High Court · 2025

SBI Cards and Payments Services Limited (SBl Card), Rep. by its General Manager, Unit Nos 3C 3D and 3E, 3rd Floor, Queens Plaza, SP Road Secunderabad, Telangana - 500003 IDFC FIRST Bank Ltd, Building no. 09, 17th floor, Gigaplex Raheja Mindspace lT-5, Airoli, Navi Mumbai - 400708, Maharashtra, lndia INDUSIND Bank Limited, OPUS Center 47, Cenlral Road, Opp. Tunga Paradise Hotel MIDC Andheri (East),Mumbai 400093 . RBL BANK, Unit No. 306-31 1, 3rd Floor, JMD Megapolis, Sector - 48,Sohna Road, Gurugra m - 1 22018, Haryana. Kotak Mahindra Bank, Building No.21, lnfinity Park, General AK Vaidya t\/arg,Malad (E), Mumbai - 400097. Navi Finserv Limited, 2nd Floor, Vaishnavi Tech Square, lballur Village, Begur Hobli, Bengaluru, 560102

10.Bajaj Finance Limited, Represented by its Chief Manager, 6th Floor, Bajaj Finserv Corporate Office, Pune, Maharastra - 5411014 ...RESPONDENTS !c#.q- Petition under Article 226 of the Constitution of ln<ll circumstances stated in the affidavit filed therewith, th€ pleased to issue an appropriate writ, order or direction m I the nature of WRIT OF MANDAMUS declaring the action t , not controlling the agents who harassing the petitioner;l respondents Nos. 3 to 10 (bank authorities and financial i arbitrary, violation of the principles of natural justice and b i well as Rules framed under Reserve Bank of lndia and tr guaranteed under the Constitution of lndia consequenfly c i not to harass the petitioner and his family members on th 3 the monthly installment dues and direct respondent nos. 3 tc dated 12.08.2022 vide RBtl2022-23t 108, DOR.ORG. REC.6 issued by respondent no.2_ r praying that in the High Court may be 'q particularly one in f the respondents in rd his family by the rstitutions) is illegal, tant violation and as : fundamental rights ect the respondents ground of collecting '10 to follow Circular il21 .04.158t2022-23 fA NO: 1 OF 2025 Petition under Section 15i cpc praying that in the ci-r umstances stated in the affidavit filed in support of the writ petition, the High cou t may be pleased to direct the respondents not to take any coercive measures € lainst the petitioner and not to harass him and his family without following dur-, process of law and following circular dated 12.08.2022 vide RBUi'r 22-231 i08,DoR RG.REC.65/21 .o4-15812022-2 issued by RBl, pending rl sposal of the writ petition. Counsel for the Petitioner : SRI M.KESHAV YADAV Counsel for the Respondents No.1 : CENTRAL GOVERNME lT SC Counsel for the Respondents No.2to5 : -- Counsel for the Respondents No.6 : SRI G.PRAVEEN KUMr\ t, SC FOR TNDUS IND BANK LIMITED Counsel for the Respondents No.7to,l0 : The Court made the following: OROER THE HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA qIRIT PETITION No.2436O of 2O2S ORDER: This Writ Petition is filed declaring the action of the respondents in not controlling the agents who are harassing the petitioner and his family by the respondent Nos.3 to 1O (bank authorities and hnancial institutions).

2. Heard Sri M.Keshav Yadav, learned counsel for petitioner and Sri G.Praveen Kumar, learned Standing Counsel for INDUSIND Bank for respondent No.6. 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 W.P.No.52OO of 2024, dated 25.O4.2024 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 for recovery of the loan amounts, shall strictly follow the guidelines and instructions issued by the Reserve Bank of lndia ancl also the judgments of the Hon'ble Supreme Court in ICICI Bank ltd.Vs.Prakash Kaur's case (l supra) and ICICI Bank Vs.Shanti Devi Sharma's case (2 supra) With the above direction, this writ petition is disposed of. 2 r{Bl(J W.P. 0.2436€ ol2025 In terms o[ the order passed by this Court ir W'P'No 5200 4. of 2O24,dated 25.04 2024, and for the reasons ; ike' this writ petition is disposed of in same terms directing the respondents' to ensure that the agents engaged by them for -:covery of the loan amounts, shall strictly follow the gr- idelines and instructions issued by the Reserve Bank of Inclia ald also the judgments of the Honble Supreme Court in ICICI Bank Itd.Vs.Prcrkorsh Kaufs case (1 supra) and I(I'CI Bo,nk Vs' Shantl Deui Sharmcr's case (2 supra)' There sLi ll be no order as to costs Miscellaneousapplications,ifanypendin;'shallstand closed. //TRUE COPY// SI /. L. VIJAYA LAXMI SII TANT REGISTRAR SECTION OFFICER To, \ 1. The Secretary, Ministry of Finance' Union of lnd 2. The Chief General lvlanager' Reserve Bank of ln Delhi -'1 10001 \ l i!,Alevr )elhi dia, 6, S ansad Marg' New

