Things to do if the financial institution loses the authentic sale deed of a property


A domestic loan borrower must at once attain an acknowledgment in writing from the bank that the sale deed has been lost. The letter has to endure the seal and signature of the financial institution officers. A few weeks ago, the Maharashtra State Consumer Disputes Redressal Commission penalized an overseas financial institution for dropping the original sale deed of a property owner in Mulund, who changed into not promoting the condo in the absence of the files. The bank became made to pay Rs 1.15 lakh compensation to the assets proprietor, who took a mortgage of Rs 9 lakh and repaid it. The commission also ordered that the documents be surpassed over to the asset owner within three months and that failure to accomplish that could invite a monthly compensation of Rs 50,000.

Those looking for a home loan must be aware that while borrowing the quantity from a financial institution, the belongings owner must deposit collateral security to protect against default in reimbursement. One of the unusual forms of protection is depositing the property and identifying the deed with the bank until the mortgage is repaid. What happens if the bank loses the name deed and cannot return it after repaying the mortgage?

Sunil Tyagi of Zeus Law, a corporate industrial regulation company, one whose areas of specialization are real estate transactional and litigation work, is of the view that in case a purchaser is knowledgeable through the bank that the original identify file deposited using the customer with the bank has been lost, he has to obtain an acknowledgment to the effect from the involved financial institution in writing. The consumer must also insist that the bank record a grievance with the police concerning the lack of original name documents and offer a replica of the equal to the purchaser.

In case the financial institution does not provide such an acknowledgment in writing. The purchaser should check in a written criticism with the financial institution, mentioning the info of the files submitted through him and the information of authentic documents that the financial institution has lost. Acknowledging the same from the bank aggrieved customer can also technique the banking ombudsman or consumer courtroom to seek redressal.

“To be sincerely positive of whether or not the bank has lost the file, get that intimation in writing from the lender. The financial institution executives can also inform you verbally about it. But you better insist they present you with a respectable letter about the loss. The letter should undergo a seal and signature of the position bank official,” advises Rishi Mehra, CEO of Wishful and founding father of Deal4loans.

After receiving a communication from the financial institution that the original sale deed is lost, the client has to document a police complaint stating the loss of the record. “Wait for two weeks or so to see if someone returns the document to you. You need to preserve a copy of the grievance and a copy of the clicking clippings as proof of the record loss,” he advises. He should also remember getting the loss published in the leading information dailies, even though it may cost a little ₹3,000 to ₹30,000.

At the time of taking the mortgage clearance certificates from the bank at the same time as ultimate the loan, a purchaser should take a selected acknowledgment in writing from the financial institution that the original files submitted to the financial institution had been ‘lost’ or ‘misplaced’ by using it. It can be noted that there may be a satisfactory distinction between ‘misplaced’ and ‘lost.’

The phrase ‘misplaced’ conveys that the file continues to have the financial institution but has been wrongly located and can be recovered later. However, the word ‘misplaced’ means that the files are no longer in the financial institution’s possession.

“In numerous instances, it’s been held that the problem length for the purchaser to the method the courts would commence from the date the financial institution has recounted that the documents had been misplaced. However, in instances of acknowledgment by the bank that the files were misplaced, the cause of movement continues with the customer to technique the courtroom,” says Tyagi.

The aggrieved consumer whose unique name files have been lost using the financial institution may technique the purchaser court having jurisdiction after the bank knows him that the authentic name files of his assets have been misplaced or misplaced through the bank.

“The patron ought to connect all of the documents for helping his claim against the financial institution, which include the acknowledgment issued with the aid of the financial institution regarding the loss or misplacement of title documents, complaint filed via the purchaser with the bank, copies of all loan files, acknowledgment/ receipt of a deposit of title files and so on,” explains Tyagi.

The financial institution usually compensates its customers according to their compensatory coverage for losing an authentic report. However, in numerous instances, courts have awarded compensation to the client for the loss of original documents using the financial institution deposited with it by the customer.

The proprietor of immovable assets needs to apply to the worried registrar’sworkplace (wherein the original document became registered) to obtain the true copy of the written record by making the charge of the applicable rate. After scrutiny of his utility, the licensed actual replica is issued.

“Courts have held in diverse cases that the bank is responsible for misplacing/ losing the original files and has directed the bank to undergo the charges for acquiring the certified true copies and also assist the owner for acquiring such certified authentic replica,” says Tyagi.

Mehra says that the value of having an authorized reproduction of the unique sale deed from the registrar’s workplace is normally around ₹500. “You can also get land revenue statistics at these workplaces and test your private home possession. Another alternative is to get a reproduction of the sale seed from the builder with whom you could have inked a deal for the property,” he says.

Courts have, in diverse cases, held the bank answerable for misplacing/ dropping the original documents and have directed the bank to endure the cost of acquiring the certified real copy. Usually, no Affidavit cum Indemnity Bond is given by the financial institution as reimbursement is paid by using the financial institution for misplacement or lack of unique documents deposited by using the consumer with the bank.

According to Mehra, you can wish you got an ACIB from a bank if the unique property files are misplaced in its custody. The cause is that by issuing an ACIB, the bank would decide to compensate clients for the loss precipitated by appreciating the assets. Practically speaking, however, the probabilities of ACIB issuance from the financial institutions’ stops are minimal.

“You may additionally fail to sell or promote the assets at a price underneath the marketplace fee, within the occasion of losing unique files. The customers’ technique to sell the assets could haggle over the loss of the documents, making you compromise for a discounted price. The quantity of compensation may be loads extra, so the financial institution might not issue ACIB,” says Mehra.

The quantum and entitlement of repayment for the mental pain depend upon the discretion of the purchaser court. In a current judgment, the National Commission had directed the bank to pay a reimbursement of Rs 5 lakh to the consumer whose original title documents were lost with the aid of the financial institution. However, no specific refund for intellectual agony has changed in the present.