A Bengaluru consumer court has ordered CanFin Homes Ltd to return property documents to a borrower, C Sathyanathan, who had fully repaid his loan. Sathyanathan cleared a loan of INR 60 lakh in 2018, but the company failed to return his documents, citing an unpaid penalty. After reviewing the case, the court found CanFin Homes guilty of service deficiency and ordered them to pay compensation totalling INR 1.3 lakh, along with INR 100 per day until the documents are returned. The company has 45 days to comply with the court's directive.
A housing finance company in Bengaluru, which failed to return the title deed and other documents related to a property despite the borrower having repaid the loan, has recently been directed by a consumer court to return all the papers and pay compensation of over INR 1.3 lakh.
C Sathyanathan, 58, a resident of MSR Nagar in Bengaluru, had taken a loan of INR 60 lakh from CanFin Homes Ltd in September 2014 at an interest rate of 11.20% per annum to purchase a site for building a house. The loan was for a 15-year tenure, with a monthly EMI of INR 68,965.
He resigned from his job and, using all the funds he received from his pension and savings, settled the loan in 2018, as he wished to focus on other family commitments. He wrote to the company in September 2018, requesting the return of his property documents; however, the company did not respond.
After waiting in vain for a year, Sathyanathan approached the IV Additional District Consumer Disputes Redressal Commission in Bengaluru with a complaint against CanFin Homes, seeking relief. He stated that although he had settled the loan, the company had not returned the original documents of his property.
The company contended that the elderly gentleman still had an outstanding balance of INR 1.20 lakh as a penalty that needed to be paid. They further claimed that the borrower had breached the loan terms, which stipulated that he should buy a site and construct a house on it, whereas he had only purchased the site.
After reviewing all the documents submitted by both parties, the commission recently concluded that CanFin Homes was guilty of a deficiency in the service provided and had also failed to present adequate documentary evidence to demonstrate that the complainant still owed them money.
The commission instructed the company to return the original title deed and other property documents that the borrower had deposited while securing the loan. It also stipulated that the company must pay Sathyanathan INR 100 per day from the date of the order until all the documents are returned.
Furthermore, the court mandated the company to compensate him with INR 1 lakh for the deficiency in service, INR 20,000 for the mental distress caused, and INR 10,000 to cover litigation costs. The company has been allotted 45 days to comply with the order.
This case underscores the importance of accountability and transparency in the housing finance sector. It highlights that borrowers must receive their rightful documents upon loan repayment, and financial institutions are obligated to adhere to the terms of their agreements. The court's ruling not only addresses the specific grievance of C Sathyanathan but also serves as a reminder to all lending institutions about their responsibilities towards clients. As consumer rights gain prominence, it is essential for financial companies to prioritise service quality and adhere to legal obligations to maintain trust and credibility in the market.
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