ICI Bdnk v. Shanti Deui Sharmcr's case

10.HDFC BANK Ltd, Rep by its Chief lt/lanager PN 26, 33/4&3418, Gr Fir, Delta House, sy No 68, Allwyn Cross Road Miyapur, Hyderabad - 500049

11.Aditya Bida Capital Ltd, Rep, by its Chief Manager, M No 711l24l1lRTll0'l to 104, 1st Floor, Roxana Towers, Greenland, Begumpet, Hyderabad - 500016. 12 Bank of Baroda Financral, solutrons Lrmrted, Rep bi, ts Chief lManager, 2nd Floor, Baroda House, Behind Dewan Shopping Ceir -e, jogeshwari" W;sa lvlumbai, tvlH 4001 02 '1 3. North East smali Finance Bank Limited, '1st a;rd 3rcl Floor, Fortune Central Basisthapur. Bye lane 3, Beltola, Guwahati, As6am 7l] 02g. 14 DBS Bank lndia Limited, 6-3- 1 i 09/1/p/G 1/Grounrl Ftoor. Jewel pawan Towers. Sonraliguda, Raj Bhavan Road, Hyderabad - lO00B2 15 Sfi/.FG lnrda credit company ltd. Rep by rts Chief Mar rger, 7, Floor, 703 anc /04. Aditya Trade Center Hyderabad - 50003g. Petition under Article 226 of the Constitution of lr r circumstances stated ln the affrdavrt filed therewith, th€ pleased to issue an appropriate writ, order or direction nr the nature of WRIT OF I/ANDAMUS declaring thes actior not controlling the agents who harassing the petitioner respondents Nos 3 to 15 (bank authorities and frnanoa arbitrary, violation of the principles of natural justice and ir well as Rules framed under Reserve Bank of lndia and t guaranteed under the Constitution of lndia consequenfly c not to harass the petitioner and hrs famrly members on flt the monthly installment dues and direct respondent nos. 3 t dated 12 08.2022 vde RBtt2022-Z3t 108 DOR ORG REC issued by respondent no.2. lA NO:1 OF 2025 ...RESPONDENTS ia praying that in the High Court may be rre particularly one in :f the respondents in nd his family by the rnstitutions) is illegal, rtant violation and as e fundamental rights rect the respondents , ground of collecting > 15 to follow Circular ;5t21 .04 158t2022-23 Petition under Section i 51 cpc praying that in the ;rrcumstances stated in the affidavit filed in support of the petrtion, the High coL 1 may be pleased to direct the respondents not to take any coercive measures rgainst the petitioner and not to harass him and his family without following cl.( process of law and following circular dated 12.08.2022 v ( e RBrt2oz2-23t 108,DoR oRG.REC 65/21.04.158t2022-2 issued by RBt. pe rding disposat of the writ petition. Counsel for the Petitioner: SRI M.KESHAV YADAV Counsel for the Respondent No.1 & 2: SRI p.SHASH|DHAII REDDY, SC FOR CEfuTRAL ( OVT. Counsel for the Respondent No.7: SRI G.PRAVEEN KUMAT , SC FOR SBI Counsel for the Respondent No.14: SRI N.SUDERSHAN The Court made the following: ORDER THE HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITION No.24475 of 2O2S ORDER: This Writ Petition is filed declaring the action of the respondents in not controlling the agents r"'ho are harassing the petitioner and his family by the respondent Nos.3 to 15 (bank authorities and financial institutions).

2. Heard Sri M.Keshav Yadav, learned counsei for petitioner, Sri P. Shashidhar Reddy, learned Central Government Standing Counsel for respondent Nos. l and 2, Sri G.Praveen Kumar, learned Standing Coltnsel for SBI for respondent No'7 ald Sri N.Sudershan, Iearned counsel for respondent No.14. Perused the record.

