Borrowers Taking Law Into Their Own Hands; Cannot Tolerate It: Bombay HC Expresses Concern

The Division Bench of Justice BP Colabawalla and Justice Somasekhar Sundaresan made this statement while dealing with a case that. “We find that after giving a solemn undertaking to this Court, the borrowers have sought to put extra-judicial pressure on the authorised officer of the Petitioner-NBFC. This cannot be tolerated even for a minute. We are increasingly finding that borrowers are taking the law into their own hands”.

For the property to be put up for auction, the Court ordered the borrowers to hand over possession of certain property (a secured asset) to Cholamandalam Investment & Finance Company. The borrowers responded by declaring that they would hand over the possession of the secured asset to the NBFC.

A grievance was made by the learned Counsel for the Auction Purchaser that although possession of the secured asset has been handed over to the Petitioner-NBFC, there is an apprehension that the Petitioner-NBFC will not put the successful Auction Purchaser in possession because the borrowers have handed over possession of the secured asset to the PetitionerNBFC under a condition that it shall not part with possession of the secured asset to anyone else.

The Court enquired the authorised officer of the Petitioner-NBFC as to whether he took possession pursuant to such a letter and why. The officer informed the Court that at the time of taking possession, there was an M.P. and M.L.A. present at the site along with 30 to 40 people and he was forced to accept the said letter from the borrowers containing such a condition. The officer also submitted that all that the Petitioner-NBFC has done is acknowledge the said letter but not agree to any condition.

The division bench also observed that even though physical possession of the secured asset had been handed over to the Petitioner-NBFC on an earlier occasion, the borrowers had trespassed into the secured asset by breaking open the locks and re-entering the same. A First Information Report to that effect is also lodged against them.

The Court directed the borrowers and their Advocates to remain present in Court to explain why they should not be punished for contempt of Court for trying to over-reach the orders passed by us.

Finally, the Court warned, “If they shall not remain present on the next date, we shall not hesitate to issue bailable/non-bailable warrants in their name, to secure their presence”.

Cause Title: Cholamandalam Investment Finance Company Ltd v. State of Maharashtra and Ors (W.P.No. 3132 of 2024)

Appearance:

Petitioner: Advocates Charles D’souza and Alok Mishra

Respondent(s): Advocates Dhriti Kapadia, ziyad Madon, Nilesh Gala, Shah, and Manish Gala.