too, said it had misplaced the original documents of the house. A year later, when the complainant asked for the original registry, the LIC maintained it had misplaced the papers.

The complainant approached the State Commission pleading to recover original documents of the property from LIC Housing and urged for a compensation of Rs 24 lakhs. State Commission ordered payment of 85% of the current value of the property along with 18% interest and Rs.5 lakhs as punitive damages and Rs.20,000/- as cost of litigation. Before NCDRC, LIC Housing Finance stated that they were not in a position to return the said document as it had been misplaced but they had already taken various measures like making publication in the newspaper, obtaining a certified copy of the documents etc. They had even decided to advance second loan of Rs. 5 lakhs to the complainant.

After perusal of relevant material on record and referring to previous judgments of the Commission, NCDRC observed that the compensation allowed to the complainant is excessive. “By directing payment of 85% of the current value of the house along with 18% interest, the State Commission has ordered payment of amount almost more than double the current value of the house in question. The award of such compensation for the loss of the title deed cannot be held to be justified by any stretch of imagination. At best, the appellant/OP-1 (LIC Housing Finance) could be given directions to compensate the complainant for the deficiency in service on their part for the loss of the said title deed,” stated the Commission.

While setting aside the order of State Commission, NCDRC noted, “The appellant is directed to pay a compensation of Rs. 5,00,000 (Rupees five lakhs only) to the complainant for the loss of the sale deed within a period of four weeks from today, failing which, he shall be liable to pay interest @ 12% p.a. for the period of default in making such payment. In addition, a sum of Rs. 20,000  is also allowed as litigation cost to the complainant.” [LIC Housing Finance Co. Ltd. v. Rajeev Kumar Jain, 2016 SCC OnLine NCDRC 1886, decided on December 8, 2016]

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