Delhi District Court
Ravi Kumar vs Idbi Bank Ltd on 16 October, 2025
IN THE COURT OF MS GOMA DABAS GUPTA:
DISTRICT JUDGE-06 : WEST DISTRICT :
TIS HAZARI COURTS : DELHI
CS No. 1139/18
CNR No.DLWT01-009008-2018
1. Ravi Kumar
S/o Sh Sohan Lal
2. Mrs Rajni
W/o Sh Ravi Kumar
at House No.2826, Jawahar Colony
NIT, Faridabad, Haryana 121001
..........Plaintiffs
Versus
IDBI Bank Limited
Through its Managing Director
J-12/26, Rajouri Garden
New Delhi-110027
Also at
1st Floor, Videocon Towers
E-1, Jhandewalan Extension
New Delhi-110055
..........Defendant
Date of Institution: 03.10.2018
Date reserved for Judgment: 24.09.2025
Date of Judgment: 16.10.2025
JUDGMENT
1. Plaintiffs have filed the present suit for damages and recovery of Rs.25,70,904/- (Rupees Twenty Five Lakh Seventy Thousand CS No.1139/18 Ravi Kumar vs IDBI Bank Ltd Page 1/13 Nine Hundred and Four only) alongwith pendente lite and future interest.
2. The brief facts, as revealed from the plaint are:
(i) That the plaintiffs jointly applied for housing loan amount of ₹ 25 Lacs required for the purchase of property, that is, Plot No. 742, sector 64, Urban estate, Faridabad, Haryana and the same was sanctioned by the defendant bank vide sanction letter dated 22/07/2016.
The defendant dispersed part amount of ₹ 20 lakhs in favour of the plaintiffs by letter dated 24/08/2016 which was to be repaid alongwith floating rate of interest at the rate of 9.45% per annum in 240 EMIs of 18,577 each.
(ii) That on compliance of the terms and conditions of the sanction letter/agreement, the plaintiffs also created security interest/equitable mortgage of their property by depositing complete chain of original title deeds with the defendant. The defendant duly acknowledged the receipt of the original title deeds vide letter dated 03/09/2016. The defendant assured that the said documents were kept in safe custody in a highly secured place having minimal possibility of any loss or damage with further assurance that all the documents would be returned to the plaintiffs at the time of closure of the loan account.
(iii) That in February 2018, the plaintiffs approached the CS No.1139/18 Ravi Kumar vs IDBI Bank Ltd Page 2/13 defendant for closure of the aforesaid home loan account number 140695100001052 and accordingly, the defendant issued foreclosure letter dated 01/02/2018 demanding an outstanding amount of ₹ 5,52,593/- to be deposited by 20/02/2018 and also assured to return the original title documents within 15 days from the date of deposit of the due amount. The said amount was to be repaid by the plaintiffs which has been acknowledged by the defendant vide receipt No. 058 dated 03/02/2018.
(iv) That, without any basis, the defendant demanded an amount of ₹ 70,903.79 paisa vide letter dated 23/05/2018. The plaintiffs strongly protested against the said illegal demand, however, succumbed to the pressure by the defendant and paid the said amount.
(v) That the defendant, instead of releasing the original title documents, vide letter dated 10/07/2018 informed the plaintiffs that the entire chain of original title deeds had been damaged/lost due to fire. The defendant vide the aforesaid letter informed the plaintiffs that in lieu of the original title documents, obtaining a certified copies from the concerned authorities would be facilitated.
(vi) The plaintiffs approached several property dealers and were informed that in the absence of original title documents, the sale of the property in respect of which the documents were deposited with the defendant would CS No.1139/18 Ravi Kumar vs IDBI Bank Ltd Page 3/13 be difficult and it's market value would be appreciated by 30% to 40%. Due to non return of original title documents, the plaintiffs have suffered a direct loss of more than ₹ 25 Lacs without any fault on their part. Plaintiffs have sought the recovery of the said amount through the present suit as well as refund of illegal penalty charges of ₹ 70,903.79 paisa.
(vii) The plaintiffs had issued legal notice dated 13/08/2018 to the defendant asking the defendant to pay amount of ₹ 25,70,904/-. The defendant has not complied with the said legal notice and hence, the present suit has been filed.
Written Statement
3. The defendant has filed Written Statement wherein the defendant has submitted that amount of Rs.70,903.79 paisa has been charged from the plaintiffs according to penalty clause in the sanction letter, i.e, if the account is being closed before the completion of 3 years and no construction made therein. Further, the defendant has submitted that the title documents were conveyed by the bank to the Stock Holding Corporation of India, Mumbai in accordance with the management and custodial arrangements between the defendant and SHCIL dated 08/10/2015. The documents were destroyed due to fire incident that took place on 17/12/2017 despite necessary precautions and CS No.1139/18 Ravi Kumar vs IDBI Bank Ltd Page 4/13 preventive measures on the part of SHCIL. Accordingly, the defendant has prayed for dismissal of the plaintiffs suit.
