CHENNAI: A nationalised bank cannot take back a vehicle, for which it has lent money if the borrower defaults repayment, without following the due process of law, the Madras High Court has ruled. Justice V K Sharma gave the ruling while allowing a writ petition from G Palaniswamy, an agriculturist in Erode, praying for a direction to the local branch of the State Bank of India to hand over possession of the vehicle to him. The bank had lent Rs 7.74 lakh for the purchase of the tractor. “It is essential that the recovery agents refrain from taking any action that could damage the integrity and reputation of the bank and that they should observe strict customer confidentiality,” the judge observed, and added that the petitioner was entitled to Rs 20,000 towards cost.
The code for collection of dues and repossession of security provided that the bank and their agents should not intimidate or harass either verbally or physically any person in their debt collection efforts, including acts intended to humiliate him or her publicly, the judge pointed out.
The court did not accept the bank’s plea that police help was taken for seizing the tractor as there was no order of court or competent authority granting such assistance was placed on record.