By The Pulseline News Desk
The Sri Lanka Police have moved to clarify the legal boundaries surrounding the repossession of vehicles and other leased property, stressing that police officers have no authority to take part in the actual seizure of vehicles by leasing and finance companies.
The clarification comes amid continued disputes between lessors and lessees over the recovery of vehicles and other assets when lease payments fall into arrears.
According to the Police Media Division, the procedures governing such repossessions are set out under the Finance Leasing Act No. 56 of 2000, which requires lessors and their authorised representatives to follow prescribed legal procedures when seeking possession of leased property.
Police officers have been instructed on the relevant provisions through official circulars.
Police role limited to maintaining public order
The Police emphasised that their role in a leasing-related repossession is limited to maintaining public order.
Where a lessor or its authorised representative gives prior notice and requests police protection, police officers may be present to prevent disturbances or maintain public peace.
However, officers are not authorised to participate in taking possession of the vehicle or other leased equipment.
This distinction is significant because the presence of police at a repossession does not give a finance company or its representatives police authority to seize an asset.
Under the prescribed procedure, a lessor may take possession of leased property only where the lessee does not offer resistance.
What happens when the lessee resists?
The Police said the situation changes when a lessee resists the repossession.
If resistance is encountered, the lessor cannot proceed by force. Instead, it must seek appropriate legal remedies through the relevant District Court in accordance with the Finance Leasing Act.
The Police also warned that a lessor or authorised agent who violates the provisions of the Act commits an offence.
This places responsibility on finance companies and their representatives to ensure that repossession activities remain within the limits established by law.
Complaints can be made to Police
The Police have also clarified that lessees are not without legal recourse if they believe a repossession has been carried out unlawfully.
Where a vehicle or other leased property is taken contrary to the prescribed legal procedure, the affected party can lodge a complaint with the Police.
Such complaints will be investigated, and where offences including robbery, theft or criminal trespass are established, appropriate legal action will be taken.
The clarification therefore draws a clear line between the lawful recovery of leased property and conduct that may amount to a criminal offence.
Leasing agreements and hire-purchase agreements are different
The Police further highlighted an important distinction between leasing arrangements and hire-purchase agreements.
Their authority to intervene in matters relating to the repossession of leased property applies to agreements governed by the Finance Leasing Act.
The Consumer Credit Act No. 29 of 1982, however, does not contain corresponding provisions authorising police intervention in relation to hire-purchase agreements.
This means that the legal framework applicable to a particular vehicle or equipment agreement must first be established before determining the role, if any, that Police can play.
Police urge parties to avoid confrontation
The Police have urged both lessees and leasing and finance companies to comply with the terms of their agreements and the relevant legal provisions.
They also called on all parties to take steps to preserve public peace when disputes arise over leased property.
The clarification effectively places the responsibility for lawful repossession on the lessor while limiting the Police role to maintaining public order and investigating any criminal offences that may arise.
For vehicle owners facing repossession, the message is equally significant: the presence of Police officers at a repossession does not mean officers are authorised to seize the vehicle on behalf of a finance company.
Where a dispute involves resistance or disagreement over possession, the prescribed legal process must be followed rather than allowing the situation to escalate into confrontation.
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