3. When the matter is taken up for hearing, learned counsel for petitioner submitted that the issue raised in this Writ Petition is squarely covered by the order passed by this Court in I W.P.No.S2OO of 2024, dated 25.04.2024 and therefore, the same order may be passed in this writ petition as well' The operative portion of the said order reads as under: "This Court deems it appropriate to direct the respondents, to ensure that the agents engaged by them 2 w.P. No.24475 of 2O25 N for recor,cn, of rhe loart amounts, shall stricl l .. follort, the guidclrnes and instructions lssued by the Reser r. []ank of India ;rnd also the judgrner-rts of the Hon,blc Sultremc Court ur ICICI Bank ltd.Vs.Prakash Kaur's r:a: r (l supra) and ICICI Rank Vs.Shanti Dcvi Sharma,s cas: (2 supra) Witli t]rc above clirection, lhis writ petition is cti ; r,rscd o[.

4. In terms of the order passed by this Cour L in W.P.No.52OO of 2024, datcd 25.04.2024, and for the reasor.rs alike, this writ petition is disposed of in same terms directin5l t )e fospondents, to ensure that the agents engaged by them lo- fecovery of the loan amounts, shall strictlv lollow th€. instructions issued by the Rcserve Bank of tr-r: judgments ol' the I{on'ble Supreme Court l iuidolines and ia and also the -t ICICI Bo.nk Itd.Vs,Prakash Kaufs case (1 supra) arrci I ]ICI Bdnk Vs. Shanti Deui Sharmcr's case (2 supra). There sl :rl I be no order as to costs. Miscellaneous applications, if any pend r g, shall stand close d. To, sD/'A r- //TRUE COPY/' i,ff,xYifSaTfitfi ,ecndll oFFlcER t"".:::'A:;yl'J,'ilj"'jfJl"R"""..X,?'??X';Y?,l"oi,'llt3".'o Marg' New 'Hll?i*5't'. SIBI]:: ;3,"# :i,'..fi ,;: r,',#,x ill', iryJ Ji' jI "ill;. Delhi -1 10001 l. Iffi . IE,,3lll,oE[1X? r:,'fflsi'j rfl'fft?% . ? I5 &,:i [: ilr{fl il!.. a#ff '' Naoar. CG EmPloYet - ' fi #n:i#'i#"* 6. The Chief Manager' ll t\ilivaour Cross Roads l , t'n'J6i,""iil Manager' SBI cards and Pay*"1'l:: unit Nos 3c eo 'n-o Telangana - 500003 U,i,,,*#*"lu:,^{*t* :":h ::Ht# uEliio"iiJoi o'"6nt Plaza I D Road secunderaoao' - ,,{l Complex Bandra (E), tr,4umbai, Maharashtra, 400051 8 The Chief Manager, Kotak tr4ahindra Bank, KC, C 27, G Block, Bandra Kurla 9 The bhief lvlanagi:r, lClCl Bank, lClCl Bank Towers, Financial Dist. Plot No. 10 The Chief tr/aiager, HDFC BANK Ltd, PN 26, 33/4&34/8, Gr Fir, Delta 1 'l . The Chiei Manager, Aaitya Birla Capital Ltd, M No 711l24l1lRTll01 to 104, '1st House, sy No 68, Allwyn Cross Road Miyapur, Hyderabad - 500049 .'12. Nanakramguda, Gachrbowli Hyderabad. Telangana 500032 Floor, Roxana Towers, Greenland, Begumpet, Hyderabad - 500016.

12. The Chief Manager, Bank of Baroda Financial solutions Limited, 2nd Floor, Baroda House, Behind Dewan Shopping Centre, Jogeshwari - West, Mumbai, tvH 400102 .13.North East Small Ftnance Bank Limited, 1st and 3rd Floor, Fortune Central' '14.DBS Bdnk lnhia Limited, 6-3-110911lPlc1lGround Floor, Jewel Pawani .15,The Chief Nlariager, SMFG lndia Credit Company Ltd, 7, Floor, 703 and704, Towers, Somajiguda, Raj Bhavan Road, Hyderabad - 500082 Basisthapur, Bye lane 3, Beltola. Guwahati, Assam 781028- Aditya Trade Center, Hyderabad - 500038.

