The Patna High Court declares forceful takeover of vehicles on defaulters of loan payment to be impermissible under law.Â
The Patna High Court in its recent judgment declared that the act of ruthless seizure of vehicles of persons with the use of huge manpower on non payment of vehicles shall be held illegal. The Court stated that the act shall be a strict violation of one’s fundamental rights of right to livelihood and such harassing actions shall be liable to criminal action.
Court’s Observation
The court carefully observed that loan agencies must follow proper protocol in recovering the loan amount from the concerned individuals. There are instances where a loan can be recovered by procedure of securitisation where banks have been vested with the power to recuperate bad debts by gaining possession of vehicles with the aid of district administration with the intention to impose debt security in a due process established by law.
A Single bench comprising Justice Rajeev Ranjan Prasad stated while disposing several writ petitions said that the loan recovery agents have no right to illegally possess someone else’s vehicle at gunpoint just on the basis that they have failed to repay the loan within stipulated time.
The Judge also instructed all police superintendents in Bihar to oversee that no vehicle is forcefully obtained by these agencies
Source: Bank of Baroda
The court while disposing off five such petitions stated that the act of forceful seizure will be liable to the agencies to pay a fine of Rs.50,000 each.
In his 53 page judgment, Justice Prasad relied upon a number of Supreme Court judgements and a judgment by the Hon’ble Supreme Court of South Africa which stated that writ petitions can also be filed against private state actors in some cases, as in this case was filed under Article 21 of fundamental right to livelihood.
