The High Court · 2025

10. IDFC First Bank, Rep by its authorized Sigpatory (credit card Division) The Square, C-61, Ci Block, Ground Floor to B"' Floor, Bandra Kurla Complex, Bandra East, Mumbai,400051

11.KAP|L Chit Private Limited, Rep by its authorized Signatory,22-98, Malkajgiri Rd, Sivapuri Colony, Malkajgiri, Secunderabad, Telangana-500047

12.lclcl BANK, lclcl Bank Towers, Rep by its Authorized Signatory (Credit Card Division), Bandra Kurla Complex Mumbai, MH-400051

13.ONE CARD FEDERL BANK, Rep by its authori2ed Signatory (credit card Division) West Bay, Survey No.278; Hissa No.4/3 palloud farm Phase ll, Baner, Taluka Haveli Baner Gaon, Pune-41 1045 l4.lndusland Bank l-td, Rep by its authorized Signatory (credit card Division) 8th Floor, Tower 1 l)ne lndbls Ctr,841, Senapati Bapat Marg, Elphinstn Rdff/), Mumbai-400013

15.Axis Bank Ltd,, Rep by its Authorized Signatory Axis House, P.B.Marg, Worli Mumbai400025.

16.RBL Bank, (Credit Card Division) Rep by its Authorized Signatory One Word Center, Tower 28, 6th floor, 841 Senapati Bapat tVlarg, Lower Parel (W), Mumbai-400013

17. SBI Bank, ( Credit Card Division) Rep by its Authorized Signatory DLF lnfinity Towers, Tower C, '12th Floor, Block 2 Building 3, DLF Cyber City, Gurgaon- 122002

18.HDFC Bank, Credit Car Limited, 8th Floor, HDF 500 034. dD CB ivision Rep by its Signatory Authority HDFC Bank ank House, Rd No. 1, Banjara Hills, Hyderabad - ...RESPONDENTS Petition under Article 226 ol lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ, Order or Direction, more particularly one in the nature of a Writ of mandamus declaring the action of the Respondents no.3 to 1B in sending recovery agents to the residence of the Petitioner and threatening him and his family with the dire consequences, if loans are not repaid as illegal, arbitrary and against Articlel4, 19 86 21 of the Constitution of lndia and consequently to direct the Respondent No.3 to18 to forthwith stop sending recovery agents to the Petitioners residence and follow procedure as contemplated by law to recovery any loans that may be due to the Respondents. IA NO: 1 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the Respondents No.3 to 18 to forthwith stop sending recovery agents to the Petitioners residence and not to harass the petitioner pending disposal of main Writ Petition. Counsel for the Petitioner : SRI ABDUL AZAM KHAN counser for the Respono"'o' B:'o:0ti[tfE]":yil3f;;0," The Court made the following: ORDER HON'BLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION No.14889 OF 2025 ORDER: Heard Sri Abdul Azam Khan, learned counsel appearing on behalf of the petitioner and Sri Gadi Praveen Kumar, Deputy Solicitor General of India appearing on behalf of the respondents.

