NEW DELHI: The Delhi State Consumer Disputes Redressal Commission has upheld a Rs 10 lakh compensation order against LIC Housing Finance for losing a borrower’s original property documents after full repayment of a housing loan, holding the company guilty of deficiency in service.A bench comprising Justice Sangita Dhingra Sehgal (President) and Pinki (Member Judicial) dismissed the appeal filed by LIC Housing Finance and upheld the findings of the district forum that the lender failed to return the complainant’s original title deeds despite several requests.What was the dispute about?The complainant, Smt. Bindu Roy, had applied for a housing loan of Rs 1 lakh from LIC Housing Finance in December 1994 to purchase a house property at Hauz Khas, New Delhi. She later obtained an additional loan of Rs 2 lakh for the renovation of the property.According to the complainant, all original title documents relating to the house were deposited with the Housing Finance as mortgage security.The commission relied heavily on a certificate dated January 31, 1996, issued by LIC Housing Finance itself, which acknowledged in clear terms that all original documents had been mortgaged with it.“This is to certify that Smt. Bindu Roy and Sh. Himanshu Prasad Roy have taken a loan of Rs. 1,00,000/- from us. The property is mortgaged with us. All the original documents of the property are mortgaged with us against the above mentioned loan A/C,” the certificate read.After repaying the entire loan amount in August 2010, the complainant sought the return of original sale deed and title documents through letters dated October 21, 2010, followed by reminders in May 2011, September 2013 and April 2014.However, the company neither returned the papers nor gave any satisfactory explanation regarding the whereabouts of the documents.Aggrieved by this, the complainant approached the district forum under the Consumer Protection Act, 1986, alleging deficiency in service and seeking Rs 15 lakh as damages for non-return of the sale deed and Rs 5 lakh as compensation for mental agony.LIC Housing Finance’s defenceBefore the state commission, LIC Housing Finance argued that the complainant had never deposited any original sale deed with the company and claimed that the complaint was filed with ulterior motives. It further contended that the Rs 10 lakh compensation awarded by the district forum was excessive as no actual misuse of the documents had been shown.The company also submitted that it was willing to lodge a police report, publish a public notice and obtain certified copies of the documents at its own cost to assist the complainant.What did the commission rule?Rejecting the appeal, the state commission observed that LIC Housing Finance failed to produce any convincing evidence showing that the original documents had never been deposited with it.The commission noted that there was “nothing on record to show that the Appellant ever called upon the Respondent to deposit the original title documents or that any communication was made to this effect at any point of time.”The commission found that the lender’s denial of having the documents “appears to be an after thought and cannot be accepted,” given that its own certificate clearly established the documents were in its custody.“Loss of original title documents can seriously affect a property owner, as these documents are the main proof of ownership. Without them, the owner may face difficulties in selling, mortgaging, or otherwise dealing with the property, since buyers or financial institutions may be reluctant due to the risks involved,” the commission said.Observing that financial institutions are duty-bound to safely preserve documents entrusted to them, the commission held that “failure to do so amounts to a deficiency in service.”It found no illegality or irregularity in the district forum’s findings and upheld the direction requiring LIC Housing Finance to pay Rs 10 lakh compensation to the complainant.
