NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
C.L. Khanna … Complainant
Dena Bank … Opposite Party
HON’BLE MR. JUSTICE M.B.SHAH, PRESIDENT
DR. P.D.SHENOY, MEMBER.
For the Complainant : Mr. D.S. Narula, Ms. Vandana Miglani &
Mr. A.S. Narula, Advocates.
For the Opposite Party : Mr. Jos Chiramel and
Mr. L. Joshi, Advocates.
M.B. SHAH, J., PRESIDENT:
is for return
of the title deeds of the gifted property which were pledged
with the Bank as a simple mortgage. The
original title deeds were deposited on
It is the case of the Complainant that he
was the proprietor of Apee Industries,
52-A, Okhla Industrial Area,
It is contended that original title
deed which was pledged with the Bank as security was retained by the Bank. However, in 1978 the Bank on an alleged audit objection asked the
Complainant to furnish additional security.
Hence, the Complainant deposited title deed of his other residential property being property No.11,
As per the books of the Bank, the outstanding amount due from the Complainant was approximately Rs.1,00,000/- in both the accounts in the year 1985. The Complainant was prepared to pay the said amount on release of the aforesaid title deeds. Since the title deeds were not returned, the loan continued and complainant continued to make regular payments towards the liquidation of his liability.
Again the Complainant offered to the Bank by its letter dated 26.6.1989 for repayment of loan a/c on title deeds being returned. In spite of the repeated requests title documents pledged with the Bank were not returned. Complainant could not clear the outstanding and was forced to maintain the Loan A/c and paid the interest and instalments.
Despite this, Complainant was asked to pay Rs.1,48,534.90 by the Bank on 9.5.1995 which included Rs.1,29,158/- towards the interest from January 1985 to March 1993.
It is, therefore, contended that Bank acted fraudulently when it induced the complainant to deposit the papers of Bengali Market property as additional mortgage to fortify the alleged liability.
Again by letter dated
Complainant, therefore, approached the Bank Ombudsman and filed a complaint for deficiency in service and also for return of title deeds. By order dated 29.6.2001 the Ombudsman directed the Bank as under:
“we suggest the bank should comply in respect of above as under:
(1) Lodge FIR regarding loss of title deds.
(2) Give public Notice in the Newspaper regarding loss of title deeds.
(3) Bear the entire cost in this respect and help the complainant to get issued the duplicate title deeds.
Further the claim regarding compensation for harassment and mental agony and also waiving off the outstanding in loan account as claimed by you do not fall within the ambit of Banking Ombudsman Scheme, 1995 as such it has been rejected”.
It is the contention of the Complainant that as no compensation was awarded, and outstanding loan amount was not waived off, he had not agreed to the suggestion made by the Ombudsman.
It is the case of the Complainant that
non-availability or loss of original title deed of the free hold property had
resulted in reduced market
price of the property.
This has resulted because of the deficiency in service by the Bank.
For this purpose
he contended that complainant
is likely to suffer in disposing of the property without its original title deeds. As per his statement in the complaint no dealer was ready
in the property without the original title deed and for this he had produced letter dated
Previously, he has claimed more than Rs.6 Crores for the deficiency in service, however, prayer was amended and he has prayed as under:
(a) pass an award against the respondent for a sum of Rs.25,00,000/- towards the damages for loss of the title deed of property No.52A, Okhla Industrial Estate and Rs.5,00,000/- for mental agony and harassment suffered by the complainant;
(b) Bank be directed not to charge or claim interest on outstanding loan from the date when the Complainant offered to pay the Bank the outstanding loan, but there was failure on the part of the Bank to return the original title deeds;
(c) Bank be directed to return the original documents of property No11, Abul Fazal Road, Bengali Market, New Delhi which were given to it as an additional security; and
(d) Bank be directed to execute indemnity bond against any loss or damage that complainant may suffer because of the non-availability of the original title deeds.
