Banks cannot use force to recover loans: Indian SC
Sunday, 29 July 2007
NEW DELHI, July 28 (PTI): Holding that banks cannot employ force to recover loans, the Supreme Court yesterday refused to stay an order of the consumer forum directing ABN AMRO Bank to pay Rs 71,223 to a woman whose vehicle was allegedly forcibly seized by the bank.
"But whatever, it is, you cannot employ force to recover the loan. You have to go by the law," a bench of Justices BN Aggrawal and PP Naolekar, observed, while refusing to stay or quash the order.
The bench, however, asked the complainant to file her reply on the special leave petition filed by the bank challenging the consumer forum's order.
The woman Sangeeta Srivastava had moved the district consumer forum challenging the alleged forcible seizure of her Tata Indica car by the bank for default in payment of the loan installments.
The apex court had earlier in the case of a similar complaint against the ICICI Bank strongly deplored the growing tendency of banks to use musclemen and strong arm tactics against loan defaulters for recovery of loans.
"But whatever, it is, you cannot employ force to recover the loan. You have to go by the law," a bench of Justices BN Aggrawal and PP Naolekar, observed, while refusing to stay or quash the order.
The bench, however, asked the complainant to file her reply on the special leave petition filed by the bank challenging the consumer forum's order.
The woman Sangeeta Srivastava had moved the district consumer forum challenging the alleged forcible seizure of her Tata Indica car by the bank for default in payment of the loan installments.
The apex court had earlier in the case of a similar complaint against the ICICI Bank strongly deplored the growing tendency of banks to use musclemen and strong arm tactics against loan defaulters for recovery of loans.