Banking / Title Documents · F2J-C-2836
M/s In Vogue Creations v. State Bank of India
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Holding (ratio)
A borrower that repays a loan is entitled to expect the bank to safeguard and return the original title documents and to compensate for a negligent loss.
Operative order (extract)
Operative result (reconciled to the final order): Petition allowed; compensation and title-reconstruction directions issued.
Scope limits
The decision is confined to the issues decided on the retained record; verify the complete judgment and subsequent history before reliance.
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Complete searchable judgment text
2026:BHC-AS:36037-DB CNR No : HCBM010265292025
bdp
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.10241 OF 2025
M/s. In Vogue Creations ]
A Partnership Firm registered under ]
the provisions of Indian Partnership ]
Act, 1932 which was initially, a ]
Propriety Firm, through its partner ]
Mrs. Achala Sudhakar Joshi, Age-78 ]
years and having its office at C-11, ]
Asavari, 214,Veer Savarkar Marg, ]
Mahim – 400 016 ] …. Petitioner.
Vs.
State Bank of India, ]
having its office at Commercial ]
Branch, Bullet Building, Napoo ]
Road, Opp. Raja Shivaji Vidyalaya, ]
Hindu Colony, Dadar (East), ]
Mumbai – 400 014 ] ….. Respondent.
Mr. A. M. Saraogi a/w Mr. Prajot H. Jaggi, Mr. Prashant J. Rai
and Ms. Amrita Singh, Advocates for the Petitioner.
Mr. Bidan Chandran (through VC) a/w Ms. Nukshinaro i/b M.V.
Kini and Co., Advocates for the Respondent.
CORAM : RAVINDRA V. GHUGE, ACJ &
GAUTAM A. ANKHAD, J.
RESERVED ON : 28TH AUGUST, 2026.
PRONOUNCED ON: 2ND SEPTEMBER, 2026.
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JUDGMENT: (Per Gautam A. Ankhad, J.)
1. The Petitioner has filed the present Petition seeking,
inter alia, directions against the Respondent-Bank to compensate
it for the loss of the original title deeds deposited with the
Respondent and for the consequent failure to furnish legally valid
certified copies of the lost documents, together with all necessary
endorsements.
2. The facts relevant for the adjudication of the present
Petition are, briefly, as follows :
(i) By Agreements dated 4th December, 1973 and 3rd
August, 1978, the Petitioner purchased Units/Gala Nos. 317 and
318 situated at Bussa Industrial Premises Co-operative Society,
Century Bazar Lane, Prabhadevi, Mumbai – 400025 (“First
Property”).
(ii) On 26th July, 1979, the aforesaid Agreements, along
with the share certificates, were deposited by the Petitioner with
the Respondent at its Commercial Branch, Dadar, Mumbai –
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400014, as security for loan facilities extended to the Petitioner.
(iii) On 22nd March, 1979, the Petitioner executed a
registered Lease Agreement and obtained an allotment letter from
M.I.D.C. in respect of the plot situated at W-154, Taloja,
M.I.D.C., Panvel – 410208 (“Second Property”). The Lease
Deed was also deposited with the same Branch of the
Respondent-Bank as security for the credit facilities.
(iv) The loan facilities were disbursed by the Respondent
in 1979 and were repaid in full by the Petitioner on 28 th August,
2003. This is confirmed by a No Dues/No Claims Certificate
issued by the Respondent on 27th July, 2023. The Respondent
also confirmed that it does not have any claim or mortgage over
the properties. However their original title documents were not
returned to the Petitioner.
(v) By their letters dated 5th and 7th December, 2023, the
Respondent acknowledged to Bussa Industrial Premises Co-
operative Society and M.I.D.C, that it was unable to locate the
title documents of the respective properties. The Respondent
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called upon the Society and M.I.D.C. to issue certified/true copies
of the title documents to the Petitioner.
