Home Loan Documents Lost: Many people take home loans from banks to fulfill their dream of owning their own home. When they hope to get the original documents of the rightful home in their hands after paying off the loan installments, a shocking incident has come to light that the bank has lost those documents. However, the consumer court has given a very historic and landmark decision at the national level in this matter. Putting a stop to such negligence of the banks, the court has given a verdict in favor of an aggrieved customer and has imposed a hefty fine of Rs 15.5 lakh on the concerned bank.
What is the real issue?
A customer had taken a home loan from Axis Bank. As per the rules and within the stipulated time, the customer returned the entire loan amount along with interest to the bank. After the loan account was completely closed, the customer asked the bank to return the original sale deed of his house and other important documents. While the bank is legally bound to keep these documents safe, it turned out that they had lost them. After not getting a proper response from the bank administration and only getting toll-free answers like ‘we are looking for the documents’, the aggrieved customer finally knocked on the door of the Consumer Disputes Redressal Commission. Home Loan Documents Lost
The court’s important argument
Taking serious note of this matter, the consumer court took a strong view on the bank’s management. The court clarified very important points while giving its verdict.
- Missing customer documents at the bank is a gross negligence and serious error in banking service.
- Even if the buyer owns the house, unless the original documents are in hand, there is always a shadow of doubt over the ownership of the property in the future.
- Without the original documents, the customer cannot sell their house in the future or take out another loan on it. This significantly reduces the market value of the property.
- The court directly ordered the bank to pay Rs 15 lakh 50 thousand to the aggrieved customer as compensation for the immense mental anguish caused to the customer, the cost of the legal battle and the loss caused due to the absence of documents. Home Loan Documents Lost
What to do if something like this happens to you?
If any bank delays or loses the original documents after your home loan is disbursed, you can take important steps as per the rules of the Reserve Bank of India (RBI) and consumer courts…
- Make a written note of all the documents you will receive from the bank once the loan is complete and when you will receive them.
- Do not sign any bank closure receipt stating ‘All documents received’ until you have all the original documents deposited with the bank safely in your hands.
- If the bank admits that the documents are lost, immediately go to the nearest police station and file a formal FIR regarding the loss of the documents.
- Obtain a certified copy of the sale deed of that property and ‘Index-2’ from the Sub-Registrar’s office at the full cost of the bank.
- As per the new RBI rules, if the bank does not return the documents within 30 days of the loan being disbursed, the customer is entitled to a delay penalty of Rs 5000 per day. If the bank is evasive, file a complaint directly in the consumer court. Home Loan Documents Lost
This decision of the consumer court is a great relief for crores of home loan holders in the country and a big slap in the face for banks. Banks collect penalty from customers if a loan installment is late, but show negligence while handling documents of customers’ property worth crores. With this historic verdict, banks will now have to take the security of customer documents more seriously and common citizens will be aware of their rights. Home Loan Documents Lost