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Financial institutions can’t forcibly seize vehicles from loan defaulters through recovery agents, goons: Patna High Court

The Court was hearing a batch of pleas where the common grievance of all the petitioners was that their vehicles, which they had purchased with the financial assistance from bank and financial institutions, had been forcibly seized from them without taking recourse to the process of law and by using goons and musclemen during odd hours.

In a judgment passed on May 19, Justice Rajeev Ranjan Prasad expressed anguish over the action of the banks and finance companies noting that seizure/re-possessing the vehicle without following the Reserve Bank of India (RBI) guidelines and the law on the subject, was wholly illegal.

“The banks and the finance companies who are contesting these matters are under a constitutional obligation not to act in violation of law. They cannot act in conflict with the fundamental principles and policy of India which means that no person may be deprived of his livelihood and the right to live with dignity without following the established procedure of law. The right to recovery of these banks and financial institutions if pitted against the constitutional right of ‘life’ of a person/petitioner to live with dignity and not to be deprived of without following the established procedure of law, the constitutional rights of the person/petitioners shall prevail,” the Court held.

Source: Barandbench

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