Bank lost property deed

Paul Basu (Querist) 03 March 2023 This query is : Resolved
My father took a mortgage loan from SBI in 1984 of ₹68000/-. Due to financial crisis he was unable to pay the dues. In 2004 father asked for settlement of the loan. Bank agreed to take ₹94000/- and return the property deed. But bank lost the deed. Father did not pay the settlement amount. The loan was not closed. In 2023 father died. I want to sell my house. What Can I do to get back the deed? I am also in financial crisis.

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A person's father took out a mortgage in 1984, but couldn't pay it off. The bank lost the property deed when a settlement offer in 2004 wasn't paid. Now, with the father deceased, the heir wants to sell the house but needs the deed. Experts clarify that the lost deed doesn't extinguish the loan; the debt must be settled first. The property is still mortgaged, and all legal heirs are liable. Once the loan is settled, the bank is obligated to return the original deed or a duplicate. The heir can potentially sell the property by arranging for a new buyer, using the advance to clear the debt, and obtaining a certified copy of the deed from the bank.

Sudhir Kumar, Advocate (Expert) 03 March 2023
lost property documents can be had duplicate. That does not mean that the loan is extinguished.

Advocate Bhartesh goyal (Expert) 03 March 2023
Since bank loan has not been yet paid by you and property title deeds are with bank may be lost but until loan is not paid to bank or settled,you can't sell property.

Paul Basu (Querist) 03 March 2023
I want to settle the loan. Will the bank give my deed back?

kavksatyanarayana (Expert) 03 March 2023
The above senior experts gave you a reply clearly. The deed is not the problem but without clearing the loan you cannot sell the property.

P. Venu (Expert) 03 March 2023
With the demise of the father, the property has jointly devolved upon all the legal heirs. They are liable for settling the loan. Unless the property is free of encumbrance, it is unlikely that there could be a willing buyer.

Dr J C Vashista (Expert) 05 March 2023
Your concern/ problem/query is regarding return of title documents of the mortgaged property or settlement of loan amount ?
You will have to redeem mortgage before asking for title documents.

Sudhir Kumar, Advocate (Expert) 05 March 2023
Property is till mortgaged even if bank has lost documents. You just cannot walk away without paying the loan. In case they have lost documents you can at the most sue them in consumer court for the inconvenience and loss suffered.

Isaac Gabriel (Expert) 05 March 2023
If the loan is settled, it is the responsibility of the bank to return the documents, either original or if lost with duplicate obtained from the registry.

K Rajasekharan (Expert) 05 March 2023
There is no problem for you to sell the property.

Then the bank will release your property free from debt. Then you can take a certified copy of your document by stating the reason that it was lost while in the custody of bank, with their letter.

Settle your new deal with your buyer, get an advance by registering a document and pay back your debt with the bank.

Now that certified copy is good enough as equivalent to your original deed.

Dr J C Vashista (Expert) 06 March 2023
You are advised to settle your account before seeking title documents, which can be managed even if lost by Bank.

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