Holding that banks cannot employ force to recover loans, the Supreme Court on Friday refused to stay an order of the consumer forum directing ABN AMRO Bank to pay Rs 71,223 to a woman whose vehicle was allegedly forcibly seized by the bank.
NEW DELHI: Holding that banks cannot employ force to recover loans, the Supreme Court on Friday refused to stay an order of the consumer forum directing ABN AMRO Bank to pay Rs 71,223 to a woman whose vehicle was allegedly forcibly seized by the bank.
"But whatever, it is, you cannot employ force to recover the loan. You have to go by the law," a bench of Justices B N Aggrawal and P P Naolekar, observed, while refusing to stay or quash the order.
The bench, however, asked the complainant to file her reply on the special leave petition filed by the bank challenging the consumer forum's order.
The woman Sangeeta Srivastava had moved the district consumer forum challenging the alleged forcible seizure of her Tata Indica car by the bank for default in payment of the loan instalments.
According to Sangeeta, she had availed an auto loan from the bank in 2001 and regularly paid the EMI of Rs 7,427 till July 2002. Due to financial difficulties, she claimed to have defaulted for four months to the tune of Rs 21,741.
Though she offered to make pay of the defaulted amount, the bank sent some people to her house and got the vehicle forcibly seized, the woman alleged.
The seized vehicle was, thereafter, auctioned and sold by the bank.
Observing that the bank's action as a deficiency of service, the district forum had asked the bank to pay her Rs 71,223 which included Rs 65,223 paid by her as margin money to the auto dealer, Rs 5,000 towards mental agony and Rs 1000 as legal expenses.
Aggrieved by the order, the bank filed appeals before the State Consumer Forum and the National Consumer Disputes Redressal Commission, which both dismissed them following which the SLP was filed in the apex court.
The apex court had earlier in the case of a similar complaint against the ICICI Bank strongly deplored the growing tendency of banks to use musclemen and strong arm tactics against loan defaulters for recovery of loans.
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