• Documents not returned by bank after repayment of loan

Ours is a Partnership concern with the Partners being Father, Mother, Son and Daughter In Law. We had taken a Term Loan of Rs 53 Lakhs from State Bank Of India in 2002. We had given security documents valued at Rs 2 Crore to them at that time. Along with interest the total amount came to Rs 100 Lakhs. The loan was classified as NPA.

State Bank Of India offered us a one time settlement on 24.12.2005 to pay the outstanding in instalments subject to atleast 25% of the amount of settlement being paid upfront and the balance amount of 75% being paid in instalments over a period of 1 year together with the interest at Bank’s PLR from the date of settlement till the date of final payment. So the interest component would be known only after repayment of the amount agreed between us.

As per the terms of the OTS we have repaid the loan before 30th June 2007 and in the Term Loan Account statement the term loan outstanding has been mentioned as Zero.

We had written a letter to the Assistant General Manager, SBI on 5.7.2007 that we have repaid the loan as per the OTS and since we have paid interest of Rs 53 Lakhs for a loan of 53 Lakhs to waive the interest which will be incurred and to  return the documents given as security. But we have not received any reply from them. We have also approached them in person many times but so far they have not intimated the interest that we have to pay or returned the  documents. The Father has expired in 2010 so no further follow up action was taken to get back the documents from the Bank.

What should we do now to get back the documents from State Bank Of India and can we claim any compensation from them. Can the Bank ask for interest now after nearly 8 years. They have never intimated to us the interest so far.
Asked 1 year ago in Civil Law from Coimbatore, Tamil Nadu
1) bank is bound to return the original documents after repayment of loan 

2) if bank is refusing to return original documents inspite  of repeated reminders file RTI application against the bank as to why original documents have not been returned 

3) you can also file writ petition in HC to direct bank to return original documents as loan with interest has been repaid 
Ajay Sethi
Advocate, Mumbai
23380 Answers
1227 Consultations
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1) the terms of OTS signed by you with bank would contain a clause that on repayment of loan all original documents lying with the bank of the borrower would be returned 

2) contact a local lawyer If inspite of reminders bank is not returning your original documents 

3) you can also file criminal complaint against the bank for criminal breach of trust if it has refused to return your originals 
Ajay Sethi
Advocate, Mumbai
23380 Answers
1227 Consultations
5.0 on 5.0
1. You should issue a lawyer's notice to the bank to seek their reply. A plain letter to the bank was never going to fetch you a reply. When lawyers issue a notice it is taken seriously.

2. If the bank does not either reply to the notice from your lawyer, or does not offer to return the documents, a lawsuit can be filed against it to recover the documents and also to claim compensation for the delay.

3. Interest cannot be claimed by the bank now.
Ashish Davessar
Advocate, Jaipur
18246 Answers
450 Consultations
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Dear Querist
if you have paid all the dues as per the terms and condition of OTS within time then the bank have to return your documents immediately after completion of full and final payment as per OTS, if they are not returning the documents then send a legal notice to them through your counsel and give them 15 days time if they do not return your documents within notice period then you may file a CIVIL SUIT before civil court.

Feel Free to Call
Nadeem Qureshi
Advocate, New Delhi
3537 Answers
130 Consultations
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1. The Bank will certainly ask for he interest for the last 8 years which yu should refuse to pay,

2. You should pay interest up to the period when you asked for the interest to pay off the same,

3. Lodge a complaint to the Bank's Ombudsman in his regard under copy to the Chairman, GM and Zonal Chief of the Bank seeking redressal.
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0
What should we do now to get back the documents from State Bank Of India and can we claim any compensation from them. 
You cannot approach consumer forum for instructing bank to return the document and also pay you compensation for their deficiency in service after a gap of over 5 years as on date because it is barred by limitation.  However after exhausting the remedies through letters to the chairman of the bank and banking  Ombudsman, you may approach civil court with a suit for mandatory injunction against the bank asking the court to direct the bank to return the documents and also a compensatory amount due to the mental agony and pecuniary loss owing to the bank's irresponsible and negligent attitude. 


Can the Bank ask for interest now after nearly 8 years. They have never intimated to us the interest so far.
Bank cannot claim interest on it for no reason especially when the loan account is closed after discharge of entire loan amount.
T Kalaiselvan
Advocate, Vellore
14158 Answers
128 Consultations
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1) you can send regd letter to bank seeking return   of original documents and claim compensation 

2)you can complain to banking ombudsman 

3)you can claim compensation for failure of bank in returning documents 

4)you would be liable to comply with terms of OTS 

5) request bank to calculate interest if any payable by you . 

6) you can file writ petition in HC to direct bank to return your original documents if loan has been repaid by you 
Ajay Sethi
Advocate, Mumbai
23380 Answers
1227 Consultations
5.0 on 5.0
1) Yes,

2) Yes, you may approach Banking Ombudsman,

3)Yes, you can file a suit claiming compensation fo mental agony and physical fiscal losses. 

4) Bank cannot ask the same at this stage, if it demands, do not make any commitment in writing because they may bring back the limitation.


