Vehicle auction without intimation and asking to pay loss amount of 30000
8 months ago
In 2017, my friend purchased a bike in installments. Unfortunately, after making payments for 6 months, he faced some reasons that led to a 4-month EMI lapse. Without prior notice, the finance company repossessed the bike and auctioned it. Now in 2023, they are sending messages demanding a payment of 30000 INR due to the losses incurred by the company. They have also warned of potential actions. How can i solve this legally without paying anything and how to get NOC?
A.Dear Client,
Once the EMI against a loan is not repaid for consecutive 3 times by the borrower for any reason whatsoever, it is treated as NPA. Accordingly, the Bank sends notice to the Borrower asking him/her for repayment of the entire dues lying against his loan offering suitable terms. In the absence of any response from the Borrower, they started the routine process of action prescribed under relevant laws for recovery of debt lying outstanding against the Borrower and the Guarantor including filing of civil suit against the borrower for recovery of dues and for an order for seizure of the Vehicle. On receipt of an order of seizure, the vehicle is seized and sold on auction to meet the outstanding amount of loan of the borrower, and in case the value of the vehicle sold on auction falls short of your dues, then the financer Bank may send you notice demanding the shortfall amount of loan and can file a civil suit for recovery of dues. But such a notice is required to be made or a civil suit claiming to be filed within the period of three years otherwise it may be barred by the law of limitation. So, in the prevailing situation, reach out to an Advocate for guidance and steps and also for service of a legal notice against the demand notice of the Bank.
Once the EMI against a loan is not repaid for consecutive 3 times by the borrower for any reason whatsoever, it is treated as NPA. Accordingly, the Bank sends notice to the Borrower asking him/her for repayment of the entire dues lying against his loan offering suitable terms. In the absence of any response from the Borrower, they started the routine process of action prescribed under relevant laws for recovery of debt lying outstanding against the Borrower and the Guarantor including filing of civil suit against the borrower for recovery of dues and for an order for seizure of the Vehicle. On receipt of an order of seizure, the vehicle is seized and sold on auction to meet the outstanding amount of loan of the borrower, and in case the value of the vehicle sold on auction falls short of your dues, then the financer Bank may send you notice demanding the shortfall amount of loan and can file a civil suit for recovery of dues. But such a notice is required to be made or a civil suit claiming to be filed within the period of three years otherwise it may be barred by the law of limitation. So, in the prevailing situation, reach out to an Advocate for guidance and steps and also for service of a legal notice against the demand notice of the Bank.
Helpful
Helpful
Share
A.Dear Client,
Review the Contract: Your friend should review the contract he signed with the finance company when he purchased the bike in installments. Pay close attention to the terms and conditions, particularly those related to default, repossession, and actions the finance company can take in case of non-payment.
Demand for Explanation: Your friend can write a formal letter to the finance company, requesting a detailed explanation for the repossession and auction of the bike, especially if there was no prior notice. Request them to provide evidence of proper legal procedure followed during the repossession.
Dispute Resolution: If communication with the finance company does not lead to a satisfactory resolution, your friend can consider exploring dispute resolution mechanisms such as consumer forums or arbitration, if such options are provided for in the contract or under Indian law.
Prove the Auction Value: If the finance company claims that he owes them money due to losses incurred, your friend has the right to ask for documentation and evidence of the auction process, including the value for which the bike was sold. This can help ensure that he is being charged fairly.
Check for Violations: If the finance company did not follow the proper legal procedures during repossession, your friend might have grounds to challenge their actions. An attorney can help determine if any violations occurred.
Negotiation: If it's determined that your friend has some liability, he might consider negotiating with the finance company to reach a reasonable settlement. This could involve reducing the claimed amount or setting up a payment plan.
NOC (No Objection Certificate): If your friend wants to obtain a No Objection Certificate (NOC) from the finance company, which confirms that he has fulfilled his obligations, he might need to clear any outstanding dues. If there's a dispute about the amount, resolving it through negotiation or legal channels would be advisable.
Thanks
Review the Contract: Your friend should review the contract he signed with the finance company when he purchased the bike in installments. Pay close attention to the terms and conditions, particularly those related to default, repossession, and actions the finance company can take in case of non-payment.
Demand for Explanation: Your friend can write a formal letter to the finance company, requesting a detailed explanation for the repossession and auction of the bike, especially if there was no prior notice. Request them to provide evidence of proper legal procedure followed during the repossession.
Dispute Resolution: If communication with the finance company does not lead to a satisfactory resolution, your friend can consider exploring dispute resolution mechanisms such as consumer forums or arbitration, if such options are provided for in the contract or under Indian law.
Prove the Auction Value: If the finance company claims that he owes them money due to losses incurred, your friend has the right to ask for documentation and evidence of the auction process, including the value for which the bike was sold. This can help ensure that he is being charged fairly.
Check for Violations: If the finance company did not follow the proper legal procedures during repossession, your friend might have grounds to challenge their actions. An attorney can help determine if any violations occurred.
Negotiation: If it's determined that your friend has some liability, he might consider negotiating with the finance company to reach a reasonable settlement. This could involve reducing the claimed amount or setting up a payment plan.
NOC (No Objection Certificate): If your friend wants to obtain a No Objection Certificate (NOC) from the finance company, which confirms that he has fulfilled his obligations, he might need to clear any outstanding dues. If there's a dispute about the amount, resolving it through negotiation or legal channels would be advisable.
Thanks
Helpful
Helpful
Share
Read Related Answers
Refund amount
Dear Client,
After serving a legal notice to the selling store, file a complaint against them over alleged deficiency in service and unfair trade practice before the Dist. Consumer Commission under Se...
Shopkeeper using my credentials to generate bill
Dear Client,
In the given situation, serve a legal notice to the concerned shopkeeper and on receipt of a hard copy of the bill file a complaint against the Shopkeeper over alleged unfair trade practi...
fake delivery product
Dear Client,
Until and unless goods are delivered as per the order of the customer, a service provider, FLIPKART cannot update its status as delivered which amounts to deficiency in service and unfai...
Bike vibration
Dear Sir,
Please ask for replacement of the bike itself since you received the bike very recently otherwise get issue a legal notice and approach Consumer Forum.
should I file a case on interior designer
Dear Client, In the given situation, serve a legal notice to the concerned Interior Designer at his office address by Registered Post, and after waiting for at least 15 days file a complaint against t...
Read Blogs on Sale of Goods
Sale of Goods Lawyers
Find Lawyers by Location
