Consumer Court Holds Central Bank of India Accountable for Misplaced Property Documents

In a significant ruling, the I Additional District Consumer Disputes Redressal Commission in Bangalore, led by President B. Narayanappa and Members Jyothi N and Sharavathi SM, found the Central Bank of India at fault for not returning the pledged property documents after a loan was repaid. 

The court ordered the bank to compensate the complainants, Mr. Syed Ismail and Mr. Syed Hussain, with a total of Rs. 2,65,000/- which includes compensation for the loss, litigation costs and for the service deficiency.

Case Background: Dispute Over Misplaced Property Documents

In this Consumer Court case, Mr. Syed Ismail and Mr. Syed Hussain, along with their late father, secured a joint loan amounting to Rs. 20,00,000 from the Central Bank of India, by providing their property documents as security. Following the father’s death, the brothers, through one acting as a legal representative, settled the remaining balance of the loan. Despite this, and after issuing a ‘No Due Certificate’ on December 12, 2022, the bank reported the documents lost and was unable to return them. This prompted the complainants to approach the Consumer Court after repeated, unsuccessful attempts to retrieve their documents from the bank.

Legal Proceedings and Consumer Court Decision

The Consumer Court carefully reviewed the case brought by Mr. Syed Ismail and Mr. Syed Hussain against the Central Bank of India. Despite the bank’s defense, claiming the loss of property documents was due to an accidental misplacement during an office relocation, the Consumer Court found significant negligence on the part of the bank. The court noted the bank’s failure to respond adequately to the complainants’ requests for the return of their property documents. Consequently, the Consumer Court ruled in favour of the complainants, holding the bank liable for deficiency in services. The bank was ordered to compensate the complainants for the inconvenience and loss suffered due to the bank’s negligence in handling the pledged property documents.

Update and Reinforcement by Consumer Court and Regulatory Bodies

Recent developments have shown an increased vigilance by Consumer Courts and regulatory bodies like the Reserve Bank of India (RBI) regarding the issue of banks misplacing property documents. Similar to the case against the Central Bank of India, other banks have faced penalties and directives from Consumer Courts for similar misdemeanours. For instance, the Reserve Bank of India has set forth guidelines compelling banks to ensure the timely return of property documents after loan closure, emphasizing the importance of accountability in banking services. This underlines the Consumer Court’s commitment to protecting consumer rights and ensuring that banks adhere to responsible document handling and customer service practices.


The Consumer Court’s decision against the Central Bank of India serves as a critical reminder of the responsibilities banks hold towards their customers, especially concerning the safekeeping and return of property documents. This ruling underscores the Consumer Court’s role in upholding consumer rights and ensures that financial institutions are held accountable for their actions. Customers facing similar issues are encouraged to approach the Consumer Court to seek justice and compensation for any negligence or deficiency in service provided by banks.

Leave a Comment

Your email address will not be published. Required fields are marked *