The West Bengal State Consumer Disputes Redressal Commission has ordered Cholamandalam Investment and Finance Company Limited to pay Rs 17.17 lakh to a woman whose commercial truck was unlawfully repossessed from a highway while her loan payments were fully up to date.
Holding the financier guilty of a gross deficiency in service and bad faith, the state panel ruled that lenders cannot exercise repossession when a borrower is actively maintaining payments on a specific asset. The tribunal awarded the borrower Rs 16.76 lakh in compensation for property loss, livelihood disruption, and mental distress, along with Rs 40,000 in litigation costs, while declaring the loan account entirely settled.
Arbitrary Highway Interception
The dispute originated on November 10, 2018, when agents acting on behalf of the finance company intercepted and seized Sampa Basak’s goods vehicle on a highway as it was transporting food items. Basak had taken a loan of Rs 21,46,248 under an August 31, 2017 agreement to purchase the vehicle, committing to clear the loan through 46 monthly installments of Rs 64,641 starting September 28, 2017.
After police declined to register her complaint regarding the sudden seizure, Basak approached the consumer panel seeking redress for loss of livelihood and distress.
A bench comprising Judicial Member Rajes Guha Ray and Member Santanu Saha found that Basak had consistently paid her installments, leaving no overdue amounts on the truck’s account at the time of seizure. The commission emphasized that alleged defaults in separate loan accounts could not justify taking possession of the vehicle.
Furthermore, the panel noted that the finance company failed to serve the mandatory seven-day advance notice prior to taking the vehicle, pointing out that a notice dated November 13, 2018, was issued three days after the truck had already been seized.
Rejection Of Financier Defences
In its defense, Cholamandalam argued that the transaction was governed by a hire-purchase agreement under which ownership remained with the lender until full repayment. The company contended that Basak had defaulted and that she was ineligible for protection under consumer law because the vehicle served a commercial purpose.
The commission rejected these arguments, determining that Basak qualified as a consumer under the Consumer Protection Act, 1986, as there was no evidence demonstrating that she operated a large-scale commercial transport business.
Financial Relief And Settlement Terms
Addressing the appropriate remedy in its July 30 order, the tribunal observed that physically returning the vehicle after nearly six years would be an empty gesture, as the truck is no longer roadworthy and would demand substantial financial expenditure to repair.
To compensate for the loss, the commission awarded Basak Rs 8,76,974 for loss of property, Rs 5 lakh for loss of livelihood and business disruption, Rs 3 lakh for mental agony, and Rs 40,000 for litigation expenses, bringing the total payout to Rs 17,16,974.
The commission instructed the finance company to disburse the full sum within 45 days, barred the lender from raising any future claims against the borrower, and ruled that failure to pay within the specified timeframe will attract an annual interest rate of 9 per cent from the date of default until full realization.
