Bombay High Court orders SBI to pay daily damages for lost property papers
The Bombay High Court ruled that State Bank of India must pay Rs 5,000 per day from Dec 1 2023 until it restores missing title documents for In Vogue Creations.
The case stems from a 1979 loan secured by title deeds for two units in Prabhadevi and a lease for a plot in Taloja, which In Vogue Creations repaid in full on Aug 28 2003. Although SBI issued a No-Dues certificate in July 2023, it later admitted the original documents were missing and asked authorities for certified copies. After the firm’s complaint to the police and the Banking Ombudsman, the ombudsman directed SBI to pay Rs 1 lakh, which the bank deposited but the firm rejected.
On Sep 2 2026, a division bench of Acting Chief Justice Ravindra V Ghuge and Justice Gautam A Ankhad ordered daily compensation of Rs 5,000 from Dec 1 2023 until the bank supplies proper copies and restores the title records, giving SBI 12 weeks to comply. The court emphasized that a bank cannot evade responsibility for lost documents by citing the borrower’s delayed demand, citing the RBI’s September 2023 circular on timely release of property documents.
Why it matters
It clarifies banks' liability for lost security documents and enforces RBI's consumer-protection rules.
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