Written Version of the Bank:
In written version filed before this Commission, it has been inter alia stated that:
(i) The respondent has reason to believe that complainant in a fraudulent manner took back the original title deed from Shri R.M. Gupta, Advocate and had made false allegation against the Bank regarding the loss of title deeds with mala fide intention. The Bank has come across several cases in which the said Advocate had returned the original title deeds held by the Bank as security for repayment of outstanding amounts to the borrowers or other interested parties and therefore the Bank has reason to believe that the complainant is party and privy to the fraud. This becomes relevant since the Advocate concerned collected the original title deeds of the property from the Bank as far back as on 24.1.1973 for purposes of search and issuance of non-encumbrance certificate, retained the same illegally for many years which was also admitted by him from time to time.
(ii) The alleged deficiency of service pertains to the year 1973 and as the complaint is filed in 2002, it is grossly time-barred. Long silence of the complainant speaks volumes for his complicity in the whole episode. Further, in the year 1978, Complainant handed over title deeds of another property as security for repayment of the loans availed by him, which he would not have done if the circumstances relating to alleged loss of previous title deeds were correct.
(iii) Title deeds were held by Mr. R.M. Gupta, Advocate who expired in the year 1992 and hence the Complainant ought to have sought the documents from him directly. In any case, heirs of the deceased Advocate were necessary and proper parties because till today the firm of M/s. R.M. Gupta & Co. is managed by his son Mr. Vijay Gupta, Advocate who had also dealt with the Bank during the life time of his father.
(iv) Return of the original title deed by Mr. R.M. Gupta is beyond the control of the Bank and cannot constitute deficiency of service or negligence on the part of the Bank.
(v) In any case the Complainant had not
suffered any damages on account of loss of title deeds as he was in a position
to obtain certified copy of the same from the office of the Sub-Registrar,
I. Whether the complaint is time-barred?
(a) From the facts stated above, it is absolutely clear that the Complainant delivered the title deeds of the property to the Bank for obtaining loan in 1973. It is also undisputed that on the basis of the pledge of the title deeds, the complainant received loan from the Bank. At no point of time the Bank had denied its liability to return the title deeds delivered by the Complainant. Therefore, it would be difficult to arrive at a conclusion that this complaint is time-barred. It is not the case that the loan transaction was squared up by the Bank and thereafter, at no point of time there was denial on the part of the Bank to deliver the title deed.
(b) Secondly, the Bank had never informed the complainant that as the title deed was lost, therefore they would not deliver it to the Complainant.
(c) On the contrary there is evidence on record by way of correspondence exchanged between the Bank and the Advocate Mr. R.M. Gupta with regard to the title deed delivered by the Complainant and request for its return.
We would refer the same in chronological order:
there is a letter
“Kindly refer to your letter No. OK/ PR-524/73 dated 19th January, 1973 sent by you along with the original title deed dated 16th August, 1957 being the Gift Deed executed by Smt. Dayawati Khanna wd/o of late Sh. Balkishan Das Khanna of Delhi in favour of Shri Chiranjiv Lal Khanna son of Shri Harji Mal Khanna of New Delhi as donee.
I have got the inspection of the necessary records made with the Sub Registrar Delhi and have also discussed the matter with Shri Chiranjiv Lal Khanna, the applicant for loan, who has stated that there is no charge or other encumbrance on the property i.e. land bearing Khasra No.1549/418 measuring 2 Bighas and 8 Biswas situated at village Bahapur (near Okhla Railway Station) New Delhi and that he is also ready to swear an affidavit to that effect and on the basis of the report regarding the scrutiny of the records at the office of Sub-Registrar and the affidavit of Shri C.L. Khanna, it is clear that the said property without any encumbrance and there is no registered charge on the same.
I am, therefore of the view that for the above said reasons, Shri C.L. Khanna has a clear marketable title in the said property i.e. piece of land bearing Khasra No. 1549/418 measuring 2 Bighas and 8 Biswas situated at village Bahapur near Okhla Rly. Station, District and Tehsil Delhi, without any encumbrance”.
(b) Thereafter there is another letter dated
“Kindly refer to the telephone talk that I had with you during the last week and your inquiry regarding the possession of the original title deeds of the party. I confirm that one original title deed i.e. gift deed dated 16th August, 1957 executed by Smt. Dayawati Khanna wd/o late Shri Balkishan Das Khanna, resident of Chhipiwara, Delhi as donor and Shri C.L.Khanna s/o Shri Harjimal Khanna relating to the piece of land bearing Khasra No. 1549/418 measuring 2 Bighas and 8 Biswas situate in Bahapur (near Okhla Station) District Delhi, is with me.
