A Delhi court has rapped a finance company for forcibly taking away a man’s loaned vehicle, selling it off at a meager amount without the owner’s knowledge and initiating arbitration proceedings to recover dues.
The court said the procedure adopted by Shri Ram Transport Finance Company Ltd was illegal being in violation of rights of citizens and public interest and also contrary to the fundamental policy of the law.
Additional District Judge Kamini Lau also set aside the arbitration proceedings in which the award was passed against the car owner saying material facts, including selling of the vehicle to a third party, were withheld by the firm from the arbitrator.
The court passed the order while hearing an appeal against the order of an arbitrator filed by Nandan Singh Bisht, a driver, submitting that he had taken vehicular loan of Rs 1.4 lakh from the firm in 2008 for buying a car whose purchase value was Rs two lakh.
The man said he partially paid back loan amount till November 2009 after which the firm illegally snatched away the hypothecated vehicle in December 2009 without any notice and sold it for a meager amount of Rs 25,000 within two years of purchase.
Thereafter, the firm initiated arbitration proceedings to recover the shortfall but did not give any notice to Bisht, he said, adding that, he came to know about the arbitrator’s ex-parte award against him when he received a notice from a court on execution petition.
The court said the award was obtained by concealment and withholding of material facts before the arbitrator or by placing incomplete facts before him and it was “contrary to the fundamental policy of the Indian Law and was in violation of public interest, for which it was required to be set aside.
It set aside the arbitration proceedings saying there was no valid service of notice of the proceedings to Bisht and concealed facts from the arbitrator regarding repossession of the vehicle and its further sale to a third party.