What can happen if original buyer fails to pay the loan amount on bike

22-Apr-2023 (In Banking / Finance Law)
I recently bought a second hand bike from a person and made all my payments. Later on I came to know that the seller had purchased the bike on emi from a finance company. It is under hypothecation of the finance company. He has also not paid his dues. He just gave me a declaration on a bond paper that it would be my bike and that he would clear the loan payment and transfer the name. What would happen if he dosen't pay the loan? Will the finance company take away my bike or will I be made to clear his dues? If yes then what are the legal proceedings available for recovering my money?
Answers (3)

Answer #1
610 votes
If the borrower does not pay the outstanding amount ,then finance company has right to take away the hypothecated goods.but you may approach the finance company that u r willing to pay the outstanding of the said bike and in that event if finance company is agree then your problem may be sought out.
Answer #2
867 votes

I would suggest you connect with the Officer in Charge in Managerial position of the Branch office from where loan was disbursed and repayment was done. After getting the due status of file and applying for NOC can only can you have a good sleep.

Answer #3
924 votes
it is no to possible to suggest you correctly without seeing the documents. but generally if the loan is not repaid then the finance company can claim the said bike from you. there might be a provision if admitted by the finance company that you can clear up the loan and take the said bike. you may also claim your money from that person by showing the papers you have if it is authenticated.

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