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In a ruling by the Orissa High Court, a nationalised bank in Cuttack was directed to pay a compensation of INR 1 lakh to a 70-year-old man whose mortgaged property papers were not returned even 14 years after he repaid his loan. The man had repeatedly contacted the bank, both through personal visits and letters, to retrieve his documents but to no avail. Justice S.K. Panigrahi condemned the bank's casual approach, noting that the loan had been repaid and the property's title deed was no longer needed. The court ordered the bank to return the documents within a month and pay the compensation within 30 days.
The Orissa High Court has instructed a nationalised bank in Cuttack to compensate a man with INR 1 lakh after it was revealed that the bank had failed to return his mortgaged property papers, even 14 years after he had repaid his loan. Advertisement
Justice S.K. Panigrahi issued the order earlier this week in response to a case filed by a 70-year-old man. The petitioner had claimed that despite his numerous attempts to retrieve the original documents, including several personal visits and countless letters to the bank, his efforts were unsuccessful.
The elderly man had requested the court's intervention, seeking a daily compensation of INR 5,000 from December 24, 2010, the date on which the "No Due Certificate" was issued, due to the delay in the return of his mortgaged papers. Justice Panigrahi described the bank's response as "very casual," pointing out that the loan had been fully repaid, and the bank's interest in the mortgage had been cleared. Therefore, the property title deed was no longer required by the bank.
In the November 8 ruling, Justice Panigrahi stated that the bank had been evasive with the petitioner and instructed the bank to promptly return the original or duplicate documents within one month. He also directed the bank to pay INR 1 lakh as compensation within 30 days of receiving a copy of the judgment, considering the difficulties faced by the petitioner due to his advanced age.
According to the case details, the petitioner had taken a loan of INR 72,000 from the bank in 1986. When he struggled to make timely EMI payments, the loan was classified as NPA. However, the outstanding dues were settled under the one-time settlement (OTS) scheme on July 26, 2010, for INR 1,06,337, which the petitioner paid on time.
The bank had argued that the mortgaged documents could not be returned because the account was classified as NPA, and legal proceedings were ongoing in the local court. However, Justice Panigrahi ruled that once the loan was settled, there was no valid legal reason for the bank to withhold the title deed, regardless of the pending litigation. Therefore, the refusal to return the documents was deemed unjustifiable.
The Orissa High Court's ruling has highlighted the importance of banks fulfilling their responsibilities towards customers, particularly when it comes to returning mortgaged property documents once a loan is repaid. The court's decision to award INR 1 lakh in compensation underscores the severity of the bank's delay and mishandling of the situation. It also serves as a reminder to financial institutions to act promptly and responsibly, ensuring that borrowers' rights are respected and that such issues do not remain unresolved for extended periods. The judgment has set a precedent for future cases involving similar grievances against financial institutions.
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