‘Seized’ despite no loan default, woman truck owner wins Rs 17.17 lakh compensation

The dispute arose after Basak’s commercial truck was repossessed on November 10, 2018, while transporting food products. She alleged that the finance company’s agents intercepted and seized the truck on a highway without prior notice despite regular EMI payments, and that police refused to register her complaint, forcing her to approach the consumer commission.

‘Authorised repossession’

According to the complaint, Basak purchased the goods vehicle with a loan of Rs 21,46,248 from Cholamandalam Investment and Finance Company Limited under an agreement dated August 31, 2017, repayable in 46 monthly EMIs of Rs 64,641 from September 28, 2017.

She alleged that the truck was illegally repossessed on November 10, 2018 while transporting food products despite there being no default on the loan account. She claimed the financier failed to provide key loan documents or serve the mandatory prior notice before seizing the truck, and sought compensation for loss of livelihood, mental agony and litigation costs.

The finance company denied the allegations, contending that the transaction was a hire-purchase agreement under which it retained ownership of the vehicle until full repayment. It claimed the complainant had defaulted, the agreement authorised repossession, and she was not a consumer as the vehicle was used for commercial purposes. It also relied on Supreme Court rulings recognising a financier’s right to repossess vehicles under hire-purchase agreements.

Commission’s findings

• The commission held that Basak remained a consumer under the Consumer Protection Act, 1986, finding no evidence that she operated a large-scale commercial transport business.
• It found she had regularly paid the EMIs, and there was no overdue amount on the truck’s loan account when it was repossessed, adding that alleged defaults in other loan accounts could not justify its seizure.
• The commission further held that the financier failed to prove it had served the mandatory seven-day prior notice before repossessing the truck, noting that the notice dated November 13, 2018 was issued only after the November 10 seizure.
• The sudden, forceful interception and repossession of the vehicle without a prior written notice and in the absence of an active default constitutes a flagrant deficiency in service.
• Returning the physical vehicle to the complainant now would be an empty remedy; it is no longer ply-worthy and would require massive financial investments in repairs and maintenance just to make it operational.

Holding the finance company guilty of deficiency in service, the commission directed it to pay Rs 16,76,974 as compensation, Rs 8,76,974 for loss of property, Rs 5 lakh for loss of livelihood and business interruption, and Rs 3 lakh for mental agony, besides Rs 40,000 as litigation costs, taking the total payout to Rs 17,16,974.

It also ordered the loan account to be treated as fully settled, barred the financier from raising any further claims, and directed payment within 45 days, failing which the amount specified in the order would carry 9 per cent annual interest from the date of default until realisation.

Consumer takeaway

The ruling underscores that finance companies cannot repossess a financed vehicle through force or without following due process, particularly when there is no active default on the specific loan account. It also reiterates that borrowers using commercial vehicles to earn their livelihood may still qualify as “consumers” under the Consumer Protection Act.

Consumers facing similar grievances may contact the consumer helpline in their respective states (West Bengal: 033–2252–0448) or dial the National Consumer Helpline at 1915 for assistance.

Woman’s truck for livelihood ‘constantly broke down’, she wins free repairs, Rs 25,000

Punjab consumer commission has ordered the manufacturer and authorised dealer of a BharatBenz truck to repair it free of cost and pay a woman Rs 25,000 after she spent months taking the vehicle to workshops over repeated mechanical problems instead of using it to earn a living for her family.

The Gurdaspur District Consumer Disputes Redressal Commission president Lalit Mohan Dogra and member Bhagwan Singh Matharu were hearing Lakhbir Kaur’s complaint against Daimler India Commercial Vehicles Private Limited and its authorised dealer over alleged defects in a truck bought to earn her family’s livelihood, including whether her consumer complaint was maintainable.

“The opposite parties are claiming itself to be very reputed and High Technology Company but failure to remove the defects as claimed by the complainant definitely amounts to deficiency in service on the part of the opposite parties,” the commission said on July 2.

Lakhbir Kaur bought the BharatBenz truck on February 24, 2023, for Rs 25.25 to support her family’s livelihood. She paid Rs 16.50 lakh upfront, financed the balance through a loan, and spent another Rs 3.50 lakh on building the truck body before putting it on the road.

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