M/S IN VOGUE CREATIONS THROU. ITS PARTNER ACHALA SUDHAKAR JOSHIversusSTATE BANK OF INDIA

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         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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