(vi) On 14th January, 2024, the Petitioner published a
newspaper advertisement and lodged a complaint with the Dadar
Police Station regarding the loss of the original documents. The
Petitioner also filed a complaint before the Banking Ombudsman-
Reserve Bank of India. On 21st November, 2024 the Banking
Ombudsman by an Advisory advised the Respondent to pay
compensation of Rs.1 lakh to the Petitioner. The Petitioner
declined to accept the said amount. Nevertheless, the Respondent
deposited the amount in the Petitioner’s account on 22 nd
November, 2024.
(vii) On 15th March, 2024, the Respondent once again
acknowledged that it had been unable to trace the original title
documents. The Respondent thereafter lodged an FIR with the
local Police Station and published advertisements in two
newspapers notifying the loss of the original title documents.
Insofar as the Second Property is concerned, the Respondent
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stated that the Regional Office of M.I.D.C., Khanda Colony,
Panvel, had issued true copies/photocopies of certain documents,
which were thereafter handed over to the Petitioner. The
documents furnished were as follows:
Sl.No Title of the documents Nature
1 Allotment of Shed in Plot No.W-154(E), vide True Copy
letterNo-MIDC/Sheds/TIJ/154 (E)/4054 dated
29.03.1979
2 Lease Agreement dated 22.03.1979 True Copy
3 Possession Receipt dated 30.12.1981 True Copy
4 Challan Receipt No.DV00218011162 dated Photo Copy
27.02.2024, for True copy charges
5 Letter of MIDC Panvel vide No.I/46882 dated Photo Copy
13.03.2024 regarding issuance of True Copy
wrt Plot No-W-154(E).
6 On Line FIR dated 14.01.2024. Photo Copy
7 News paper clipping dated 19.01.2024 of Photo Copy
Business Standard and Mumbai Lakshya
Deeps
8 No claim certificate dated 03.02.2024 by Adv Photo Copy
Rajan Pillai
(viii) The Petitioner contends that the aforesaid documents
constituted an incomplete set and that the Respondent had failed
to disclose or address the fact that stamp duty had been paid by
the Petitioner in respect of the properties. In 2024-25, the
correspondence continued between the parties and the Petitioner
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repeatedly continued to call upon the Respondent to trace and
return the original title documents, particularly since the
Petitioner intended to sell both the properties.
(ix) Aggrieved by the failure of the Respondent to locate
the original title deeds and pay compensation under Circular dated
13th September, 2023 on “Responsible Lending Conduct – Release
of Movable/Immovable Property Documents on
Repayment/Settlement of Personal Loans” issued by the Reserve
Bank of India (“Circular”) the present Petition has been filed.
3. Mr. Saraogi, learned counsel for the Petitioner,
submits that the loan facilities are fully repaid and no dues
certificate has been issued to the Petitioner. The loss of original
title documents is admitted by the Respondent in correspondence
and also in its affidavit dated 23rd September, 2025 filed in these
proceedings. He submits that the loss of the original title
documents has caused and continues to cause, serious prejudice to
the Petitioner, since the Petitioner is unable to sell or otherwise
effectively deal with the two properties. The Petitioner cannot be
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made to suffer the consequences of the Respondent’s failure to
preserve and return original documents entrusted to it.
4. Mr. Saraogi further submits that the compensation
payable to the Petitioner is required to be considered in light of
the RBI Circular dated 13th September, 2023, which provides for
compensation at the rate of Rs.5,000/- per day for delay from
2003 in returning original property documents after repayment of
the loan. The Respondent ought to be directed to also furnish
legally valid certified copies of all the lost documents, together
with such endorsements, declarations and other supporting
documents as may be necessary to enable the Petitioner to
establish clear title and facilitate the sale of the properties.
5. On the other hand, Mr. Chandran, learned counsel
appearing for the Respondent, submits that the present Petition is
not maintainable since the Petitioner had already approached the
Banking Ombudsman and the complaint had been disposed of by
directing payment of compensation of Rs.1 lakh. The
compensation has already been paid to the Petitioner. {
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6. On merits, Mr. Chandran admits that the Respondent
is unable to trace the original title documents relating to both
properties. He submits that the Petitioner did not request for
return of the original documents after repaying the loan and the
request for return of documents was made after a gap of more
than 15 years. During this period, the Respondent had shifted its
Branch premises. Despite making efforts to locate the documents,
the Respondent was unable to trace them. Insofar as the First
Property is concerned, the process of obtaining substitute
documentation is on-going and certain formalities are to be
completed by the Petitioner. As regards the Second Property, Mr.