2. The oetitioner aDDroa ched the Court seekino oraver as under: "....That this Hon'ble Court may be pleased to issue a Writ, Order or Direction, more particularly one in the nature of a Writ of mandamus declaring the action of the Respondents no.3 to 18 in sending recovery agents to the residence of the Petitioner and threatening him and his family with the dire consequences, if loans are not repaid as illegal, arbitrary and against Article 14, 19 & 21 of the Constitution oF India and consequently to direct the Respondent No.3 tolB to forthwith stop sending recovery agents to the Petitioner's residence and follow procedure as contemplated by law to recovery any loans that may be due to the Respondents and pass such other Order or Orders as this Hon'ble Court deem fit and proper in the circumsta nce of the case..." PERUSED T E RECORD:- 3. The case of the oetitioner in brief as Der the verments ade b t e affidavi lon r h the oet itioner in suooo rt of the ore nt writ Detiti on rs as u nd er: 2 SN,J W.P.No.14889 2025 It is the specific case of the petitioner that the petitioner comes from a respectable middle class family and is working in a software company earning decent salary and was leading a happy life along with his family members. The petitioner availed loans and credit card facilities from respondent Nos.3 to 19 and had been paylng the due amounts prompfly from time to time, petitioner along with his wife had started a clinic titled '.True Charm Aesthetic clinic" (OPC) Private Limited on 04.04.2022, but incurred heavy losses and petitioner's health also got seriously affected having been diagnosed with Hernia and Appendix in 2024 due to which petitioner became a defaulter having lost all his money. In view of the fact that entire savings of the petitioner got exhausted in repaying the loan amounts and petitioner's monthly earnings not being sufFicient enough to meet the day to day expenses of the petitioner and his family, the petitioner in spite of all his efforts was unable to pay the EMls to the respondents from 2024 onwards. It is further the case of the petitioner that as the EMIs were not paid, the respondent Nos.3 to 1B started harassing the petitioner to clear the entire dues in one go for which petitioner requested the respondents to provide some time to mobilize the funds, however the respondents had entrusted the task of recovery of amounts from the petitioner to the recovery agents employed by them ano ttTe- said recovery agents started 3 SN,J W.P.No.14889 2025 /,' trespassing into the house of the petitioner and started threatening the petitioner with dire consequences, if the entire outstanding dues are not paid immediately. The recovery agents are not allowing the petitioner to live in peace and are coming to petit.ioner's house at late nights and are making calls l at least 100 tc 150 times per day and are sending threatening messages to the petitioner and petitioner's wife and due to the said acts of thr: recovery agents of the respondents herein, the petitioner and his family members are facing serious humiliation. Aggrieved by the said action of respondent Nos.3 to 1B in sending recovery agents to the residence of the petitioner and threatening the petitioner and his family with dire consequences f loans are not repaid, the petitioner approached the Court by filing the present Writ Petition. DISCUSSION AND CONCLUSION:- DISCUSSION:- 4, The learned Counsel aooearino on behalf of the Detitioner mainlv outs-forth the followinq submissions:- i) The practice of hiring recovery agents should not be resorted to by the Banks and the Banks should resort only to procedure reccgnized by law where the borrowers commit default in payment of the loan installments. 4 SN,J W.P.No.l4889 2025 ii) The recovery of loans by the Banks and Financial institutions cannot be done otherwise than without fofiowing due process of law. iii) The guidelines, dated 12.08.2022 issued by the Reserve Bank of India are not being followed by the respondents and the respondent Nos.3 to 18 are sending recovery agents to the residence of the petitioner and threatening him and his family with the dire consequences, if loans are not repaid. iv) The repayment of loans of the petitioner cannot be the ground to the respondent Nos.3 to 18, to deprive petitioner's personal liberty. v) The procedure adopted by the respondent NOs. 3 to 18 for recovery of amounts from the petitioner is in clear violation of the rights guaranteed to the petitioner under Articles 14 and 21 of the Constitution of India. Based on the aforesaid submissions, the learned el a eafln on behalf of the e n r R that the Writ Petition should be allowed as Draved for.

5. The learned Deputy Solicitor General of India appearing on behalf of the respondents submits that the respondent Nos.3 to 18 are bound to follow the latest guidelines issued by the Reserve Bank of India on w / 5 SN,J W.P.No.l4889 2025 ,,2.O8.2O22 with regard to outsourcing of financial services-responsibilities of regulated entities employing recovery agents, which reads as follows:- "RBr/202.2-23/t1B DO R. ORG. RE C, 6s / 2r.04. r5B / 2022-23 August '.)., 2022 Madam/ Siir, Outsourcing of Financial Services - Responsibilities of regulated entities employing Recovery Agents The Reserve Bank of India has from time to time advised regulated entities (REs) that the ultimate responsibility for their outsourced activities vests with them and they are, therefore, responsible for the actions of their service providers including Recovery Agents (hereafter referred to as 'agents;').

2. It has been observed that the agents employed by Res have been deviating from the extant instructions governing the outsourcing of financial services. In view of concerns arising from the activities of these agents, it is advised that the Res shall strictly ensure that they or their agents dc not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude upon the privacy of the debtors' family members, referees and friends, sending inappropriate messages either on mobile or through social media, making threatening and/or anonymous calls, persistentlyl calling the borrower and/or calling the borrower before B:00 a.m. and after 7:00 p.m. for recovery of overdue loans, making false and misleading representations, etc. 3. The instructions contained in para 2 above shall supplemert and be read in conjunction with the existing guidelines/directions issued by the Reserve Bank of India, as amended from time to time, including those tabulated in An nex.

4. Any violation in this regard by REs will be viewed se rio usly. Applicability 6 SN,J W.P.No.l4889.2025

5. This circular shall apply to the following REs: (a) All Commercial Banks (including Local Area Banks, Regional Rural Banks, and Small Finance Banks) excluding Payments Banks; (b) All All-India Financial Institutiops (viz. Exim Bank, NABARD, NHB, SIDBI, and NaBFID); !:l All Non-Banking Financial Companies including Housing Finance Companies; (d) All Primary (Urban) Co-operative Banks, State Co_ operative Banks, and District Central Co-operative Banks; (e) All Asset Reconstruction Companies.

