A Bandra consumer forum last month awarded a compensation of Rs50,000 to a loan taker on grounds of mental torture and harassment by recovery agents, and told the bank to waive off the loan amount. Kharghar resident Keka Chakraborty had defaulted on her loan, and her cheques to the bank had bounced.
Chakraborty, who had taken a vehicle loan of Rs3.52 lakh from HDFC Bank in 2002, alleged that recovery agents forcibly took possession of her Maruti Zen and auctioned it off.
Relying on precedent, the court held that even though there was an agreement between the parties that gave the bank the authority to repossess the vehicle in the event of a default, the bank was supposed to initiate legal action and secure an order for such repossession.
Forum president JL Deshpande, along with members DS Bidnurkar and VG Joshi, imposed on the bank the compensation amount, along with costs of Rs5,000. The bank must submit the amounts within six months, failing which it has to pay Chakraborty 9% interest. Considering the circumstances in which the vehicle was seized, the court also waived the remainder of Chakraborty’s outstanding dues.
Neeraj Jha, head, corporate communications, HDFC Bank, said: “Though we are yet to receive the order, prima facie, it appears the forum has failed to appreciate that we followed the procedure as per the agreement, which has lead to an adverse conclusion. We are clear we will go into appeal against the order. If we don’t, it will set a wrong precedent and encourage wilful defaults such as this, which won’t be good for us as a bank, the banking system as a whole, and its potential borrowers.”
On December 28, 2006, when Chakraborty was not home, recovery agents allegedly employed by the bank entered her house and abused her husband, she said. Her husband was allegedly compelled to sign on a surrender letter and give the keys of their car.
The bank then sent a notice demanding alleged outstanding dues of Rs2.68 lakh and stated that if she did not pay the amount in 10 days, her vehicle would be seized.
The vehicle was auctioned off and a sum of Rs2 lakh was adjusted towards the outstanding amount, there occurring a shortfall of Rs67,069.
The bank denied the allegations and produced a list of cheques that had bounced in 2005 and 2006, the notices issued to Chakraborty and the copy of the surrender letter signed by Chakraborty’s husband.
HDFC Bank’s counsel said they invoked the clause allowing them to repossess the vehicle in case of default.
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