Replication
4. Plaintiff has filed replication to the Written statement of defendant wherein he has reiterated the contents of the plaint.
Issues
5. Vide order dated 13.08.2019, following issues were framed:-
Issue No.1:- Whether the plaintiff is entitled for damages of Rs. 25 Lakhs alongwith pendente lite and future interest @ 15 % p.a? OPP Issue No.2:- Whether defendant has illegally deducted a penalty of Rs. 70903.79/- and if yes, whether plaintiff is entitled for recovery and if yes, at what rate? OPD Issue No.3:- Relief.
Evidence
6. Plaintiff no.1/Ravi Kumar examined himself by way of affidavit Ex.PW1/A and relied upon following documents:-
Ex.PW1/1 is the address proof of plaintiff Ex.P-2 is the sanction letter dated 22.07.2016 Ex.P-3 is the agreement dated 28.07.2016 Ex.P-4 is the letter dated 24.08.2016 Ex.P-5 is the complete chain of original title deed/sale deed CS No.1139/18 Ravi Kumar vs IDBI Bank Ltd Page 5/13 Ex.P-6 is the receipt of complete chain of original title deed Ex.P-7 is the foreclosure letter dated 01.02.2018 Ex.P-8 is the acknowledge vide receipt no. 058 dated 03.02.2018 Ex.P-9 is the copy of letter dated 23.05.2018 Ex.P-10 is the copy of letter of closure of home loan account dated 03.07.2018 Ex.P-11 is the letter dated 10.07.2018 Ex.P-12 (colly) is the original letter issued by brokers Ex.PW1/13 is the legal notice dated 13.08.2018 Ex.PW1/14 is the postal receipt Ex.PW1/15 is the reply dated 23.08.2018 Ex.PW1/16 is the certificate under Section 65-B of Indian Evidence Act
7. PW-2 Sh Hari Kishan S/o late Sh Giriraj Singh was examined to prove the document Ex.PW1/12. He has filed his authorization letter dated 17.04.2022 vide Ex.PW2/1.
8. PE was closed vide order dated 14.08.2023.
9. Defendant was granted various opportunities to lead evidence. Despite the same, defendant failed to lead evidence and hence, DE was closed vide order dated 20.03.2025.
CS No.1139/18 Ravi Kumar vs IDBI Bank Ltd Page 6/1310.I have heard final arguments advanced by counsels for both the parties. I have perused the record as well as written arguments filed by both the parties alongwith citations.
Issuewise findings:
11. With respect to issue No 2:-
"Issue No.2:- Whether defendant has illegally deducted a penalty of Rs. 70903.79/- and if yes, whether plaintiff is entitled for recovery and if yes, at what rate? OPD"
It is a case of the plaintiffs that the defendant has illegally charged the plaintiffs an amount of Rs. 70,903.79/-in the nature of penalty. The defendant bank has admitted charging the said amount. However the defendant bank has submitted that the said amount has been charged according to penalty clause in the sanction letter, i.e, if the account is being closed before the completion of 3 years and no construction made therein.
12.The counsel for the plaintiff has argued that the Reserve Bank of India, vide its circular number RBI/2013-14/582 dated 07/05/2014 has issued directions against the levy of foreclosure charges/ prepayment penalty on floating rate of loans and has issued directions that "it is advised that banks will not be permitted to charge foreclosure charges/prepayment penalties on all floating rate loans sanctioned to the individual borrowers, CS No.1139/18 Ravi Kumar vs IDBI Bank Ltd Page 7/13 with immediate effect". It is submitted that the RBI again vide its Circular No. RBI/2019-20/29 dated 02.08.2019 has issued directions regarding the levy of foreclosure charges/prepayment penalty on floating rate term loans and has issued directions and has reiterated the contents of circular number RBI/2013-14/582 dated 07/05/2014 and restrained banks from charging foreclosure charges/prepayment penalties on all floating rate term loans sanctioned to the individual borrowers, with or without co-obligants.
13.Per contra, counsel for defendant has submitted that the said penalty charges have been charged as per the penalty clause mentioned in the sanction letter dated 22/07/2016 which was duly signed by the plaintiff No.2. The terms of the penalty clause in the sanction letter dated 22/07/2016 are reproduced here in under:
"in case of foreclosure of the loan from one source/balance transfer etc within the period of 36 months from the date of 1st disbursment with "Non Completion" of construction, when entry by way of additional interest rate of 4% over and above the base rate due to non-completion of construction would be levied w.e.f 1st disbursement".
14. The defendant has further submitted that it was specifically CS No.1139/18 Ravi Kumar vs IDBI Bank Ltd Page 8/13 mentioned in paragraph 4 of the foreclosure letter dated 01/02/2018 issued by the defendant to the plaintiffs that foreclosure charges will be levied as per the sanction letter of the loan. The contents of paragraph 4 of the foreclosure letter dated 01/02/2018 are reproduced herein below:
"the foreclosure charges will be levied as per the same mentioned in the sanction letter of your subject loan".
