EMI – A recent decision by the High Court has brought great relief to those who do not pay EMI. Let us tell you that the High Court has reprimanded the banks and finance companies. Due to which the court has now issued orders to change the interest rate…
New Delhi: Patna High Court has strongly reprimanded those banks and finance companies who use the services of recovery agents to forcibly seize the vehicles of customers who are unable to pay car loan EMIs on time.
The high court also imposed a fine of Rs 50,000 each on the guilty banks and finance companies. Justice Rajiv Ranjan Prasad, in a judgment on May 19, said the seizure of vehicles by recovery agents is illegal and a violation of fundamental rights to life and livelihood.
Disposing of a batch of writ petitions, Justice Prasad said banks and finance companies cannot use the services of recovery agents to seize the vehicle if the customer defaults in payment of EMI. He directed the police to register an FIR against such recovery agents and take legal action.
The High Court observed that vehicle loans should be recovered only by banks and finance companies by following the provisions of securitization.
Which empowers banks and finance companies to recover unrepaid loans by taking physical possession of the mortgaged property of the defaulting customer.
The high court’s decision came while disposing of five writ petitions on forcibly confiscating vehicles of customers who defaulted on EMI payments.
