HDFC files loan recovery suit against client
HDFC Bank has filed a suit against a client for recovery of a car loan of Rs 1,94,910 despite auctioning the vehicle. The company managed to recover half of the loan amount through the auction, reports Kanchan Chaudhari.
HDFC Bank has filed a suit against a client for recovery of a car loan of Rs 1,94,910 despite auctioning the vehicle. The company managed to recover half of the loan amount through the auction.
The client, Tarulata Kanadia, says that she was given an eight-day notice by the bank before her vehicle was repossessed and auctioned.
Kanadia, a clerk with a private firm, booked a Tata Indica from Wasan Motors in June 2005. She had taken a loan of Rs 3,18,410 from HDFC Bank, which was disbursed to the car dealer in July 2005. However the delivery of the car took place only in January 2006. The Kanadias had spent Rs 70,000 on the car.
In March 2006, Kanadia received a notice from HDFC Bank, asking her to pay interest for six months before the vehicle was delivered. “We objected saying we were not liable to pay installment for the period when the car was not with us,” said Kaushik, Tarulata’s husband.
The bank confiscated the car on March 28, 2006 and auctioned it two days later. While the vehicle was purchased by Kanadia for Rs 3.67 lakh the auction price was just Rs 1.62 lakh — a depreciation of Rs. 1,94,910 in just three months.
Kaushik alleged that there was a nexus between the employees of the bank and the car dealer, cheating customers who purchased vehicles on loan. “Who would re-sell a car used for just three-months for half the original price?” he asked. Kanadia’s lawyer Nitin Vhatkar said that the bank’s suit was pending before the Prothonotary of the Bombay High Court.
Refuting the allegation, Pushkar Gupta, AVP, Corporate Communications, HDFC Bank said: “We have nothing to do with the delivery of the vehicle. That is between the dealers and the customer,” he said insisting that the bank is entitled to recover monthly installments right from the month of loan disbursal.
Ashwin Parekh, general manager, Wasan Motors claimed that there was nothing wrong in the whole transaction. “The transaction from our side is clear.”