LIC to pay `85 lakhs for losing sale deed
In a landmark ruling, the Uttar Pradesh State Consu-mer Disputes Redressal Commission has ordered the Life Insurance Corpor-ation Housing Finance company to pay `85 lakhs to the complainant for misplacing sale deed of house mortgaged by him in 1998 against two loan amounts of `4 lakhs and `5 lakhs, respectively.
The complainant had repaid `4 lakhs with interest to the housing finance company in 2003 and `5 lakhs in 2006, but the company did not return him the registry papers of the house that the complainant had submitted as collateral for both loans.
The compensation amount is approximately 85 per cent of the current market value of the house in Gomti Nagar.
The compensation amount is other than `5 lakh which the commission has asked the LIC Housing to pay to the complainant for mental harassment over these years, apart from the 18 per cent interest which further adds to the compensation amount.
According to the petition filed by Rajiv Kumar Jain, he had taken `4.75 lakh as loan on April 15, 1998 and had delivered the original sale deed of his house (no. 3/396, Vishal Khand, Gomti Nagar) as “equitable mortgage” with the opposite party, LIC Housing Finance. The housing finance company, on December 12, 2003, issued a certificate informing that the original sale deed of the mortgaged house had been “misplaced”.
Under the same “equitable mortgage” deal, the LIC Housing Finance had later loaned `5 lakhs to Mr Jain. The complainant repaid the loan on February 2, 2004 and got the NOC issued on August 11, 2006. The LIC Finance, at that time too, said it had misplaced the original documents of the house.
“The company never said it had lost the property papers — it maintained that the same had been misplaced,” said Sarvesh Sharma, counsel for the complainant.
The commission took note of the fact that, in case, the original sale deed was lost, only photo copies could be obtained from the registrar office and not the original document and no financial institution gives loan on the basis of photocopied documents, as they do not come under the definition of “equitable mortgage”.
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