Chandran submits that M.I.D.C. issued true copies of the relevant
documents on 27th February, 2024 and that the same were
forwarded to the Petitioner on 15th March, 2024.
7. Mr. Chandran denies the Petitioner’s claim of
approximately Rs.3.93 crores and submits that the Circular cannot
operate retrospectively and will apply only when the loan is
closed after the date of issuance of the Circular. Consequently, no
compensation can be awarded to the Petitioner on the basis of the
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Circular.
8. The Respondent further relies upon the steps taken by
it after the loss of the documents. It is contended that the
Respondent has (i) issued a No Dues/No Claims Certificate to the
Petitioner on 27th July, 2023; (ii) lodged an FIR on 14 th January,
2024; (iii) published advertisements in two local newspapers on
19th January, 2024 and also furnished the same to the Bussa
Industrial Premises Co-operative Society; (iv) submitted an
affidavit and indemnity on 20th March, 2024, as required by the
Society; and (v) held meetings through its representatives with the
officials of the Society including on 4 th June, 2026. Thus, the
Respondent has taken all reasonable measures within its control to
assist the Petitioner in reconstructing the title documents and
facilitating the Petitioner’s dealing with the properties. It is,
therefore, contended that no further compensation is warranted
and that the Petition ought to be dismissed.
Reasons and Conclusion
9. We have perused the record and have heard the
learned counsel for the parties. There is no dispute on facts. The
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Petitioner deposited the original title documents of both properties
with the Respondent in 1979 as security for the credit facilities
extended to it. The facilities were fully repaid on 28th August,
2003. Upon such repayment, the Respondent had no subsisting
right or justification to retain the original title documents. The
Respondent has admitted, in its correspondence including dated
5th December, 2023, 7th December, 2023 and 15th March, 2024, as
also in its affidavit in reply dated 23rd September, 2025, that the
original title documents are no longer traceable. The loss of the
documents while in the custody of the Bank therefore stands
established.
10. The Respondent contends that there was a substantial
delay of almost two decades by the Petitioner in demanding its
title documents. During this period the Branch premises were
shifted and, despite efforts made subsequently, the title documents
could not be traced. We are unable to accept this contention. The
fact that the Petitioner may not have immediately approached the
Respondent after repayment of the loan seeking return of the
original documents cannot absolve the Respondent of its
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obligation to preserve the title documents. In our view, a borrower
who has fully discharged the loan is entitled to proceed on the
legitimate assumption that the Bank or a Financial Institution
entrusted with the custody of valuable original title documents,
will maintain proper custody of those documents and return them
upon discharge of the secured liability. The burden of maintaining
a proper system for preservation, identification, retrieval and
return of documents is solely on the Respondent. It cannot be
shifted to the borrower merely because the borrower did not
immediately seek their return. The Petitioner has nothing to do
with the change in Branch premises, internal transfer of records or
change of personnel. These are all matters falling within the
Respondent’s exclusive internal administrative domain. The
obligation to preserve title documents and to return them upon
discharge of the underlying liability cannot depend upon the
borrower reminding the Bank to perform that obligation. To hold
otherwise would mean that a Bank could lose original title
documents in its custody and thereafter seek to avoid
responsibility merely because the borrower did not demand their
return immediately upon repayment of the loan. Such a
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proposition cannot be accepted.
11. The Petitioner has specifically stated that it intends to
deal with the properties and that the absence of the original
documents has caused continuous prejudice. The Respondent’s
steps, of filing an FIR, issuing newspaper advertisements and
procuring copies from M.I.D.C. etc, in assisting the Petitioner
may assist in mitigating the consequences of the loss. They do
not, however, erase the primary default of the Bank. The original
title documents are important in the chain of title and are
ordinarily required when the owner seeks to sell, mortgage,
transfer or otherwise deal with the property. Hence, we direct the
Respondent to take all steps in obtaining duplicate or certified
copies of the documents which have been lost and in completing
the reconstructed title record, including all necessary
endorsements, declarations, affidavits, indemnities, certifications
and other supporting documents required by the concerned
statutory authorities, society or prospective transferee for
confirming the Petitioner’s title to the properties.
