Hire purchaser of car ends up facing music in court

A resident of Kanniyakumari district had to face the music in the Madras High Court Bench here on Thursday for having allowed his car under hypothecation to be taken away by the financier due to default of loan repayment and then lodging a vehicle theft complaint against a bonafide purchaser of the vehicle in an auction conducted by the finance firm.

Finding that the Arumanai police had jumped into action on the basis of a complaint made over phone and went to the extent of seizing the vehicle from the auction buyer, Justice P.N. Prakash directed the police to return the vehicle to him immediately. The hire purchaser was also ordered to pay a cost of Rs. 5,000 to the person against whom the complaint was lodged.

It was trite that under an hire purchase agreement, if there was a default in payment, the hirer had the authority to seize the vehicle and no criminal prosecution could be launched against the hirer as it was covered by the contract, the judge said while dismissing a writ petition filed by the hire purchaser, Albin Benedict, seeking a direction to the police to hand over the car to him.

Mr. Justice Prakash pointed out that TVS Credit Services had taken away the car from the writ petitioner on October 26, 2015, and sold it in an auction on September 17, 2016. However, on February 17 this year, he made a phone call to the police control room and complained of his car being in possession of an individual in Thuckalay.

Acting on the basis of the oral complaint, the police seized the vehicle from the auction buyer after suspecting it to have been stolen. It was only in the subsequent enquiry it came to light that the finance company had taken possession of the car in accordance with law on account of default of payment of the car loan and sold it through auction.

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