Advocates:
For the Petitioners: M/s Sanjay Kumar Pandey, Badri Narayan Singh (in all), Manoj Kumar, Sushan Kumar Keshari (in 3456, 19461); Anil Kumar Verma (in 16155); Indira Kumari(in 7944, in 8056).
For the Respondents: M/s Anuj Kumar (Adv.), Manoj Kumar, AC to GP 24 (in 3456); Anil Kumar Singh (Gp26)(in 16155); Dr. Krishna Nandan Singh (ASG) (in 19461); Md. Nadim Seraj (Gp5) (in 7944); Divya Verma AC to AAG-3 (in 8056); Rajiv Kumar and Manoj Priydarshi (in 3456); Y.V. Giri, Sr. Adv., Prabhakar Nath Rai(in 16155).

The legal document emphasizes that private financial institutions, such as banks and finance companies, are not considered state actors or instrumentalities of the State within the meaning of constitutional provisions that enforce fundamental rights against the State. However, the courts have recognized that certain fundamental rights, particularly those related to life, liberty, and livelihood, can be enforced horizontally against non-State actors if their actions violate constitutional principles or fundamental rights.

The document underscores that the actions of these financial institutions in repossessing vehicles must strictly adhere to the procedures established under relevant laws, notably the SARFAESI Act, 2002, and the RBI guidelines. Repossession cannot be carried out through force, violence, or illegal means, such as using goons or musclemen, as such conduct is in direct violation of the law and fundamental rights. The institutions have a constitutional obligation to act within the bounds of legality and not to infringe upon individuals’ rights to live with dignity and livelihood.

Furthermore, the loan agreements creating security interests in vehicles do not inherently grant the right to repossess by illegal or violent means. The enforcement of security interests must follow the statutory procedures, including proper notices, valuation, and auction processes, and must respect the rights of the borrower. Any deviation from these procedures, especially acts of force or illegal seizure, is deemed unlawful and contrary to constitutional mandates.

The courts have directed law enforcement authorities to prevent illegal repossessions and to investigate complaints of forceful seizures independently and lawfully. They have also emphasized that private actors, including banks and financial institutions, must exercise their rights within constitutional limitations and cannot override the rule of law.

In conclusion, while private financial institutions have the right to recover dues through lawful means, they are constitutionally bound to follow the legal processes prescribed by law. Violations, especially involving force or illegal methods, are illegal, violate fundamental rights, and may lead to legal consequences, including contempt proceedings. The courts have also ordered that in cases where vehicles have not yet been sold, the parties should reconcile accounts, and in cases of illegal seizure, the petitioners are entitled to compensation and costs.