Apex Court Stays NCDRC's Order Imposing ₹ 20 Lakhs Damages On Bank For Losing Title Deed To Fire, Expresses Concern

The Supreme Court on Monday expressed their shock at an order passed by the National Consumer Dispute Redressal Commission which had directed the IDBI Bank to pay an amount of Rs. 20 Lakhs to the complainants towards financial damages along with other expenses towards harassment and litigation expenses. 

While hearing the Bank's appeal, the Bench of Justice Dinesh Maheshwari and Justice Sanjay Kumar told the Complainant appearing on Caveat, "Asking for anything you want?". Justice Maheshwari orally observed, "I have got serious questions about how this kind of order would be passed. 20 Lakhs Rupees for what? Because the title deed is not available? It is said they are destroyed in the fire, but for that 20 lakhs? What are we doing?" and stayed the order passed by the NCDRC.

Senior Advocate Dhruv Mehta appeared for the appellant Bank while Advocate Devashish Bharuka appeared for the respondents. 

In the appeal before the Supreme Court, the Bank challenged the order passed by the National Consumer Dispute Redressal Commission, New Delhi. In the order passed, NCDRC noted that the Bank had failed to discharge its obligations towards the complainant and that the fact is not disputed that the bank had failed to return all the original title documents of the flat entrusted to them by the complainants.

A complaint was filed under the Consumer Protection Act, 1986 against the Bank on the ground that the Bank was guilty of deficiency in service in losing/destroying the original title documents of his residential flat which was deposited with the Bank for securing a home loan taken from the Bank. The Complainant alleged after the loan taken from the bank was settled, it failed to return the original documents and after several follow up informed that the title documents were destroyed in a fire.

The complainants had alleged that the Bank provided a certified copy of the Registered Sale Deed cum sublease deed but the loss of original title documents created a defect of permanent nature with regard to the strength of ownership and that for the advancement of the loan, the Banks are insisting for the original documents.

The NCDRC had found that there had been a deficiency in service and the loss to the complainant is therefore manifest, and that the absence of these documents would make it difficult for the complainant to sell his property. It had directed the bank to pay Rs. 20 Lakhs as financial damage along with Rs. 1 Lakh for harassment and Rs. 50,000 on account of litigation expense.

The Supreme Court upon considering the merits of the matter stayed the order of NCDRC. The Court noted that "Until further orders of this Court, the operation and effect of the impugned order dated 20.02.2023 in Complaint Case No.2218 of 2018 as passed by the National Consumers Dispute Redressal Commission shall remain stayed."

Cause Title: IDBI Bank Limited V. Binod Dokania & Anr. [Civil Appeal No(s). 3123/2023]

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