NEW DELHI: The district consumer commission, Thrissur, has held the Central Bank of India liable for losing an original Pattayam (land title document) deposited as security for an agricultural loan, observing that the bank’s negligence restricted the property owner to fully exercise her rights over the land.The commission directed the bank to pay Rs 2.5 lakh as compensation and Rs 10,000 towards litigation costs, both carrying interest at 9 per cent per annum until realisation.What was the dispute about?A complaint filed by Sathyavalli and her son Saseendran, who had obtained an agricultural loan of Rs 3 lakh from the Central Bank of India’s Thanikkudam branch. As security, they deposited the original Pattayam relating to her 0.8903 hectare property in Madakkathara village.According to the complainants, the issue came to light when Saseendran approached the bank for an additional loan and was informed that the original document could not be traced.The bank later acknowledged that the original Pattayam had been lost while in its custody.The complainants approached the consumer commission seeking Rs 20 lakh in compensation, arguing that the loss of the original title deed affected their ability to deal with the property, secure any further loans and realise its full market value.The bank argued that the borrowers had not repaid the loan on time. However, the commission said this did not excuse the bank’s failure to keep the property documents safe.What did the court say?After examining all the records, the commission found that the original Pattayam had indeed been deposited with the bank and that the bank was unable to return it.Rejecting the bank’s defence, the commission observed that the borrowers’ loan repayment issues had nothing to do with the bank’s responsibility to safely keep the original property papers.“Hence the opposite parties contention regarding the complainant’s default in repayment cannot justify their negligence in safely keeping the valuable documents,” the commission said.The commission noted that even if the complainants cleared the entire outstanding loan, the bank would still be unable to restore them to the position they were in before the document was pledged.“Loss of the original document prevents the complainants from being restored to the original position prior to pledging the document,” the commission observed.It further noted that without the original title deed, the property owner could face difficulties proving ownership and carrying out future transactions involving the land.“Even full repayment of the debt would not make the property ‘scot-free’, nor would it enable the 1st complainant to exercise full rights over the property, as the original title document is essential for ascertaining ownership and undertaking any transaction,” the commission said.“The decline in the value of the property if it is to be sold without the original title document, would be substantial,” it added.The commission also pointed out that the complainants would face difficulties obtaining future loans because financial institutions ordinarily require deposit of original title documents before sanctioning credit facilities.“Even banks including the opposite parties or other financial institutions will not be willing to provide loan against a property, if the original title document is not deposited with them,” the order stated.The commission did not award Rs 20 lakh compensation sought by the complainants as they failed to show the exact financial loss they had suffered, it held that the loss of the original title deed had clearly caused hardship and financial difficulties.It awarded Rs 2.5 lakh as compensation for the agony, hardship and financial loss suffered by the complainant, along with Rs 10,000 towards litigation costs.The commission clarified that its order would not prevent the bank from pursuing any lawful remedies available to recover outstanding loan dues, if any.
