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Rule rein on bank recovery

Calcutta High Court has said it will frame a law for financial institutions and banks to take possession of a vehicle from defaulters. The court, at the same time, made it clear that it objected to banks using musclemen to repossess vehicles.

The division bench of Chief Justice A.K. Mathur and Justice A. Banerjee, on Wednesday, criticised financial institutions and banks for hiring goons to recover cars of defaulters. “Such an act should not be tolerated by the law,” the bench observed. It was hearing an appeal by HSBC against a recent order of Justice Pranab Chatterjee of the same court, who observed that lifting of cars by musclemen was illegal and arbitrary.

The trial judge also directed Lake police station to retrieve a Tata Safari from the possession of HSBC, respondent in the matter, and hand it back to petitioner Amal Bose, who had alleged in court that the bank had forcefully impounded his car.

Appearing before the division bench, counsels for HSBC Anindya Mitra and Joymalya Bagchi said the high court had no jurisdiction to hear the matter, nor was there an appropriate forum for banks and financial institutions to seek legal redress against instalment defaulters.

The bench asked them why banks cannot approach a bank tribunal. Counsel Mitra replied that a complaint cannot be lodged with the tribunal unless a vehicle costs more than Rs 10 lakh.

The court observed that it would soon draft a law to sort this out. “This method of taking repossession of cars cannot be allowed,” Justice Mathur said. “At the same time, since banks have no appropriate forum to turn to, we (the court) have to frame laws so they, too, can get justice.”

Appearing for car-buyer Amal Bose, Arunava Ghosh and Kallol Bose told the court that something needed to be done to stop the practice of hooliganism by banks. “It’s the foreign banks that have imported such acts. They even hire eunuchs to recover instalments,” Ghosh alleged.

The court directed car-buyer Bose to pay two instalments by July 14 and fixed the matter for hearing on July 21. During the hearing, high court advocate Pratap Chatterjee told the court that some other financial institutions wanted to be added as parties to the case. The bench allowed the inclusion.

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