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Liability to compensate the Petitioner
12. We now turn to the question of compensation. The
Reserve Bank of India Circular dated 13th September, 2023, on
“Responsible Lending Conduct–Release of Movable/Immovable
Property Documents on Repayment/Settlement of Personal
Loans” is extracted:
“RBI/2023-24/60
DoR.MCS.REC.38/01.01.001./2023-24
All Commercial Banks (including Small Finance Banks
and Regional Rural Banks, excluding Payments Banks)
All Local Area Bank
All Primary Urban Co-operative Banks
All State Co-operative Banks and District Central Co-
operative Banks
All NBFCs (including HFCs)
All Asset Reconstruction Companies
Madam/Dear Sir,
Responsible Lending Conduct – Release of Movable /
Immovable Property Documents on Repayment/Settlement of
Personal1 Loans
In terms of the guidelines on Fair Practice Code issued to
various Regulated Entities (REs) since 2003, REs are required
to release all movable/immovable property documents upon
receiving full repayment and closure of loan account.
However, it has been observed that the REs follow divergent
practices in release of such movable / immovable property
1 As defined in Annex to the Circular on ‘XBRL Returns – Harmonization of Banking
Statistics’ dated January 04, 2018
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documents leading to customer grievances and disputes. To
address the issues faced by the borrowers and towards
promoting responsible lending conduct among the REs, the
following Directions are being issued:
Release of Movable / Immovable Property Documents
2. The REs shall release all the original movable / immovable
property documents and remove charges registered with any
registry within a period of 30 days after full repayment /
settlement of the loan account.
3. The borrower shall be given the option of collecting the
original movable / immovable property documents either from
the banking outlet / branch where the loan account was
serviced or any other office of the RE where the documents are
available, as per her / his preference.
4. The timeline and place of return of original movable /
immovable property documents will be mentioned in the loan
sanction letters issued on or after the effective date.
5. In order to address the contingent event of demise of the
sole borrower or joint borrowers, the REs shall have a well
laid out procedure for return of original movable / immovable
property documents to the legal heirs. Such procedure shall be
displayed on the website of the REs along with other similar
policies and procedures for customer information.
Compensation for delay in release of Movable / Immovable
Property Documents
6. In case of delay in releasing of original movable /
immovable property documents or failing to file charge
satisfaction form with relevant registry beyond 30 days after
full repayment/settlement of loan, the RE shall communicate to
the borrower reasons for such delay. In case where the delay is
attributable to the RE, it shall compensate the borrower at the
rate of Rs 5,000/- for each day of delay.
7. In case of loss/damage to original movable / immovable
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property documents, either in part or in full, the REs shall
assist the borrower in obtaining duplicate/certified copies of
the movable / immovable property documents and shall bear
the associated costs, in addition to paying compensation as
indicated at paragraph 6 above. However, in such cases, an
additional time of 30 days will be available to the REs to
complete this procedure and the delayed period penalty will be
calculated thereafter (i.e. after a total period of 60 days).
8. The compensation provided under these directions shall
be without prejudice to the rights of a borrower to get any
other compensation as per any applicable law.
Applicability
9. These Directions shall be applicable to all cases where
release of original movable / immovable property documents
falls due on or after December 1, 2023.
10. The above Directions are issued under sections 21, 35A
and 56 of the Banking Regulation Act, 1949, sections 45JA and
45L of the Reserve Bank of India Act, 1934, and section 30A of
the National Housing Bank Act, 1987,
Yours faithfully,
(Santosh Kumar Panigrahy)
Chief General Manager”
13. The RBI Circular is issued under the Guidelines on
Fair Practices & Code (“FP&C”) as a part of responsible lending
conduct of Regulated Entities like banks and financial institutions.
