NEW DELHI: Nataranjan Bahidar had done it right for the most part. He’d taken a car loan, paid most of it through ECS (electronic clearing service) and wished to pay the remaining instalments by cheque. With only five more to go, his car was seized by “goons” and sold almost immediately. The consumer court, however, does not approve of the use of hired muscle to seize property.
The District Consumer Disputes Redressal Forum (New Delhi), ruled that the consumer “was not fraudulent in any manner or …escaping from payment” and that the bank “has acted negligently, in the facts of the case, to deserve punitive damages.” The court has directed the bank to pay Bahidar Rs 3 lakh “as damages for loss and harassment” and another Rs 25,000 for litigation expenses.
Bahidar had taken the bank loan from Citi Bank in 2000, agreed to pay through ECS (electronic clearing service) and paid all, but nine of 59 EMIs through it. Apparently, he had given “irrevocable authority” to the bank to recover loan through ECS but for the last nine, wanted to pay by cheque and directed his own bank to block further transfers. Citi Bank first issued him a notice but later accepted cheque payments for the next four instalments. With five EMIs to go, it issued a “loan recall letter” and asked the customer to deposit the outstanding amount with later charges and then decided to repossess the car. On June 15, 2005, four-five recovery agents caught Bahidar in transit and seized his car “by robbery mode.” The bank sent a “pre-sale notice” the next day (June 16) with a notice to clear dues within a week but actually sold the vehicle for Rs 50,000. It did all this despite having nine “undated” cheques from the customer as security and also denied having received any instruction to stop the use of ECS. It argued that the switching over to cheques was in breach of the original agreement with customer.
Source from TOI and posted by Consumer Voice
