Patna HC Bars Banks from Using Agents for Forceful Vehicle Seizures Over Non-Payment of Car Loan EMIs


Patna: The Patna High Court has recently delivered a strong message to banks and finance companies engaging recovery agents to unlawfully confiscate vehicles from customers who have fallen behind on their car loan EMIs. In a landmark ruling on May 19, Justice Rajiv Ranjan Prasad declared such vehicle seizures as illegal, emphasizing their infringement upon fundamental rights related to life and livelihood.

Furthermore, the court levied a fine of Rs 50,000 on each offending bank and finance company. This judgment by the Patna High Court serves as a significant admonition to financial institutions employing recovery agents for forceful vehicle repossession, highlighting the importance of upholding individuals’ rights while navigating the realm of car loan repayments.

By imposing fines on erring banks and finance companies, the court aims to discourage the use of recovery agents and promote fair practices in the collection of outstanding car loan payments. Justice Prasad’s judgment underscores the illegal nature of vehicle seizures and emphasizes the violation of fundamental rights, such as the right to life and livelihood, that occur as a result.

This ruling serves as a crucial step towards protecting the rights and interests of customers who may face financial difficulties and default on their car loan EMIs. The Patna High Court’s strong stance sends a clear message to banks and finance companies that they must find alternative, lawful methods to address non-payment issues, rather than resorting to forceful repossession, which disregards the rights and well-being of their customers.

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