RBI issued this Circular since it was observed that the Regulated
Entities followed divergent practices whilst releasing title
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documents leading to customers’ grievances and disputes.
Clause 2 of the Circular specifically provides that the banks
“shall” release all title documents within a period of thirty days
after full repayment of the loan. Under Clause 3, the bank “shall”
give the option to the borrower of collecting original title
documents either from the Branch where the loan account was
serviced or any other office where the documents are available as
per the borrowers preference. Neither of these two conditions
have been complied with by the Respondent in the present case.
Clauses 6 to 8 of the Circular then provide for compensation for
delay in releasing of title documents. It specifically provides that
where delay in releasing of original title documents is of thirty
days after full settlement of the loan, the borrower shall
communicate the reasons for such delay. In case, where the delay
is attributable to the bank, it shall compensate the borrower at the
rate of Rs.5,000/- for each day of delay. In addition, the bank shall
assist the borrower in procuring duplicate/certified copies of the
title documents and bear all associated costs in addition to paying
the compensation under Clause 6.
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14. We agree with the Respondent to the limited extent
that the Circular cannot be applied retrospectively for a period
starting from 2003. The Circular itself specifies its applicability
to cases where release of the original documents falls due on or
after 1st December, 2023. Hence, having regard to the admitted
loss of the documents and the continuing prejudice caused to the
Petitioner, the rate prescribed by the Circular will have to be paid
by the Respondent from 1st December, 2023 onwards.
15. The Circular is significant not merely because it
prescribes a monetary consequence for delay. The Reserve Bank
of India has expressly recognized that release of original title
documents after repayment of a loan is an important aspect of
responsible lending and has prescribed a quantified compensation
of Rs.5,000/- per day where the delay is attributable to the bank.
The prescription of Rs.5,000/- per day is not an arbitrary figure. It
provides an objective and rational measure of the prejudice that
RBI considered appropriate where a regulated entity fails in its
obligation concerning original property documents.
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16. We are also not persuaded by the submission that the
payment of Rs.1 lakh pursuant to the proceedings before the
Banking Ombudsman exhausts the Petitioner’s remedy. The
proceedings before the Ombudsman and the present Petition
operate in different fields. The Ombudsman’s advisory to pay
Rs.1 lakh was made in the context of the complaint before it. The
same does not, in the circumstances of the present case, prevent
this Court from examining the admitted loss of the original title
documents, the continuing prejudice suffered by the Petitioner and
the adequacy of the remedial measures undertaken by the
Respondent. The Circular itself expressly provides that the
compensation contemplated thereunder is without prejudice to the
borrower’s right to seek any other compensation available to it
under the applicable law.
17. The fact that the Respondent deposited Rs.1 lakh in
the Petitioner’s account, notwithstanding the Petitioner’s refusal
to accept the same, cannot alter the nature or extent of the
Respondent’s liability. If the said amount continues to remain with
the Petitioner, the same shall be given due adjustment against the
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compensation payable under this order.
18. For all the aforesaid reasons, the Writ Petition is
allowed in the following terms:
(i) The Respondent-Bank shall pay to the Petitioner
compensation calculated at the rate of Rs.5,000/- per
day from 1st December, 2023, subject to adjustment of
the sum of Rs.1 lakh already deposited/paid pursuant to
the order of the Banking Ombudsman;
(ii) This amount shall be paid until it provides certified
copies of the documents for both the properties and
reconstructs the title record, including all necessary
endorsements, affidavits, indemnities and other
supporting documents reasonably required by the
concerned statutory authorities, society or prospective
transferee for establishing the Petitioner’s title;
(iii) The Petitioner shall specifically address notices to the
statutory authorities in charge of the income tax, stamp
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duty and registration relating to the reconstructed
documents concerning both the properties;
(iv) The above exercise shall be completed within 12 weeks
of this order.
19. Liberty to apply.
[ GAUTAM A. ANKHAD, J. ] [ACTING CHIEF JUSTICE ]
BHARAT
DASHARATH
PANDIT
Digitally signed
by BHARAT
DASHARATH
PANDIT
Date: 2026.09.02
17:50:18 +0530
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