Using recovery agents proves costly for truck financier, SC orders Rs 15 lakh payout | India News
NEW DELHI: Criticising the use of muscle power by financiers to get back hypothecated vehicles, Supreme Court has told one of them to pay Rs 15 lakh to a truck owner who had taken a loan of Rs 10.4 lakh to buy the vehicle.Nearly two years after sanctioning the loan in June 2021, Cholamandalam Investment and Finance stealthily took back the truck over default in payment of EMIs. CCTV footage of a godown in Ayodhya on April 9, 2023, showed four persons breaking the vehicle’s steering lock around 1am and driving it away. Six months later, Cholamandalam sent a notice saying it had taken back the vehicle and auctioned it for Rs 4.5 lakh, and the balance amount of Rs 1.3 lakh was still to be paid by him.
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A Supreme Court bench of Justices P S Narasimha and Alok Aradhe said though repossession of a hypothecated vehicle was a valid step to securitise the asset financed, it had to be done legally, with the procedure conforming to RBI’s guidelines on Fair Practices Code for Lenders issued on May 5, 2003.