The necessary investigation has already been carried out and the report is also ready.
I will send you same the moment you want it.
My records also reveal that my bill of legal expenses and professional charges amounting to Rs. 550/- dated 17.4.73 remained unpaid. You are, therefore, requested to send me a cheque for the said amount without further delay”.
(c) Again there is a letter dated
(d) Then there is letter dated
(e) Again there is letter dated
(f) In response to the said letter Mr. R.M. Gupta replied to the branch manager by letter dated 1.11.1983 wherein it was asserted that the title deeds were delivered to the branch office long time back and that if further particulars were given certified copies could be obtained from the Sub-Registrar. The relevant protion of the letter is as under:
“Kindly refer to the discussion that our R.M. Gupta had with you some time back relating to the above case when he had told you that the papers referred to by you were not in our office and appear to have been delivered to you long time back.
However, it was further disussed that you would get us further particulars of title deed to enable us to get certified copies from the Sub-Registrar and other competent authorities.
Kindly treat the matter as urgent”.
(g) Thereafter on 14.1.1984 the Bank wrote a letter to Mr. R.M. Gupta for return of the title deeds.
(h) Again, letter dated 11.10.1988 was written by the Bank to Mr. R.M. Gupta for return of the title deeds because as per the Bank’s record the documents were still lying with the Advocates’ office.
(i) The next
important leter is dated
(j) It appears that without sending the amount, again a
request was made by the Bank by its letter dated
(k) Thereafter, there is a letter dated
(l) It appears that the aforesaid correspondence came to an end on 11.9.1993 and thereafter again a letter dated 4.4.1994 was written to Mr. Vijay Gupta, Advocate of R.M. Gupta & Co., for returning the title deeds as Mr. C.L. Khanna threatened to sue the Bank for not returning the title deeds.
(m) Again a letter was written on
From the aforesaid correspondence by the Bank with R.M. Gupta & Co., Advocates, it is clear that the Bank was trying to get back title deeds from them. At no point of time they had informed the Complainant that the Bank would not return the same to him. On the contrary, Bank had failed to take any action against R.M. Gupta & Co. for reasons best known to the officers of the Bank.
Thereafter, the Complainant approached
the Banking Ombudsman by writing letter dated
In response to the complaint filed by the Complainant before the Banking Ombudsman, the Bank replied as under:
“04. In the above circumstances equitable mortgage of the aforesaid property being No.52-A, Okhla Industrial Estate, New Delhi could not be created by deposit of title deeds thereof, and therefore the Complainant on 11.04.1978 handed over the title deeds of another property namely house No.11 (Plot No.178 Block No.205-C) owned by Shri Harji Mal Khanna situated within the Viceregal Estate, Delhi as security for due repayment of amounts due and outstanding from him to the Bank. This title deed is retained by the Bank as security for repayment of amounts outstanding from the Complainant from 1978 onwards.
05. In November 1984 the firm requested for enhancement of the credit facilities to execute orders on hand, and therefore the outstandings in Cash Credit Hypothecation and Term Loan were converted into Medium Term Loan of Rs.1,04,000/-, and fresh cash credit facility with a limit of Rs.25,000 was sanctioned to the Complainant. In the year 1987 the Complainant sought enhancement of the limit under the cash credit facility from Rs.25,000 to Rs.1,00,000 vide letter dated 24.09.1987, which request was acceded to by the Bank, which in June 1988 enhanced the limit under the cash credit facility to Rs.1,00,000 and sanctioned the renewal of Medium Term Loan of Rs.85,000.
06. The accounts of the Complainant fell highly irregular since 1993, and therefore the Bank has debited quarterly interest at the applicable rates in the cash credit and term loan accounts of the Complainant w.e.f. 01.10.1993.