15.I have perused the contents of Ex.P-2, which is the sanction letter dated 22.07.2016 and the contents of Ex.P-7, which is the foreclosure letter dated 01.02.2018. Perusual of the said documents clearly reveal that foreclosure charges were to be charged by the defendant bank in case of early foreclosure of loan as per the clause mentioned in the sanction letter.
16.It is a settled principle of the law of contract that parties are bound by the terms of contract. The penalty clause is clearly mentioned in the sanction letter dated 22/07/2016 and the same is duly signed by the plaintiff No. 2. Thus the plaintiffs are bound by the terms of the sanction letter.
17.As per the contention of the plaintiffs regarding the circulars of Reserve Bank of India are concerned, the circular dated 2014 mentions that "it is advised that banks will not be permitted to charge foreclosure charges/prepayment penalties on all floating CS No.1139/18 Ravi Kumar vs IDBI Bank Ltd Page 9/13 rate term loans sanctioned to the individual borrowers, with immediate effect". Clearly, the said letter is in the form of an 'advise' to the banks. The other circulars of the Reserve Bank of India have been issued after the sanction letter dated 22/07/2016 and thus, cannot apply retrospectively. Thus, the issue No. 2 is decided in favour of the defendant and against the plaintiffs.
With respect to Issue No. 118."Issue No.1:- Whether the plaintiff is entitled for damages of Rs. 25 Lakhs alongwith pendente lite and future interest @ 15 % p.a? OPP"
The plaintiffs have sought damages to the tune of ₹ 25 Lacs on the ground of being suffered direct loss of more than ₹ 25 Lacs due to the non return of original title documents by the defendant. The defendant, in its written statement has submitted that the defendant bank had entrusted the documents of the plaintiffs with the Stock Holding Corporation of India and the said documents eventually got destroyed in the fire incident that took place on 17/12/2017. Further, it is pertinent to mention that during the course of trial, on 19/12/2024, the defendant returned to the plaintiff all the original title documents of the mortgaged property given by the plaintiffs to the defendant. Separate statement of plaintiff no.1 was recorded in this regard on 16/01/2025.CS No.1139/18 Ravi Kumar vs IDBI Bank Ltd Page 10/13
19.It is a settled principle of law that for claiming damages, loss must be proved. Consequences for breach of the contract are provided in Chapter VI of the Contract Act which contains three sections, namely, Section 73 to Section 75. As per Section 73 of the Contract Act, the party who suffers by the breach of contract is entitled to receive from the defaulting party, compensation for any loss or damage caused to him by such breach, which naturally arose in usual course of things from such breach, or which the two parties knew when they make the contract to be likely the result of the breach of contract. This provision makes it clear that such compensation is not to be given for any remote or indirect loss or damage sustained by reason of the breach. The underlying principle enshrined in this section is that a mere breach of contract by a defaulting party would not entitle other side to claim damages unless said party has in fact suffered damages because of such breach. Loss or damage which is actually suffered as a result of breach has to be proved and the plaintiff is to be compensated to the extent of actual loss or damage suffered.
20.In the present case, the plaintiff has averred that due to the original title documents of the property being lost by the defendant bank, the market value of the property appreciated by 30% to 40%. The plaintiffs have examined PW-2, Sh Hari Kishan who has deposed that when original documents of the CS No.1139/18 Ravi Kumar vs IDBI Bank Ltd Page 11/13 property are not available, then it is very difficult to sell the property and market value of the property also gets depreciated by 30% to 40%. In the cross-examination, the PW-2 has deposed that he cannot show any document to show that the plaintiff ever approached him regarding the selling of property bearing plot No. 742, sector 64, Faridabad, Haryana. He has further deposed that the plaintiffs only came to him for taking a suggestion about selling of the said property. Nothing could be extracted from the testimony of PW-1 or PW-2 to prove any loss suffered by the plaintiffs.
21.The onus to prove issue No.1 is upon the plaintiff. No damages can be awarded until loss is proved. The plaintiffs have not adduced any evidence to prove any loss. The testimony of PW2 is also of no avail to the plaintiffs as even the PW 2 has not been able to prove any loss suffered by the plaintiffs.
22.In view of above, issue no.1 is decided in favour of defendant and against the plaintiffs.
Relief
23.In view of the above discussion, the suit filed by plaintiffs stand dismissed. No order as to cost. Decree sheet be prepared accordingly.
CS No.1139/18 Ravi Kumar vs IDBI Bank Ltd Page 12/1324.Any pending application, if any, stands disposed off accordingly.
25.File be consigned to record room as per rules.
GOMA Digitally
by GOMA
signed
DABAS GUPTA
Announced in the open court DABAS Date:
GUPTA 2025.10.17
13:24:17 +0530
on 16.10.2025 (Goma Dabas Gupta)
District Judge-06
West District, Tis Hazari Courts
Delhi/16.10.2025
CS No.1139/18 Ravi Kumar vs IDBI Bank Ltd Page 13/13