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Hon’ble High Court held that (i) it appears that the contesting respondents while seeking their private power to recover the loan by repossessing the vehicle can exercise their rights only within the constitutional limitations. A law such as SARFAESI Act, 2002 is a complete code unto itself and even the RBI guidelines have given much emphasis that where Banks have incorporated a repossessions clause in the contract with the borrower and rely on such repossession clause for enforcing their rights, they should ensure that the repossessions clause is legally valid, comply with the provisions of the Indian Contract Act in letters and spirit and ensure that such repossession clause is clearly brought to the notice of the borrower at the time of execution of the contract.
(ii) A recovery agent cannot intercept a bus or a truck or a scorpio vehicle on way and direct the passengers to come down and leave the vehicle, unless they obtain appropriate order in accordance with law and such orders are required to be executed only in accordance with law.
(iii) In the garb of a power acquired by the financier under the loan agreement to re-possess the vehicle, they cannot be allowed to take the law into their hands and enforce the loan agreement by violating the legislative mandate and the regulatory law such as as the Act of 2002.
(iv) The Superintendent of Police of all the districts in the State of Bihar are directed to ensure that within their jurisdiction no recovery agent of the Bank and Financial Institution may take the law into their hands, intercept the vehicles on way and takes possession of the vehicle in default without an order of the competent court of law. Any seizure/repossession of the vehicle in default may be given effect to only in accordance with the law and the procedure established by law.