Hyderabad, 31 July
SBI Fined Rs 3.20 Lakh After Losing Customer’s Original Property Documents in Hyderabad
SBI Fined Rs 3.20 Lakh After Losing a customer’s original property documents submitted as collateral for a home loan, following an order by the Ranga Reddy District Consumer Disputes Redressal Commission. The Commission found the State Bank of India guilty of negligence and deficiency in service after it failed to return the original documents despite the borrower clearing the entire loan amount.
The Commission directed the bank to pay Rs 3 lakh as compensation and Rs 20,000 towards litigation expenses, taking the total penalty to Rs 3.20 lakh.
Home Loan Borrower Sought Original Documents After Repayment
The case involved B Venkatesham, who had taken a Rs 5 lakh home loan from the Aditbala branch of the State Bank of India. As security for the loan, he deposited the original sale deed and other property documents related to a 194-square-yard plot in Bairamalguda, owned by his relative M Anjaiah.
After repaying the entire loan and obtaining a No Dues Certificate in March, Venkatesham approached the bank to collect his original property documents. However, the bank informed him that the documents had gone missing.
The incident led to the case in which SBI Fined Rs 3.20 Lakh After Losing important collateral documents became a significant consumer rights issue.
SBI Handed Over Certified Copies Instead
Instead of returning the original property papers, SBI provided Venkatesham with certified copies and informed him that a police complaint had already been filed regarding the missing documents.
Unsatisfied with the bank’s response, Venkatesham filed a complaint before the Ranga Reddy District Consumer Disputes Redressal Commission, alleging negligence in safeguarding the documents submitted as loan security.
The Commission examined the matter after SBI Fined Rs 3.20 Lakh After Losing the original property records became the central issue of the dispute.
Consumer Commission Rejects SBI’s Defence
During the hearing, SBI argued that the property belonged to M Anjaiah, not Venkatesham, and therefore he was not entitled to receive compensation.
The Commission rejected this argument, observing that the home loan account was in Venkatesham’s name and that he had legally deposited the documents as collateral for the loan. Therefore, he had every right to seek the return of the original property papers after repaying the loan.
The Commission further held that the bank failed in its responsibility to safely preserve the customer’s documents, making SBI Fined Rs 3.20 Lakh After Losing a clear case of deficiency in service.
Commission Orders SBI to Pay Rs 3.20 Lakh
After reviewing the evidence, the Consumer Commission held SBI responsible for negligence and directed the bank to pay:
- Rs 3 lakh as compensation
- Rs 20,000 towards litigation costs
The order serves as a reminder that banks are legally responsible for protecting original property documents deposited by customers as loan collateral.
The ruling in which SBI Fined Rs 3.20 Lakh After Losing original property documents also highlights the importance of accountability in banking services and strengthens consumer rights for borrowers across Telangana.