Supreme Court awards ₹10 lakh compensation for illegal vehicle repossession

The case involves a dispute between a truck owner (Hari Dutt Sharma) and a financier (Cholamandalam Investment and Finance Company Limited) over the repossession of a vehicle by force without proper notice, challenging the legality of the financier's actions under loan agreement terms and RBI guidelines.

Appellant: Hari Dutt Sharma; Respondents: State of U.P. & Ors.; Bench: Alok Aradhe, J.

• The Court held that financiers cannot repossess vehicles by force, deceit, or in violation of loan agreement terms.
• The Court awarded Rs. 10 lakh compensation to the truck owner for illegal repossession.
• The Court emphasized that repossession must be done through lawful means and not by 'goondas' or muscle power.
• The Court referenced RBI guidelines prohibiting undue harassment and use of muscle power in loan recovery.
• The Court directed that repossession clauses in loan contracts must conform to RBI guidelines and Indian Contract Act.

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