What to do if bank has misplaced the original documents?: Procedure and Remedy Available
There are times when a customer takes a loan from the Bank and the concerned bank loses the original documents. At times, such a negligent act has been deferred by bank and they do not accept their responsibility and liability with respect to the same. In these circumstances, the distressed customer is left vulnerable and defenseless. However, proper and timely actions could be taken in order to retrieve the damage caused and halt any further damage in this scenario. Bank must not get away with such an irresponsible and negligent act, and the customer must act diligently. The steps with respect to the procedure and inculcation of remedy has been enlisted as herewith. Furthermore, the article has been purported with relevant judgments.
Procedure & Remedy for Distressed Customers
Step 1- Do not accept any original documents or paper, if it is not complete. Make sure you accept them only if all the original documents are being handed over to you.
Step 2- Do not sign any acknowledgement.
Step 3- Register written complaint with bank about your original documents being lost by them.
Step 4- Register a F.I.R against bank to the nearest police station.
Step 5- Submit the copy of F.I.R to the bank and have the acknowledgment of the same being received by the concerned person.
Step 6- Submit the court affidavit stating that the bank has lost the original documents to the registrar of the housing society and this will assure that there will be no future fraud.
Step 7- Insure that the bank will provide the publication of the lost original documents in the two newspaper(1 in English and the other in the local newspaper).
Step 8- Bank will now issue an indemnity bond on a stamp paper stating therein the original documents are lost and make sure all the above details are mentioned therein i.e. detail of property, details of F.I.R. and details of the publication of the newspaper. Indemnity bond must be attest and being notarized.
Step 9- Request for duplicate share certificate from the housing society in an application which clearly states the original documents are lost along with a police F.I.R.
Step 10- Bank will later on provide you with the certified copy of the original documents by depositing all the above stated documents to the Registrar. Make sure bank will do it and be in touch with the bank. Once all the above stated steps are done and now you will be having all the papers of certified copy of the original documents.
Step 11- Request for the latest Encumbrance certificate from the Registrar. To make sure everything is fine.
Step 12- File a complaint against the bank to the Consumer Court praying for compensation and in such cases the court rules in favour of the consumer.
Recent Judgments: Position of Customer and Bank
The customers have time and again approached the National Consumer Disputes Redressal Commission for claiming the costs for damages and remedy thereof. In the case of Ebrahimkutty vs Secretary Manager (25 November, 2013), the National Commission observed that if a document is misplaced, there is a possibility that it could be recovered at later stage. However, If it is lost, then the question of recovery does not arise.
It is apposite to state that the Commission observed that even in the affidavit filed by the bank, it had denied the original title deed was lost, and had asserted that an assurance has been given that it would be returned as soon as it was traced. In relation to this, the Commission noted that the loss of the title deed would affect the value of the property, so Ebrahimkutty, the petitioner woud be entitled to be compensated. Accordingly, by the order of February 20 delivered by Dr B.C Gupta for the Bench along with Dr. S.M Kantikar, the National Commission held the bank guilty of deficiency in service. However, the compensation of Rs.10 lakhs which had been awarded by the state commission was considered to be quite high and hence, the National Commission modified the order and reduced the compensation to Rs. 5 lakhs. The said amount was to be paid within four weeks, or along with 12% interest in case of any delay on behalf of the respondent bank. It was held that the bank is liable to compensate a consumer for loss of documents in its custody.
It is pertinent to mention the recent landmark judgment of State Bank of India Vs Amitesh Mazumdar (RP No 2732 of 2019), decided on Jan 3, 2020 wherein the National Consumer Disputes Redressal Commission (hereinafter referred as ‘NCDRC’) upheld the orders of the lower consumer courts, thereby awarding the consumer Rs.5 lakh as compensation and Rs.30,000 as costs for damages. Further, the Commission also upheld the directions of the lower consumer courts concerning the bank to file an FIR and directed to issue notice for loss of the documents in three newspapers.
Any wrong on behalf of the company, entity or organisation must be duly borne by the officials. The innocent customers or consumers must not be left unattended and in a position of stressful acclaims. With respect to the present proposition, the remedy for such damages must be given to the customer, and the banks, in case of any negligence, must wholly and fully be liable for such negligence. It is pertinent to mention that at times, in certain cases the customer tries to conceal the material facts and tries shifts the burden for misplaced documents. In such cases, the adjudicating authority must dig deeper into the facts, circumstances and the evidences as provided by both the parties. The evidences and causal effect must be properly scrutinized and examined before considering the stance in favor of any party. Therefore, the pursuit of ‘checks and balances’ must be taken into consideration, followed and apprehended thereof.