16. One CC to SRI tr/.KESHAV YADAV, Advocate [OPUC j 17.One CC to SRI N SUDERSHAN, Advocate IOPUC] 18. One CC to SRI P.SHASHIDHAR REDDY, sC FOR CENTRAL GOW. [OPUC] '19. One CC to SRI G PRAVEEN KUMAR, SC FOR SBI [OPUC] 20 Two CD Copies (Along with the copy of order dated 25.04.2024, in W.P.No.52OO oI 20241 BSR BS. HIGH COURT DATED: 0210912025 { { ORDER WP.No.24475 ot 2025 l:- DISPOSING OF THE WRIT PETITION, WITHOUT COSTS 1 THE HON'BLE SRI JUSTICE C. V. BHASKAR REDDY WRIT PETITION No.S2OO of 2024 ORDER: Tl-ris Writ Pctition, under Artir:lc 226 of the Constitution of Indizr, is filcd by the pctitioner, seekins the follou,ing relief " . .lo r-s.sue Writ, Ordcr or Direction morc' particularlg one tn the nature of Wit oJ Mandarnus: tL) Decloring thc e<-liotl of lhe responder?t Ios.7 ro 7 in hiqh ltandedlg, arbitrrtril4 ancl illeqctuy trtJinq to re:tnr.'ar tlu: rttnorLnls frorrt the pelili)trcr by not lollouittcl Circulor clcLtecl 12.03.2O2) t,rcle RBI/2022 23/ 108, DOR.ORG.RL,C 65/21 04 l5B,/ 2022 2iJ is.>^rrr:c/ bU the Respondent No.2 or anq clue procc-ss ry' leLLt arrcl tLte inection of tlrc Respondent No.2 to legitimedelg protact tlrc irLterest at' tlrc petioner bg dulg enJorchg C:ircuktr c.l.ttcd 12.O3.2022 uide Rtslt'2r)22 23/ 108, DOR.OIIC.RDC.65/ 2 1 .04. 158/ 2022 23 as i[LeqoL, arbirrarq erL.l urrcotastitutiortol for uiolatincl Arlicle 14, 19 ond 21 of lhe ConstitLttion of htclrcr, 195O; b) Dire,ct Rcsponclcnt Nos.,l to 7 to follotu Circ-ulor dated 12.08.2O22 uiLe RBI/2022 23/ 108. DOR.ORC.REC.65/ 21.O1 158/ 2022 23 i.ssued Dq Respondcnt No.2, c) Direcl the Rcsporrcletlt No.2 to clttLy enforct, the Circular dated 12 08 2O22 uidc RI]1/2022 23/ 108. DOR ORG.REC.65/ 21.04.158/ 2022 23 to protacl the interests oJ the petitio|r egainst the Respondent d) Direct the Rcspondent No.2 to tokc strinqent acliota agatnst the errQnt olJicial of Respondent Nos 4 to 7 in unlctwftLlltl illegalltl and arbitrarilg taking to recouer lhe emounts Jrom petitioner u'ithout follouing any cluc- process of latu,.... "

2. It is the case of petitioner tl-rat he availed personal loan from respondent Nos.4 to 7, who are the private bankers and financial institutions and utilised the amounts and he has been prompt in repaying the same without fail. It is further case of the petitioner that ever since he obtained loan, he has been 2 CVB R, J Wp 5200 2024 reglllarlv p:r,\'ut:l thc instalmcnts in terms of th< tgrr:ernent and dr-rc to krsscs rrr hi:.; brrsincss. l-re could not pa\. 1te instalnrcrrts from Se1;lenrtrcr-, 2023. It is aiso case of the [)etitior]cr. thal resportrlcnt Nos..1 1o 7 r,vithout following the gr-. i leliles ol' Illil, has ber:n scrrrlirrg tl'rc loan recovery agents to tis housc and harassing to I)a-ll, the amounts due as per th,: calculatiot-r of rcspondcn t s

