Case Study:Sh. Bhupinder Sondhi v Abn Amro Bank

Sh. Bhupinder Sondhi v Abn Amro Bank

Facts of the case:

  • The plaintiff, Sh. Bhupinder Sondhi, had approached the defendant bank seeking financial support to buy motorcar Santro in the February of 1999.
  • A loan of Rs.2,54,000/- was allowed to the plaintiff. The market price of the said car as of 08.02.1999 had been Rs.3,08,504/- and the plaintiff had paid Rs.65,000/- from his own pocket for other necessary installations in the car.
  • The said car was hypothecated by the bank and the plaintiff had to sign several documents for the same. The plaintiff had to pay Rs.6165/- monthly for a period of five years with effect from 08.02.1999.
  • The plaintiff had paid an approximate of Rs. 80,000/- till the November of 1999, but due to serious illness of wife and daughter, he had failed to pay the instalments in time till February of 1999. The bank had not taken any step to notify him of the amount due.
  • On 29.02.2000, two men had barged into the house of the plaintiff saying that the bank sent them. They demanded the keys and original documents of the car and forcibly and illegally drove it away along with all the belongings inside the car.
  • Thereafter, by a letter dated March 20th, the bank had intimated the plaintiff that they had sold the vehicle and that the proceeds from the same have been adjusted in the outstanding A/c.


The court observed that despite the plaintiff’s offering to give a written undertaking expressing his willingness to pay the dishonored monthly instalments and pay regularly the upcoming monthly instalments, the bank had not paid any heed and had sold the car without any prior notification. It was further noticed from the medical records that he was genuinely unable to pay due to his wife and daughter’s illness. The court ordered the pending and future interest to be offered @ 6% p.a. in favor of the plaintiff. Further a compensation of Rs.30,000/- was awarded towards loss of reputation and mental harassment. The cost of the suit was also awarded in favor of the plaintiff.

Learnings from the case:

It is very important to read and understand the documents that a person signs as a customer. In case of the agreement of hypothecation a creditor cannot forcibly repossess the hypothecated item though they can enforce the same through court. Repossessing the hypothecated goods against the wishes of the hypothecator is taking control of law and is considered illegal.