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IN THE HIGH COURT OF KERALA AT ERNAKULAM
Bechu Kurian Thomas,J
Sheela Francis Parakkal, W/O Late Francis Parakkal – Appellant
Versus
Authorised Officer, South Indian Bank – Respondent
JUDGMENT :
BECHU KURIAN THOMAS, J.
Petitioners seek for a direction to release their title deeds and also for a declaration that the second respondent has no authority to retain petitioners’ original title deeds, despite closure of the loan account. Petitioners have also sought for a compensation of Rs.10,00,000/- for illegal retention of documents for nine years after closure of the loan.
2. The first petitioner and her husband had availed a loan from the second respondent in the year 2009. Second and third petitioners who are their children, were the guarantors to the said loan. Husband of the first petitioner expired on 20.10.2011. Petitioners are the legal heirs, as is evident from the legal heirship certificate dated 20.3.2013.
3. On 16.07.2015, the bank issued Exhibit-P4 letter acknowledging the deposit of four title deeds by the petitioners as security for the housing loan availed from them. The document which included two exchange deeds bearing Nos. 1924/1992 and 2039/1992, a release deed No.1350/1975 and a sale deed No.3625/1971 all of Aluva Sub Registry Office, were retained by the second respondent bank. Subsequently, on 04.08.2015, as per Exhibit-P5, petitioners requested t
The bank has no authority to retain title deeds after loan closure, and compensation claims must be pursued through appropriate legal forums.
Loan write-off does not extinguish the creditor's right to recover dues.
The court affirmed the authority to award liquidated damages under Reserve Bank of India guidelines for delays in document release, emphasizing the inadequacy of initial compensation.
Once a loan is settled, banks must return original mortgaged documents promptly, as withholding them without justification constitutes neglect and may warrant compensation.
Banks have a legal responsibility to safeguard original title documents and are liable for any losses incurred due to negligence in their custody.
Home Loan – Reduction in sale consideration, though indicative of financial prejudice, cannot be wholly attributed to loss of Title Documents or quantified solely on the basis of sale documents.
The court can, in exercise of the powers under Article 227 of the Constitution of India issue appropriate directions when the Tribunal is not functioning and no judicial order can be issued granting ....
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