3. 'l'ltr: gncvitrrc:c of the petitioner is that the r , spondcrrls arc ctrtitk'cl to l ('r'o', r:r io.ut amount ir-r terms of the It tn irqrctclllcl)ts by follon,ing Ilrir ltrot:cdure established under 1.r1 . ancl thc\. arc not I-irrving lrrtr r-ighl to recover the loan amour)t L r, using lorr:t:

4. 'l'hc issrrcs reriscd in this '"vrit petition :1rit no longer res ittl<:gra as thc Horr'blc Supreme Court in ICICI io,nk Ltd. us, Prakash Kaur and othersr, while dealir-rg ui h the similar isslres wherc the barrks engaged the services of recoverv/ collection agcnts to recover the 1oans, observed as tolloivs: " l6. IlaJbra Ltte part LU[th this matter, u)e u..tish to mak: it cl':ar that tott clo tlol ttltpr t:ciatc the procedure adopted bg t tt: Elrutk t '1zooz1 z scc zrr 3 CVBR,.J Wp_5200_2024 remouing the uehicle from the posses.sion of the uit pet[tioner. The practice of hinng recoucrA agents, utlto ore: ntusclemen, is deprecated and needs to be cl[scourrtged. 7'he: I3ank. should resoft to procedure recogniserl bg lcttu to take pos^-sr'.s-slo n of tehicles in cases where tlrc borrotuer maq httue conrn[tted default in paurnent of the nstalmenf.s in-slea.l of takirLg resort to slrong arm tactics."

5. Aggressive recovery tactics adoptcd by the agents of Banl<s/ Financial Institutions le ad to tl-re landmarl< judgment in ICICI Bo,nk as. Sholr-ti Deui Sharrna. and others2, where the Hon'ble Supreme Court drrected the Banks/Financial Institutions to strictly follow the guideiines issued by the Rcserwc Bank of India

6. In the above referred judgnrents, the Hon'ble Supreme Court condemned the procedure adopted by Banks/Financial Institutions in enlploying recovery agents who are acting as middlemen for securing possession of vehtcles/ secured assets in cases where the borrower commits default. It was observed that Banks/ Financial Institutions instead of taking recourse to follow the procedure recognized by 1aw for securing the possession of vehicles / secured assets in cases ' 1zooa1 z scc s:z .: ". .H 4 CVBR,.] Wp_5200 2024 where thc borrorve r commits delault in repaynr,: rt of loan/loan accotlnt rs declarcd as NPA, are resorting to str, I tg arm tactics. Thc Hon'blc Supreme Court delineate d the guid: ines issuerl by the l?eserve Llarrk of Ir-rdia time and again on thc hir conduct by lcnders, rt,ith rclbrencc to usage of services of rer: rverlz agents. It also stated that the banks should be reminded r 1 the rule of law and strict actron must be tahen by the RBI ir-r c r;e of breach of such guideiincs.