The outstanding amounts as on 21.04.2001 in respective accounts of the Complainant are as under:
(1) Cash Credit Account (limit Rs.1,00,000)
(i) Ledger outstanding as on 21.04.2001 .. Nil
(ii) Interest from 01.10.1993 to 31.03.2001 .. Rs.1,03,607.00
(2) Term Loan Account (limit: Rs.85,000)
(i) Ledger outstanding as on 21.04.2001 .. Rs.1,48,534.90
(ii) Interest from 01.10.1993 to 31.03.2001.. Rs.2,72,230.00
The statements of account of the cash credit and the term loan accounts are enclosed herewith as Annexures’R-2’ and ‘R-3’ hereto”.
After hearing the complainant, the Banking Ombudsman passed the following order:
“In this connection, on careful scrutiny of the subject matter of complaint, we observe that since the original gift deed i.e. registered title deed dated 16.7.1957 executed by Smt. Dayawati Khanna in favour of you, was deposited with the bank and it was the bank who gave the title deed in question to the Advocate for obtaining non-encumbrance certificate and thereafter it was lost, as such bank is liable to assist to the complainant to get issued the duplicate title deed and also to bear the entire expenses in this regard. In the above noted meeting you had agreed for the same and as such in order to settle the case mutually we suggest the bank should comply in respect of above as under:
(1) Lodge FIR regarding loss of title deeds.
(2) Give public Notice in the Newspaper regarding loss of title
(3) Bear the entire cost in this respect and help the complainant to get issued the duplicate title deed.
Further the claim regarding compensation for harassment and mental agony and also waiving off the outstanding in loan account as claimed by you do not fall within the ambit of Banking Ombudsman Scheme, 1995 as such it has been rejected.
In case you agree with the above to settle the case in full and final settlement of complaint please give your concurrence in writing to the Bank as well as to this office to enable the bank to proceed further in the matter”.
To the aforesaid suggestion of the
Banking Ombudsman the complainant replied on
Thereafter, he filed complaint 26.2.2002 before this Commission.
From the facts stated above, it is abundantly clear that it cannot be said that the complaint is time barred because the Bank was also trying to get back the documents and return the same to the Complainant. At no point of time it had refused to deliver the same, to the complainant.
II. Learned counsel for the Bank further submitted that the nature of the title deed was not disclosed. In our view, this submission is without any substance. All throughout it had been stated that the document was registered gift deed executed on 16.8. 1957.
III. The learned counsel for the Bank further submitted that Complainant ought to have arrayed the Law Firm of the R.M. Gupta & Co. as party Respondent. In our view, if any action was required to be taken against R.M. Gupta & Co., it was for the Bank to take independent action and it could not be said that the R.M. Gupta & Co. was necessary or proper party to be arrayed as respondent in the complaint before this Commission because Complainant had no privity of contract with R.M. Gupta & Co. Further the Bank has filed an application dated 2.11.2002 for joining Mr. Vijay Gupta, Advocate (son of late Shri R.M. Gupta) as party. That application was rejected by order dated 10.1.2003 by this Commission. That order was challenged before the Supreme Court and the same was rejected. It appears that there was some dispute with the Advocate’s firm with regard to the payment of their professional fees and that had created this trouble. In any case it would be difficult for us to decide whether the Advocate was at fault or officers of the Bank were at fault in taking back the title deeds..
IV. Reasons for retaining title deed of property
Complainant was irregular in payment of the instalments of loan. He was in financial difficulty. He was compelled to approach the Bank very often for continuing credit facility and for not taking any steps against him. The relevant correspondence is as under:
(a) The Bank had written letter dated
“Please refer to our
letter No. OK: ADV: HCS: 74 dated
We once again request you to comply with the terms of the agreement and pay the instalments overdue to bring your above account in order. We hope will not compel us to take any extreme step which please note will be at your cost and risks. Please regularise your account on receipt of this letter”.
(b) The complainant by his letter dated
(c ) Complainant went on requesting the
Bank to increase the limits of the loan account and to give him further time
for payment of instalment and interest. On
(d) Again, Complainant wrote letter dated 24th September, 1987 to the Bank for enhancement of the present limit upto Rs.1,00,000/- and stated that the Bank would extend the desired help in rehabilitating the sick unit.
