5 min readNew DelhiJun 16, 2026 09:57 AM IST
First published on: Jun 15, 2026 at 12:00 PM IST
The District Consumer Commission in Kerala’s Kozhikode has ordered IDBI Bank to pay Rs 10 lakh in compensation to a man after it failed to return his original property papers which were destroyed in a 2017 fire at a document storage facility, noting that the loss diminished the property’s value and caused hardship to the borrower.
A bench of president Priya S and member V Balakrishnan was hearing a plea of a teacher and an entrepreneur, who availed a housing loan of Rs 33 lakh in 2016 from IDBI Bank by depositing his original property deeds, including land and villa worth Rs 1.3 crore.
“We are of the view that there is unfair trade practice and deficiency of service on the part of the opposite parties. Also, the non-performing action of the opposite parties belongs to the deficiency in service and unfair trade practice of the opposite parties. So the opposite parties are directed to pay Rs 10 lakh to the complainant,” the court said on May 30.
‘Deficiency in service’
- The legal title of the complainant does stand compromised on account of the loss of original documents by the opposite party, the consumer commission held.
- Seeking compensation on the grounds of a deficiency in service is, therefore, a legitimate claim.
- The claim of compensation from the opposite parties is also legitimate since the original title deeds were in the custody under the terms of the loan provided by the opposite party bank.
Bank lost property papers in blaze
- The case originated from a complaint filed by a teacher and an entrepreneur against IDBI Bank Limited.
- He availed a housing loan of Rs 33 lakh in 2016 from the bank by depositing his original property deeds.
- He contended that the bank promised there would be no pre-closure charges and that the loan was only a short-term arrangement.
- EMIs were paid regularly from his wife’s account, along with additional lump sum payments.
- The man claimed that after his wife, the joint borrower and salaried member of the family, passed away in March 2020, he decided to sell the mortgaged property and close the loan.
- He cleared the dues in June 2020 by paying Rs 15.1 lakh, but the bank failed to return the original title deeds despite repeated requests.
- He alleged that instead, the bank kept delaying with excuses, first saying the documents were under closure formalities, then “misplaced,” then “lost in floods”, and finally admitting in November 2020 that the documents had actually been destroyed in a fire accident at the Stock Holding Corporation in December 2017.
Bank’s fault caused ‘heavy financial loss’
The complainant stated that this concealment, negligence and irresponsible conduct caused him heavy financial loss.
He claimed that he lost a lucrative sale deal, had to return the buyer’s advance by borrowing and pawning ornaments, and claimed that without original title deeds, the property’s market value (estimated at over Rs 1.3 crore including land and villa) is significantly eroded.
He further alleged that the bank failed to take basic steps, like filing a First Information Report (FIR) or publishing timely notices of loss, and only acted when forced by the banking ombudsman.
The ombudsman, in 2021, directed the bank to provide certified copies, issue a public notice, and pay Rs 60,000 compensation (Rs 50,0000 for deficiency, Rs 10,000 for delay).
The complainant accepted this amount under protest, calling it grossly inadequate, and approached the consumer commission seeking Rs 35 lakh in compensation for negligence, deficiency in service and unfair trade practice.
IDBI’s stand
Appearing for the bank, advocate A M Bhaskaran denied all allegations of negligence and argued that the complainant and his wife had executed a 20-year housing loan agreement, and there is no proof of any “short-term interim loan” arrangement.
He admitted the title deeds were lost in the 2017 fire at Stock Holding Document Management Services Ltd, where many banks and government institutions store vital records, but claim this was an unforeseen accident beyond their control.
The bank claimed that the banking ombudsman already adjudicated the matter and awarded Rs 60,000, which the complainant accepted without filing an appeal. According to them, the award was final and binding, making the present complaint unsustainable.
The man alleged that the bank initially said the documents were under closure formalities, then “lost in floods”, and finally admitting in 2020 that it had been destroyed in a fire. (AI-generated image) 
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