SUNDARAM FINANCE LIMITED Vs. TRANSPORT COMMISSIONER

JUDGEMENT

(1.) The writ petitioner is a non-banking finance company registered under the provisions of the Indian Companies Act, 1913. It is engaged in the business of extending hire purchase / loan facilities on Automobiles and Machinery and leasing of vehicles / equipments / machinery.

(2.) The third respondent herein approached the writ petitioner in the month of May 2016 requesting for loan for purchase of the petition mentioned vehicle. He entered into a loan agreement dtd. 1/6/2016 with the writ petitioner. As per the terms of the loan agreement, the total loan amount of Rs.8,74,250.00 was repayable in 59 monthly installments. The first installment commenced on 1/6/2016 and the last installment was to end on 10/4/2021. The third respondent hypothecated the vehicle in favour of the writ petitioner and the same was duly recorded in the registration certificate also.

(3.) According to the petitioner, the third respondent was highly irregular in paying the installments and was a defaulter. The petitioner, therefore, sent a legal notice on 8/5/2017 calling upon the third respondent as well as the guarantor to settle the claim or surrender the vehicle. The third respondent did not comply with the demand made by the petitioner. Since the default persisted, the petitioner initiated arbitration proceedings before the Sole Arbitrator appointed in terms of the loan agreement. The Arbitrator passed the award dtd. 23/5/2018 directing the third respondent and the guarantor to pay a sum of Rs.5,46,446.65 with interest @ 18% from 12/12/2017 till the date of realization. The third respondent failed to comply with the award. Therefore, the petitioner seized the vehicle on 14/3/2018. It was intimated to the third respondent vide letter dtd. 20/3/2018. The third respondent was given an opportunity to settle the claim and take back the vehicle. The third respondent failed to avail the said opportunity.