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Bank can repossess even when clause not in loan agreement

Justice Vaidhyanathan on pointing out that the Supreme Court had held in a plethora of decisions that a financier had a right to resume possession of the goods even if the hire purchase agreement did not contain a specific clause for resumption of possession, directed the police to quash the FIR filed against the bank.

As per the case, T Karuppiah of Madurai had obtained a loan of Rs 9 lakh from the HDFC bank in Madurai to buy a car. But, since he had failed to repay the loan, the bank after issuing notice to him, took the car into its custody.

Acting on a complaint from Karuppiah that the bank officials had robbed his car, the Kadupatti police booked the bank under section 379 IPC and also asked the bank to surrender the vehicle as it was required for investigation as well as production before the court. This prompted the bank to approach the court seeking to quash the FIR.

 Article referred: http://www.dtnext.in/News/City/2016/01/01203929/Banks-can-seize-vehicles-in-loan-cases-High-Court.vpf

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