1 hr ago
Bombay High Court Orders SBI Compensation Over Lost Title Deeds
A company gave its original property papers to SBI as security for a loan.
The company finished repaying the loan in August 2003.
SBI later said it could not find the papers after a bank branch moved.
The company asked the court for compensation.
SBI argued that the company had waited many years to ask for the documents and had already received ₹1 lakh.
The Bombay High Court rejected that defense.
The court said banks must safely keep and return important property papers after loans are repaid.
SBI must pay ₹5,000 for each day from December 1, 2023, until it provides proper records.
The bank has 12 weeks to reconstruct the documents.
The Bombay High Court ordered SBI to pay ₹5,000 per day from December 1, 2023, over missing property title deeds.
M/s In Vogue Creations deposited original documents for two commercial properties with SBI in 1979.
The firm’s loan was fully repaid in August 2003, but SBI did not return the documents.
SBI said the papers were lost after a branch relocation and argued that the firm had delayed requesting them.
The court gave SBI 12 weeks to reconstruct and provide valid title records, allowing it to adjust ₹1 lakh already paid.
- Who
- The Bombay High Court, State Bank of India, and M/s In Vogue Creations, represented by partner Achala Joshi.
- What
- The court ordered SBI to pay ₹5,000 per day for failing to return original property title documents and directed it to provide reconstructed records.
- Where
- The documents concerned commercial properties in Prabhadevi and Taloja and had been deposited at SBI’s Dadar branch in Mumbai.
- When
- The loan was repaid in August 2003; the daily payment runs from December 1, 2023, until valid records are provided.
- Why
- The court held that banks must preserve and return original title documents after a borrower fully discharges a loan.
Borrower and Court’s Position
State Bank of India’s Position
Responsibility for missing documents
Borrower and Court’s Position
The firm and the court said SBI was responsible for safely preserving and returning the original title deeds after the loan was repaid.
State Bank of India’s Position
SBI said the documents could not be traced after the branch was relocated.
Delay in requesting documents
Borrower and Court’s Position
The court said the borrower’s obligation did not depend on repeatedly reminding the bank to return the documents.
State Bank of India’s Position
SBI argued that the firm had waited nearly 15 years before requesting the papers.
Amount of compensation
Borrower and Court’s Position
The firm claimed ₹3.93 crore under an RBI circular, while the court imposed ₹5,000 per day until valid records are provided.
State Bank of India’s Position
SBI argued that the ₹1 lakh previously awarded by the Banking Ombudsman was sufficient.
Key facts
- Court
- Bombay High Court
- Bank
- State Bank of India (SBI)
- Petitioner
- M/s In Vogue Creations
- Documents
- Original title deeds for two commercial properties
- Daily compensation
- ₹5,000 per day from December 1, 2023
- Document deadline
- SBI was given 12 weeks to reconstruct and provide legally valid title records
- Earlier payment
- ₹1 lakh awarded by the Banking Ombudsman, which SBI may adjust
Quotes
Bombay High Court
The division bench of the Bombay High Court hearing the title-deed compensation petition
“A borrower who has fully discharged the loan is entitled to proceed on the legitimate assumption that the Bank or a Financial Institution entrusted with the custody of valuable original title documents will maintain proper custody of those documents and return them upon discharge of the secured liability. The obligation to preserve title documents and to return them upon discharge of the underlying liability cannot depend upon the borrower reminding the Bank to perform that obligation.”
freepressjournal.in
Sources
Related news
Hyderabad Commission Orders Bank Manager Compensation Over Missing Property Documents
After Final Home Loan EMI, Collect These Essential Documents
Bombay HC says Vijay Mallya asset dispute should end
SBI ordered to pay ₹1.3 lakh over ₹80,000 ATM fraud
Mumbai, Kanpur Locker Thefts Raise Questions About Bank Compensation
HDFC Bank must pay Rs 47,500 for arbitrary loan rejection
CNG Prices Rise in Delhi Amid West Asia Gas Disruptions
Young Champions Shine at Maharashtra State Squash Open
BMC Denies Bhandup Dahi Handi Permission Over Law-and-Order Concerns
Malaysian National Arrested With 1.8 Kilograms Hydroponic Weed