5) Get this reply in writing from them and afterwards you can approach the Consumer forum for this reason with which you can combine your other issues also as other reliefs. 
T Kalaiselvan
Advocate, Vellore
14158 Answers
128 Consultations
5.0 on 5.0
1. These letters and complaints to Branch Manager and Ombudsman are not going to work. I gave you a practical and legally efficacious solution i.e to issue a lawyer's notice.

2. As I said earlier, interest cannot be claimed by the bank after 8 years. 
Ashish Davessar
Advocate, Jaipur
18246 Answers
450 Consultations
5.0 on 5.0
1. Yes, send the said letter to the Branch Manager under copy to the Zonal Manager. Head Office,

2. If Bank fails to reply or act, file a complaint to the Ombudsman as suggested in my earlier post,

3. Yes, you can file  complaint case alleging deficiency in service and unfair business practice claiming immediate refund of the documents, damage and cost,

4. Yes, your stand is that you had asked for the interest amount to make payment which the Bank has not informed you despite your repeated requests and for this reason you should not pay the interest,

5. Add this fact in the plaint of your consumer case.
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0
1) on clearance of bank dues you dont need bank consent for transfer of property in name of third parties

2)in your case father has executed regd settlement deed in your favour . you would be absolute owner of the property 

3) in your case bank has been grossly negligent in return of original  documents . although agreement provided 15 days bank did not return documents for 9 years 

4) you can file complaint before consumer forum against the bank for deficiency in service and seek return of original documents and seek compensation 

5) complain to bank ombdusman also for return of original documents only 
Ajay Sethi
Advocate, Mumbai
23380 Answers
1227 Consultations
5.0 on 5.0
Our account was also transferred to a different Branch without intimating us. The property documents have also been sent to a different branch without intimating us and the branch also did not know about the whereabouts of the documents. Since the Bank has failed on all these accounts can we claim deficiency in service.
This action of bank is a gross deficiency in their services to the customers. The bank can be taken into task for this through consumer forum. For this you have to create a documentary evidence by sending a legal notice to the bank and make them receive it by sending the same by RPAD and secure the AD card if they do not reply. 
This legal notice is to be issued on behalf of the legal heirs of your father.
The registered settlement deed no doubt has been made by your father after clearing the entire loan with the bank but how did he do it without the original title documents? If he has not received the title document from the bank even after fully discharging the entire loan amount, what action did he initiate to procure the same from the bank, whether he sent any communication to the bank, whether thy given any reply, do you have any evidence to support your claim, did he send any legal notice to the bank?
Whether you took any action to recover the original title document after getting the registered settlement deed executed in your favor?
The fault in your side is that without the bank re-assigning the property properly to the borrower after receiving entire loan amount with interest nor having accorded any permission by the bank to the borrower to transfer the property to a third party in the meantime as an interim measure, the transfer cannot be binding on the bank therefore as fr as the bank is concerned it can return the title documents to the title holder alone which may e the borrower or upon his death to his successors/legal heirs.  But the bank has no excuse to the inordinate delay in returning the documents, they are answerable in the consumer forum for this deficiency in service to their customers.
Even now you can send a legal notice demanding the return of the original title documents held by them, make them to commit in writing the requirement of legal heirs to apply for it, then all the legal heirs can issue another legal notice seeking compensations for the deficiency in service as well as for the metal agony and subsequently file a consumer complaint case with the consumer forum.






When the property had already been transferred to my name before expiry of my father why should I get a legal heir certificate?
since the bank has not returned the title documents to the borrower after discharge of loan amount, it cannot return the title document to a third party, the legal heirs are the proper persons to receive them, because this transfer was not intimated properly to the bank by your father during his life time. 





Or should I complain to the ombudsman only for return of the property documents and claim compensation from the consumer forum. Should this fact be intimated to the ombudsman.
Moving Banking Ombudsman with a complaint against the bank's atrocious act will help you to exhaust the remedy. The Ombudsman will not provide you any relief nor it will fetch you any benefit.  They have their own restrictions and they may not be able to impose compensations due to their internal constraints.
You have remedy only with consumer forum, so decide about next course of action accordingly. 
T Kalaiselvan
Advocate, Vellore
14158 Answers
128 Consultations
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1. As per law, your father can not deal with the mortgaged property till the mortgage is cleared/released by the Bank,

2. It is a different fact that the Bank has illegally delayed release of your father's mortgaged property to him,

3. Hence, the execution and registration of the gift deed by your father in your favour during the pendency of the mortgage, is illegal and void at law,

4.This is the reason why they are asking for legal heir certificate to hand over the documents of your deceased father's property to his legal heir,

5. Collect a legal heir certificate from your local tehshilder and get rid of this problem.
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
5.0 on 5.0
You should seek Succession Certificate from the court to get the document of title of your deceased father. Legal heir certificate is not required in your case. If even after the production of Succession Certificate the bank does not release the document then file the suit as mentioned before.
Ashish Davessar
Advocate, Jaipur
18246 Answers
450 Consultations
5.0 on 5.0

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