ABN AMRO fined 2.6L for car seizure

http://www.financialexpress.com/news/abn-amro-fined-2.6l-for-car-seizure/1000108/

ABN AMRO Bank has been directed by a consumer forum to pay Rs 2.6 lakh to a man for seizing and selling his car, bought on loan from it, without giving him notice after he failed to pay instalments for four months.

The New Delhi District Consumer Disputes Redressal Forum also said the decision of the bank, known as Royal Bank of Scotland in India, to seize the car without issuing notice and then selling it within two days without informing the loanee was a violation of the RBI's directions to banks.

The forum observed complainant Ram Kewal Yadav had not paid installments from September 2005 and the bank had seized the vehicle four months later on December 30, 2005.

"In such a case, further notice was required as per settled law in the Supreme Court. But, sale of vehicle within two days of repossession, without informing complainant is serious deficiency and violation of RBI directions to banks. It denied complainant the opportunity to pay the balance," the bench presided by C K Chaturvedi said.

Yadav in his complaint had said he had obtained a loan of Rs 3,51,000 from the bank in October 2002 to buy a Santro car and the amount was to be repaid in 60 instalments of Rs 7,200 per month.

He had said that after paying around Rs 2.55 lakh till August 2005 he couldn't make further payments due to financial constraints and had requested for more time from the bank. But on December 30, 2005, the bank had repossessed the car by force, Yadav had alleged adding when he approached it to pay the due instalment, he was not allowed to do so and the car was sold on January 2, 2006.

The bank in its reply had said it had issued a number of reminders to Yadav to pay his dues and was within its rights to repossess the vehicle of a defaulter.

Rejecting the bank's contention, the forum said it had not placed on record any reminder issued to Yadav asking him to pay the amount and "awarded (Yadav) compensation of Rs 2.5 lakh, market value of the car after approximately 4 years, and Rs 10,000 as litigation charges."