Coming down heavily on ICICI Bank Ltd for not keeping safe an original property document of a borrower and trying to shift the liability to a courier company, the national consumer disputes redressal commission (NCDRC) says the safe custody of the original title documents to the property are the liability of the Bank. It also directed ICICI Bank to pay Rs25 lakh as compensation and Rs50,000 litigation costs to the borrower.
In an order, the NCDRC bench of Subhash Chandra (presiding member) says, "The liability of ICICI Bank is manifest in the loss of the documents. It cannot seek to shift the liability to its agent, Blue Dart Express Ltd. The deficiency in service has also been held as established by the banking ombudsman (BO). In view of the facts and circumstances of the case, the complaint has merit and is liable to succeed against ICICI Bank."
Manoj Madhusudhanan had obtained a home loan of Rs1.86 crore for a property in Bengaluru with an equated monthly instalment (EMI) of Rs1.72 lakh paid for over 20 years. He registered the property on 22 April 2016. ICICI Bank retained as security original documents of the home, including the registered sale deed, possession certificate, khata certificate, tax paid receipts, khata endorsement and encumbrance certificate. ICICI Bank did not provide any scanned or true copies of these documents to the borrower.
On 14 June 2016, he asked the lender to seek scanned or true copies of the documents he submitted for the loan. On 21 June 2016, ICICI Bank informed him that it was initiating a process of tracing the misplaced original documents of his property. The following month, officials from ICICI Bank informed him that his property documents had been lost in transit from Bengaluru to Hyderabad by Blue Dart. On 8 June 2016, ICICI Bank told Mr Madhusudhanan that it had served a legal notice to Blue Dart and it was deferring the EMIs due till the recovery of the original documents.
Mr Madhusudhanan pointed out that on 25 May 2016, Blue Dart accepted its negligence and apologised by email to ICICI Bank. He says the negligence of ICICI Bank is established since it admitted that only his documents were lost from the packet sent to Hyderabad for which it sought his consent to file a police complaint and paper publication. His consent was also sought to recreate the documents and an offer of compensation of two EMIs was made while it issued a legal notice to Blue Dart seeking compensation of Rs2.50 crore, the borrower says.
Since ICICI Bank failed to respond to its efforts to resolve the issue, Mr Madhusudhanan approached the banking ombudsman (BO). On 22 September 2016, the BO directed the lender to issue a duplicate copy of the lost documents, publish a public notice regarding the loss and pay Rs25,000 towards deficiency in service to the borrower.
While the order of the ombudsman was complied with by ICICI Bank, Mr Madhusudhan states that the publication was limited to only Bengaluru whereas the papers were lost in Hyderabad. Therefore, he approached NCDRC alleging that ICICI Bank is extremely negligent about the original papers of his property which is valued at Rs5 crore and that copies of documents cannot replace the sanctity of the original documents.
During the hearing before NCDRC, ICICI Bank stated that the complaint was not maintainable since Blue Dart is attempting to wriggle out of its liability for mishandling and misplacing documents of the borrower.
Blue Dart contended that the complaint filed against it is not maintainable as there was no privity of contract between Mr Madhusudhanan and the courier company and the liability, if any, can only rest with ICICI Bank. It states that ICICI Bank neither disclosed the contents of the consignment nor its value or importance at the time of dispatching the consignment. However, the consignment was delivered intact and in a sealed condition at Hyderabad on 29 April 2016, which was accepted without any remarks or protest by ICICI Bank.
In his rejoinder, Mr Madhusudhanan denied the contentions of ICICI Bank and Blue Dart and asserted that the loss of the original documents by the lender to whom they were handed over puts him at a financial loss as the value of his property bought against a loan from the Bank will be adversely impacted due to the title not being supported by original documents.
After hearing all parties and considering the material on record, the bench of Mr Chandra noted that it is manifest that ICICI Bank was responsible for the custody and security of the original title documents about the housing loan sanctioned by it to Mr Madhusudhanan.
Rejecting ICICI Bank's contention that the papers were lost by the courier company and hence any liability must be borne by Blue Dart, the bench says, the papers were in the custody of the Bank given the plot having been mortgaged to it and the BO provided liberty to the borrower to seek further remedy if so desired.
ICICI Bank also contended that the claim of Rs5 crore by Mr Madhusudhanan is excessive as no basis for claiming the value of Rs5 crore had been provided and it is not the value of the property. However, NCDRC noted that ICICI Bank itself sent a legal notice to Blue Dart seeking damages of Rs2.50 crore for the loss of the documents.
As regards the compensation sought by the complainant is concerned, the bench says, it is manifest that the property was mortgaged for a sum of Rs1.95 crore on 22 April 2016 to ICICI Bank. "Even if some appreciation of value is considered, it would not be of the order of Rs5 crore given the short duration of time between the mortgage date and the filing of the complaint. This claim is, therefore, evidently inflated. The damages of Rs2.50 crore claimed by ICICI Bank from Blue Dart appears to be more realistic."
"However, the issue is not of fixing a value to a piece of real estate which Manoj Madhusudhanan is in possession of. Rather, it is one of compensation for the deficiency in service and of indemnifying the complaint against any future loss. The compensation paid by ICICI Bank in terms of the order of the BO is required to be factored in while deciding the same," it says.
Mr Chandra, in his order, stated that the safe custody of the original title documents to the property was the liability of ICICI Bank and Blue Dart’s liabilities are limited in view of clauses 1 and 7 of the agreement between them, and the complaint squarely lies against the Bank.
He then directed ICICI Bank to obtain, at its cost, all the reconstructed and duly certified copies of the documents handed over by the complainant as security at the time of registration of the sale deed and hand over true and certified copies to Mr Madhusudhanan.
It also asked ICICI Bank to issue an indemnity bond in favour of the borrower regarding his property documents.
NCDRC directed ICICI Bank to pay, within eight weeks, Rs25 lakh towards compensation after factoring in the compensation awarded by the BO and Rs50,000 litigation cost.
(Consumer Case No129 of 2017 Date: 31 August 2023)
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