Original Property Papers Lost by Bank/NBFCs
After Home Loan Closure, the most shocking news for any borrower is that Property Documents or any Page is lost by the Bank or NBFCs. Last Tuesday, I got a call from an existing client that he has gone they the same trauma. he came to meet me for consultation and seeking my opinion on what to do next. He was called by his Home Loan provider to collect his original property documents after he closed his home loan with the Bank.
The Situation is no different even if a single page is misplaced by the bank / NBFC from most critical documents like sale deed, sale agreement, possession letter, allotment letter, will, etc. once the document or page are misplaced the owner will find it very difficult to sell the property or avail any loan facility on the same property in future. the buyer of the property will not get a home loan easily as the banks suspect that the property might have been mortgaged with some other bank.
When you avail Any Loan where property documents need to be mortgaged, all the original documents of property pass through multiple verifications before securing in Locker. if you request for Photocopy of the Property Documents during the loan period then the documents will be pulled out from the locker.. these lockers are maintained by the bank or 3rd party. after the loan is closed original documents go through the same cycle before handed over to the owner. and also as a banking system Annual or quarterly or monthly Audit of Loan Files by the auditor can check the files from the locker room and due to any error the papers misplaced or mix with other files there is always the possibility that the original documents lost by the bank in this process.
I Always advise my clients that when you are collecting documents from the bank after closing the Loan, kindly check every page. it is advisable to carry List of Document ( LOD) and Property Documents xerox to match with original documents. if you observe that any of the original property documents are misplaced or not in the file or lost by the bank what to do next. please check the below points that will help you to deal with that situation.
a.) Don't accept the documents from the bank: if you observe any original documents or pages are missing then it is advisable to retire all the original documents back to the bank. The bank might insist you take the rest documents and sign acknowledgment. the banker will assure you to locate and handover missing documents or pages very soon but be firm on your stand and return all the documents to the bank.
b.) Don't sign any acknowledgment or undertaking: Bank takes acknowledgment or undertaking first before handing over original documents. if you find out original property documents lost by the bank then kindly destroy any acknowledgment or undertaking signed by you. always signed the acknowledgment before checking all the documents in proper order. Remember once you signed the acknowledgment you cant claim that document or page is lost by the bank.
c.) Write a complaint in the bank complaint Register: Immediately write a complaint with the bank Complaint register and do mention that original documents or pages are missing when you came to the bank for document collection the same is lost by the bank. don't forget to take acknowledgment from the bank official along with the bank seal.
d.) Register Police FIR for Documents Lost: if Any govt-issued document is lost or misplaced, it is mandatory to register Police FIR . in person and Online both way, clearly state that the bank has lost your original documents or pages which you submitted with the bank in original at the time of taking loan facility.
Submit a copy of the police FIR with the bank and take acknowledgment from the bank that they have received the copy of the police FIR.
e.) Submit Affidavit to the registrar of co-operative societies: in the affidavit mention that your original property documents lost by the bank. you may give a written request to the bank to do the needful as it is the bank responsibility. this step is required to avoid any fraud.
f.) Public Notice in 2 Newspapers: Now the Bank will put a public notice in 2 newspapers ( One in English and Another in Vernacular Language of state e.g. In Delhi bank will put a notice in English and Hindi Newspaper ) mentioning the Original Property Documents Lost by the bank with your property details in Notice. If anyone has an objection from General Public then he/she can file the objection within 15 days.
g.) Indemnity bond from the bank: In the next step, the bank will issue an indemnity bond to you on stamp paper stating that original documents lost by the bank. The indemnity bind should contain property details. Police FIR details and details of the advertisement published in 2 Newspapers. Indemnity Bond should be attested & Notarised by Govt Notary.
h.) Duplicate share certificate: you should request for duplicate share certificate from society by submitting a police FIR copy. Clearly state in the application that Original Property Documents Lost by Bank.
i.) Certified copies from the registrar's office: In the next step, the bank will obtain certified/duplicate copies from the registrar's office the bank will submit police FIR, Duplicate Share Certificate from the Housing Society, the Newspaper advertisements, and the undertaking at the deputy registrar office. Bank will pay the required charges. The registrar will then issue the duplicated copy of the sale deed.
j.) Encumbrance Certificate from Registrar Office: Once the process is completed, request for latest Encumbrance Certificate from the registrar's office to ensure that everything is fine.
k.) File complain in consumer forum: you may file a complaint in the consumer forum and can claim compensation from the bank for services deficiency i.e. Original Property Documents Lost by Bank. you can demand compensation equivalent to double the value of your property depending on the nature of loss in such cases decision is always in favor of the customer.
l.) Penalty on Bank: Besides compensation, the bank is also liable to pay 100 Rs per day if there is a delay in providing documents beyond 15 days from the date of loan closure. this is over and above the compensation for deficiency in service.
Last but not least ( Most Important Point )
- You need not do any running around for all the above steps. If Original Property Papers Lost by Bank then it is the responsibility of the bank to close all the above-mentioned steps.
- The entire cost to complete the legal process will be borne by the bank.
- Take all the documents from the bank for your reference i.e Newspapers Advertisement Copy/Notice, Indemnity Bond, FIR Copy, Certified copy of original Property papers from the Registrar Office, NOC, etc.
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