Ishrat Noor v ICICI Bank Ltd.

Facts of the case:

  • The plaintiff was engaged in the business of printing and desired to purchase a commercial vehicle under hypothecation from the bank. Plaintiff had furnished relevant document in order to get a loan for the vehicle (Tavera) which was worth Rs.7,68,000/-
  • The defendant asked the plaintiff for a payment of Rs.40,000/- which was paid on 05.03.2008. However no receipt was ever issued for the same and when the plaintiff went to take delivery of said vehicle, he was asked to further pay an amount of Rs. 1,10,000/- stating that the loan amount was reduced by the bank. Thereafter, he was again asked to pay a total of Rs. 5 Lacs for delivery of vehicle. After the payment the plaintiff took delivery of said vehicle on 11.03.2008.
  • It was alleged that the defendant had taken 8 signed cheques in blank along with other documents and the loan was sanctioned for up to Rs.2,58,000/-. It was further alleged that the payment for Rs.1,27,000/- was made to the bank through credit card.
  • Furthermore it was stated that one blank cheque was encashed for an amount of Rs.20,000/- on SBI by the defendant and that no statement of loan had been provided.
  • In the evening of 31.07.2008, when the plaintiff was returning from Delhi to Panipat, it was further alleged that some associates of the defendant had tried to forcibly take possession of the vehicle. The plaintiff was also being threatened with misuse of the blank cheques.


The court observed as follows “Defendant appearing in the matter had not filed written statement despite several opportunities being given by the Court, therefore, the defense of defendant was struck of.” The court held that the plaintiff was only required to prove a case based on the first impression, which has been considered successfully done in this case. The court restrained the defendant or any associates from taking away the vehicle. They were further order to return the blank cheques and to give the documents of the vehicle to the plaintiff and to deliver the statement of the loan.

Learnings from the case:

Threats against misuse of cheques and sale of vehicle are considered a crime and are thus illegal. It is further illegal to file and encash a signed blank cheque that was not filled by the owner of the cheque. It is very important to read and understand the terms of any contract and to be clear on the facts of the agreement. Under hypothecation, repossession of hypothecated item forcibly is considered illegal. Forcible repossession is advised against by the Code of Conduct that banks need to adhere to.