The Bombay High Court has directed the state-owned lender to pay a Mahim-based firm ₹ 5,000 per day from December 1, 2023, until it hands over certified copies of title documents that were lost while in its custody. MUMBAI: The State Bank of India (SBI) will have to bear daily compensation liability to compensate for losing a borrower’s original property papers.
The court also ordered SBI to reconstruct the documents, saying the bank cannot shift responsibility to a borrower for not immediately asking for their return. The court noted that original title documents are an important part of the chain of title and are generally required when a property is sold, mortgaged, transferred or otherwise dealt with. The order came on a petition filed by M/s In Vogue Creations, a Mahim-based partnership firm that had taken a loan from SBI’s Dadar commercial branch in 1979. The firm then approached the Banking Ombudsman, who on November 21, 2024, directed SBI to pay ₹ 1 lakh as compensation. The firm subsequently moved the high court, seeking legally acceptable certified copies of the documents and compensation under an RBI circular issued on September 13, 2023. The compensation will be calculated from December 1, 2023, when the circular came into force, until the certified copies are handed over to the firm.
It told the court that the absence of the original documents was affecting its ability to deal with the properties. Given the “admitted loss of the documents and the continuing prejudice caused to the Petitioner”, the court directed SBI to pay compensation at the prescribed rate.