6. This circular shall not apply to microfinance loans covered under'Master Di rection - Reserve Bank of India ork for M icro fina nce Loa ns ) ( Reo u latorv Framew Dire ctions. 2022" dated March 74. 2 022. Yours faithfully, (Sunil T. S. Nair) Chief General Manager CLUSI N:-

6. The rssues r ised in this writ etition re no lonqer res inteqra as the Hon'ble Suore me Court in fCICI Bank Ltd . vs. Pra kash Kaur and others reDorted in (2OO 71 2 scc 7tL w ile deal inq with the similar issu s where the e serv a to recover the loan s observed as foll ws: "16. Before we part with this matter, we wish to make it clear that we do not appreciate the procedure adopted by the Bank in removing the vehicle from the possession of the writ petitioner. The practice of hiring recovery agents, who are musclemen, is deprecated and needs [o be discouraged. The Bank should resort to procedure recognised by law to take possession of vehicles in cases .6rrr 1 SN,J W.P.No.l4889 2025 where the borrower maY payment of the instalments strong-arm tactics. " have committed default instead of taking resort

7. Aggressive recovery tactics adopted by the agents of Banks/ Financial Institutions lead to the landmark judgment in ICICI Bank vs. Shanti Devi Sh arma and thers reDo rted in (2008) 7 scc 532 , where the Hon'ble Supreme Court directed the Banks/Financial Institutions to strictly follow the guidelines issued by the Reserve Bank oF India. B. In the above referred judgments, the Hon'ble Supreme Court condemned the procedure adopted by the Banks/Financial Institutions irr employing recovery agents who are acting as middlemen for securing possession of vehicles/ secured assets in cases where the borrower commits default. It was observed that Banks/Fin,ancial Institutions instead of taking recourse to follow the procedure recognized by law for securing the possession oF veh icles/secu red assets in cases where the borrower comnrits default in repayment of loan/loan account is declared as NPA, are resorting to strong-arm tactics. The Hon'ble Supreme Court delineated the guidelines issued by the Reserve Bank of India time and again on the fair conduct by lenders, with reference to usage of services of recovery agents. It also stated t.hat the banks should be reminded of the rule of 8 SN,J W.P.No.l4889 2025 law and strict action must be taken by the RBI in case of breach of such guidelines. 9. This Court opines that the respondent Nos.3 to 1B and their agents should strictly follow the guidelines and instructions issued by the Reserve Bank of India, dated 12.08.2022 (referred to and extracted above) and also the observations in the judgments of the Apex Court in ICICI Ban k Ltd. vs. Prakash Kaur and others and ICICI Bank vs. Shanti Devi Sha rma and others referred to and ( xtracted above) 1O. Takino into consideration: - a) The aforesaid facts and circumstances of the case. b) The submissions made by the learned counsel appearing on behalf of the petitioner and learned Deputy Solicitor General of India appearing on behalf of the respondents and. c) The law laid down by the Apex court in the Judgments (referred to and extracted above) and again enlisted below: i) ICICI Bank Ltd. vs. Prakash Kaur and others reoorted in (2O 07) 2 SCC 7Lt ii) ICICI Bank vs Shanti Devi Sharma and others reoorted in (2OO8) 7 SCC 532 9 SN,J W.P.No.l4889 2025 The Writ Petition is disposed of, directing the respondent Nos.3 to 18 and their recovery agents to strictly follow the Circular guidelines and instructions, dated L2.O8.2O22 issued by the Reserve Bank of India(referred to and extracted above) and also the observations in the judgments of the Apex Court (referred to and extracted above) and not harass the petitioner and his family members with dire consequences by sending recovery agents to the residence of the petitioner and follow due process of law for recovery of amounts due to the respondent Banks and Financial Institutions from the petitioner. However, there shall be no order as to costs. Miscellaneous applications, if any, pending shail stand closed " \\ To, //TRUE COPY// SD/- A.SRINIVASA REDDY ASSISTANT REGISTRAR I 't-' SECTIdr{ OFFICER 'l . The Secretary, Union of lndia, Ministry of Finance, New Delhi 2. The Chief General Manaqer, 6-1-56, Secretariat Road' Saifabad'^^ - - r'iliiidtro"o, Hvoeranao,"neserve Bank of lndia' Telangana-500004

3. One CC to SRI ABDUL AZAM KHAN, Advocate [OPUC] 4. One CC to SRI GADI PRAVEEN KUMAR,. (Deputy solicitor General of lndia)' - iligi b;;,r ior. t 5. Two CD CoPies strt" of Telangana at Hyderabad' [OPUC] " BSK PSK -' a!ar,r*t !,:'-*'-- '-ix I f i I HIGH COURT DATED:0710512025 VACATION COURT /a -' t: L4 .9 -lt at. v * |' // -. : i \\ i ORDER WP.No.14889 of 2025 DISPOSING OF THE WRIT PETITION WITHOUT COSTS : i \t{ \(