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Patna, As the auto finance business has expanded in India, so has the business of illegal recovery agents. Due to non-payment of auto loan installments on time, vehicles are blown away by bullying at many places, but the Patna High Court said in an order that it is illegal to seize vehicles by recovery agents and they have no right to do so. The High Court has imposed fine on the banks, terming the recovery agents as illegal for forcibly seizing the vehicles.
Bank cannot forcibly seize the vehicle
The High Court has said in its decision that banks and other finance companies cannot forcibly confiscate vehicles through their recovery agents for non-payment of loan installments. Not only this, the High Court ordered registration of an FIR against the accused agent and others who did so. The court directed all the SPs to ensure that no recovery agent seizes the pledged vehicles without the orders of any competent authority.
Adopt special law SARFAESI Act
A single bench of Justice Rajiv Ranjan Prasad, while hearing five writ petitions filed by Ram Ayodhya Singh and others, ordered that banks and other financial institutions, if they have to recover vehicle loans through confiscation and auction of vehicles, Adopt the special law SARFAESI Act passed by the Parliament in 2002.
Give 50 thousand rupees within a month
Justice Prasad ordered ICICI Bank and other respondent companies to pay Rs 50,000 to each writ petitioner as litigation expenses within a month. The respondent banks and financial companies were also directed to take 30% of the outstanding loan amount from the writ petitioners and return the seized vehicle to them. The petitioners will have to give an undertaking that they will deposit the remaining 70% amount in equal instalments. Those whose vehicles have been auctioned, they have also been ordered to return the amount equal to the insurance of the vehicles.
violation of fundamental right to life
In a 53-page decision, the High Court said that confiscating or snatching the said vehicle without the order of the competent authority, of those who buy and drive a vehicle on loan and earn a living for themselves and their families, is a violation of the Constitution. The fundamental right to live given in 21 is violated. The Patna High Court said that taking vehicles from owners who do not repay vehicle loans is against the fundamental right to life and livelihood under the Constitution. In such cases an FIR can be lodged against the recovery agents. Banks can also be sued in such cases.
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