Police ordered to pursue legal action over forcible seizure of defaulted leased assets

•  Companies told to obtain Court order to recover possessions
•  IGP says disciplinary action will be taken against police officers who disobey instructions

The Inspector General of Police (IGP) has instructed police officers to investigate and pursue necessary legal action over complaints on attempts to forcibly seize vehicles and other assets by finance and leasing firms over unpaid loan and lease installments.

In a circular issued on December 21, IGP Chandana D. Wickramaratne stressed that companies in such instances must file a case before a District Court to obtain an order to recover the possession as stipulated under 27th and 28th Sections of the Lease Financing Act No. 56 of 2000. 

Although a similar circular was issued last year, concerns have been raised over the higher number of incidents reported with regard to forceful acquisition of vehicles and the failure of the police officers to act on such complaints lodged by vehicle owners. 

The IGP stated that strict disciplinary actions would be taken against police officers who disobey the instructions.
The circular was issued following a meeting with the IGP and representatives of Association of Leasing and Debt Installment Payers on December 15.

The Association of Leasing and Debt Installment Payers President Asanka Ruwan Pothupitiya accused finance and leasing firms on unleashing fear and physical violence on their customers through their agents, in the guise of ‘seizures.’ He highlighted that most recently a pregnant woman was assaulted by seizures of a leading finance company in Polgahawela when attempting to forcefully seize a vehicle over payment arrears.

Although clear rules have been set out in the Lease Financing Act No. 56 of 2000 on acquiring vehicles and other assets taken on lease, Pothupitiya pointed out that finance and leasing companies are not acting in line with these rules.
Moving forward, he stressed that directors and other officials of such finance and leasing companies along with their agents would be taken to courts by the Association of Leasing and Debt Installment Payers if these companies continue to act outside the law.