(e) Finally the complainant by letter dated 21st June, 1989, informed the Bank that he is ready to pay back the money outstanding against his term loan account if the original title was returned to him. Relevant part of the said letter is reproduced hereunder:
“The original Title Deed of the property has a very special sentimental value to me leave aside its legal aspect. I had been repeatedly saying that you take back your money in the Term Loan a/c and give me back my original Title Deed with which I could proceed with my other projects. The capital amount has already been paid off along with a part of interest thereon. The fact is that I am unnecessarily being burden with the interest amount on the money which I am holding back due to the bank’s failure in giving me back my Title Deed of the property”.
(f) The Complainant again wrote letter dated
“In the term loan account, against the limit of Rs. 50,000/- I had availed of Rs. 44,000/- and this amount has been repaid in the various instalments. It is the interest on the original amount which has multiplied in all these years which stands in my debit account. This is no fault of mine. The Bank is duty bound to return my original document and have the account cleared. I also had a limit of Rs. one lac in the Hyp. account of the unit which has since been cleared and C.C. a/c closed.
…….. I do not want to
continue any longer as a defaulter or debtor of the Bank. The amount standing on the debit side of the
Term Loan account should be waived off as it is on account of lapse on the part
of the Bank. I should be immediately
handed back my residential property document (lease deed of house No. 11,
A public notice in the press be issued by the Bank for the loss/ misplacement of the document.”
(g) The Complainant also wrote letter dated
my letter dated
V. Learned counsel for the Opposite Party thereafter submitted that the Complainant had not suffered any loss as he had sold or leased out the property owned by him at Okhla. In our view, for making this submission, there is no basis. It does not deserve any consideration.
VI. The next question is what compensation complainant is entitled to get for non-delivery of title deed of the property at Okhla.
From the facts stated above, it is clear that upto
1989 complainant was in financial
crisis. He was compelled to hand over title
deed of property No.11,
Learned counsel for the complainant
referred to the Statement made by the property dealer to the effect that the
value of the property would diminish if the original title deed is not
there. For that purpose he relied upon
“Sub:Industrial plot No.52-A, Okhla Industrial Estate, New Delhi-20.
Your above referred industrial plot is situated opposite 234, Okhla Industrial Estate, New Delhi-20 (belongs to M/s. Bharti Cellular Limited).
The 234, Okhla Industrial Estate, has been sold @ Rs.28,000/- per sq. yds. and cost of the construction shall be added extra.
The prevailing rates as per Income-tax under section 269 UD of the Income-tax Act, 1961, are accepting minimum Reserve rate Rs.27,000/- per square yards.
We may also offer from our prospective buyer Rs.28,000/- per sq.yads., but you will have to produce the ORINGAL TITLE DEED which stands in your name as a proof of the ownership.
Without the proof of ownership – you will not receive the right price for your property (52-A, Okhla Industrial Estate. But there shall be 35% loss without title deed.
Kindly make sincere and hard efforts to trace the original title deed of the said property”.
In our view, it would not be difficult to sell the property in a case of loss of registered gift deed if proper advertisement is given by the Bank that the original gift deed is lost by the Bank and that the property is free from any encumbrances. It cannot be held that the value of the property would be reduced by 35% in case of loss of title deed. Hence, it would not be proper to award compensation as claimed by the complainant.
VII. From the above discussion, it is established
that the Complainant handed over the title deeds of Okhla
property, to the Bank for taking loan from it.
The said title deed was handed over to R.M. Gupta & Co. for
verification. R.M. Gupta had given a
certificate that the Complainant was having clear marketable title in the same
property situated near Okhla Railway Station. The said title deed was not returned to the
Complainant. It is also established that
the Complainant was asked to deliver the title deed of his house situated at
(i) the Bank would not to charge any interest on the loan amount from June 1989;
(ii) to publish an advertisement in the newspaper as directed by the Banking Ombudsman with regard to the loss of title deed;
to return the
title deed of other property No.11,
(iv) the Bank shall pay compensation of Rs. 1,00,000/- to the Complainant for the aforesaid deficiency in service.
Order accordingly. In the result, the complaint is allowed to the aforesaid extent. Opposite Party shall pay costs quantified at Rs.25,000/-, to the complainant.