NCDRC Imposes Penalty On ICICI Bank Over Lost Property Documents

In a ruling in consumer interest, the National Consumer Disputes Redressal Commission has directed ICICI Bank Ltd. to pay Rs 25 lakh as compensation for losing the original title documents pertaining to the property of a person who had taken a housing loan from the bank.

Manoj Madhusudhanan had availed a loan to the tune of Rs 1.86 crore from the bank. Upon execution of the sale deed, the bank retained various original property documents as collateral.

Subsequently, some of these property documents got lost in transit.

This prompted Madhusudhanan to approach the banking ombudsman for relief as the bank failed to resolve the issue. The ombudsman directed the bank to issue a duplicate copy of the lost documents, publish a public notice regarding the loss, and pay Madhusudhanan Rs 25,000 due to a deficiency in service.

Not content with the relief, Madhusudhanan then approached the NCDRC, alleging gross negligence on the part of the bank, and claimed a compensation of Rs 5 crore for the loss and mental agony caused to him.

It was further submitted that his title to the property based on the recreated or duplicate papers would be weak in comparison with the original papers, which would affect the property's value if he wanted to place it on the real estate market or use it as security.

The bank tried to evade its responsibility by pinning the blame on the courier company.

However, the consumer court was not inclined to accept the bank's argument. It said that it was manifestly clear that the bank was responsible for the custody and security of the original title documents.

The court clarified that the liability cannot be shifted to the courier company, as it was only acting as an agent of the bank. It further said that the loss of original papers puts the legal title to the property at risk.

Lastly, the NCDRC directed the bank to recover all the reconstructed and duly certified copies of the documents at its own cost. The court also awarded a compensation of Rs 25 lakh to Madhusudhanan, along with Rs 50,000 for the litigation costs incurred by him.