Can bank take custody of hypothecated vehicle for 3 EMI's Due?
I have taken loan for my car from Kotak bank for 3.7 lakhs for 5 years. I have cleared all EMIs except 3 EMIs (as on 24-04-2014 )which were dishonored due to insufficient fund. But, Now bank has taken vehicle into their custody giving arbitrator notice. Now, when I ask for vehicle, they are saying that I have to pay outstanding of 3 EMI + 3 advance EMI + 12,000 legal fees +17,000 penal charge etc, including all it will be around 80,000+ . They are saying that, I have to pay this amount or foreclose the loan paying 2,69,000. There are only 24 EMIs left of Rs.8518 each. Please suggest me the what legal options I have. Please also suggest I can do?
Thanks in advance
Asked in Property Law from Bangalore, Karnataka
read terms and conditions of your agreement . there must be penal clauses mentioned in agreement in case of default in payment of EMI
they can not take vehicle back,they should have filed suit for recovery
Advocate, New Delhi
Hi, pls inform me when your cheque is dishonored and when they taken the car and when the notice was sent then we can guide you in better way.
Bankers will seize the vehicle based on the agreement you have signed. Basically this is the mistake every one will do while taking loan because the focus will be only on the loan amount and many people will not read the contents before signing the loan documents. You can file a suit in consumer court seeking the court direction to pay only your outstanding EMI and interest charges for the amount outstanding instead of paying penalty and huge legal charges.