7. It is :rpt anrl appropriatc to extract Li r:st guideltnes issued by the Resen e Bank of India on 12.08.'.2) 22 rvith regard to outsourcrng ol Financial Selices -Res: rnsibilities of regulatecl entitres cmploying Rccovery Agents, u hich reads as follou's "RBI/ 2022 )3/ 108 DOR. ORG.RT(,'. 6 5 / 2 1.04. I 58i 2022 2s August 12, 2022 \ladoml Str. Outsourcing of Financial Seruices - Respon s bilities of regulated entities emploging Recooery Agents The Reserue Bank of India has from time to ; i te acluised. regulated entities (REs) thot the ultimate responsi.L,i tg for their ctutsourcecL act[ui.ties r.,r:st.s u.,ifh them and theg a",, therefore, 5 CVBR,.J Wp 5200_2024 responsible for the actions of their serutce prouiders u'tclutling Recouerq Aqertts (hereafter reJerrecl to as 'age nts'). 2. It has been oltserued tlnt the aqents emploAed bg Rlls lnue b<:<,rr rleuiattn-c1 from the extanl insfruclion-s gour:rninq tl'Le outsotrrcinq of financial seruices. In utctu oJ concerns ansing from the. actluities of these agenls, it [s ac]uised thot the REs .s/rall stnctllJ ensure that thelJ or thcir agerts do not resort to ttttmidatton or harassment of any kind, etther uerbal ctr phgsical, oqainsl anu person in thetr debt collection efforls, inclucl.inq acts irttendecL to humil[ate publicly or tltnlcle upon the prittctt:y o.f tltc., clebtors farnily members, feferees ctncl Jnertds, seruTitq inappropriate me.s.sages either on mobtle or through social mec[ia, making threateruing and/ or anonAmous calls, perststerLtly 1 callinq Llrr: borrottter and/ or calling the borrou,tar btfure 8:00 a.rru. und after 7:0O p m. for recouerA of ouerdue loans, makirLq J'alse and nis I e ading rep re s e nt atio ns, etc. 3. The instntctions contalned in para 2 aboue shall supplcnrettt ond be read in conjunction with. thc crisring gtLklr:line.s/ dtreclions issued bg the Reserue Bank of India, as amencled from time to time, irucluding those tabulated irt Annex. 1. seriously. Applicabilitg 5- (a) All Commercial Banks (including Local Area Banks, Regional Rurnl Banks, ctnd Small Finance Banks) excluding Pagments Banks; (b) AU AU India Financiat Institutions (uiz.. Exim Bank, NABARD, NtIB, SIDBI, and NaBFID); (c) All Non Banking Financiol Companies including Housing Finance Comparties; AnA uiolation in this reqard bU REs wt[[ be uietued ?'his circular shall ctpply to tl'Le follotuinq REs: 6 CVBR, ] wp1_5 200_2024 {rlt Ail Prinorq llJrbun) Co o1:eratiue llanks, Staie i'o cpcratiue ll.ttl r)u.l L)tstttt I (', t,trnl C, op, 1.01iL)7 Banks: a,t , /r'l r1 1l A.s.sct llcco,l.sl,lrctior Corrtpante s. 6. '[hts <:irculat shall not apply to nicro]lnanca ,c. trts c:ouered. ttrttl<:r'Ma;le:r Dtrcction e ulaktrt f'romc tL.tor).. lor iv[tcro finance [,oan.s) Directions, z )22 lltarch I I ?022. Rcsarue Bank of Incl.i t clcLter:1. Yours faithlitllg, [SIrnil 7'. S. rVairl Chie.l' Gcn.t:ral l,k-t nctqr: t B. For thc alorcsaid reasons and as the proc:dure adopted by thc respolrdcnt Nos.4 to 7 for recovery of loa r, amollnt from the petitioner, anlounts to violation of the rigl ts euaranteed under Articlcs I 4 zrnd 21 of the Constitution of l - lia. this Court deenrs iL appropriate to direct the rcspondents. ,o ensure that the agents ellgaged bv them for recovery of the oan amounts, sha11 strictly lollow the guidelines and instruc _ rns lssued by the Reserve l3ar-rk of lndra and also the juc l,ments of the Hon'ble Supreme Court in ICICI Bank Ltd us. Pra,kosh I{aur's case (1 supra) and ICICI Bank as. Shanti Deui Sharma's case (2 supra) 1 CVBR, ] Wp_5200_2024 g. With thc above direction, this Writ Petition is disposed ol There shali be no orcler as to costs

10. As a sequel thereto, miscellaneous petitions, if any, pending shall stand closed

25.O4.2024 C.V. BHASKAR REDDY, J