3. One CC to SRI TU KESHAV YADAV' Advocate [OPUC 4. One CC to SRI G PRAVEEN KUMAR' SC for INDUSIN[ Bank Limited' loPUCl

5. Two CD CoPies' (Along with a copy of the Order' daled 25-04-2024 in Vlr r'No 5200 of 2024 to ihis order) BSK ft"(,. w!$!tc--"7- HIGH COURT DATED:0210912025 ORDER WP.No.24360 of 2025 ----i ';R tr s la (--\ i-) 17 ,AN 7t)?E * r),: '.:-l 1 --. a-------" v ,;i li ..-\l ,7 DISPOSING OF THE WRIT PETITION WITHOUT COSTS i,. \6 i: /, THE HON'BLE SRI JUSTICE C. V. BHASI{AR REDDY WRIT PETITION No.520O of 2o24 ORDER: This Writ Petition, under Article 226 of the Constitution of India, is frted by the petitioner, seeking the following relief: '. . -,to issue Writ, Order or Direction more particularlg one in the nafitre of Wit oJ Mand"amus: a) Declanng the action of the respondent Nos.4 to 7 in high hnndedly, arbitraily ind iltegatly trying to reauer the amounts Jrom the petitioner bg not jollowing Ciranlar dated 12.082022 uide RBI/ 2022-23/ 1O8' iop.oric pec ast21.o4.t58/ 2022-23 issued bg the Respondent No'2 or ang due process of laut and the inaction of the Respondent No'2 to legitiiatetg protect ihe interest of the petitioter AlytU enlorcing cra*6, iotia tz.oa.zo22 uide RBI/ 2o22-23/ 108, DoR.oRc.REc.65/ i t.oe.l sA/ zOzz-23 as illegal, arbitrary and unconstitutional for uiolating Article 14, 19 and 21 of the Consntution of India, 195O; b) Direct Respondent Nos.4 to 7 to fotlout Ciranlar dated 12'Oa'2O22 uide int/zozz-zil to8, DIR.zRG.REC 65/ 21.o4.158/ 2022-23 i'ssued bv Respondent No.2, c) Direct the Respondent No.2 to dulg enforce the Ciratlar dated iz.oa.zozz vrde RBl/ 2022'23/ t08, DOR.ORG.REC 65/ 21'O4 158/ ZOZZ ZS to protect the interests of the petitioner against tle Respon'dent No.4; d) Direct the Respondent No 2 to take stingent action against the errant i]traa o1 Respoident Nos.4 to 7 in unlautfutlg, illegallg,-and' arbitraritg tliXing to recouer the c,mour.ts from petitioner without foltouirq ang due process of lana;.. . . " It is the case of petitioner that he availed personal loan

2. from respondent Nos.4 to 7, who are the private bankers and financialinstitutionsandutilisedtheamountsandhehasbeen prompt in repaying the same without fail' It is further case of the petitioner that ever since he obtained loan, he has been 2 CVBR, J Wp_5200_2024 regularly paylng the instalments in terms of the r greement and due to losses in his business, he could not pay .l Le instalments from September, 2023. It is also case of the retitioner that respondent Nos.4 to 7 without following the gu.r elines of RBI, has been sending the loan recovery agents to I .is house and harassing to pay the amounts due as per the calculation of respondents.

3. The grievance of the petitioner is that the r r spondents are entitled to recover loan amount in terms of the [() rn agreements by follorving the procedure established under Iav and they are not having any right to recover the loan amount :,, using force.

4. The issues raised in this writ petition arr no longer res integra as the Hon'ble Supreme Court in ICI1 .lank Ltd.. as. Prc'kash Kaur and. otherst, while dealing ui h the similar issues where the banks ehgaged the services of recovery/ collection agents to recover the loans, observed as lollows: '16. Before we part uith this matter, we uish to mohc it clear that tue do not appreciate the proced.ure adopted. bg t rc Bank in ' 1zoot1 z scc ztt @w7 '-:rtlr:ra , -l CVBR, J Wp_52OO_2024 remouirlg tLrc uehicle from lhe possession of tLe utit petittoner. Tle practice of hiring recouery agents, who are musclemen, is deprecated and needs to be discouraged. Ttrc Bonk should resort to procedure recognised bg latu to take possessio n of uehicles in cases u)here the borrou.ter mag haue committed default in paAment of tLE instalments instead of taking resort to strong-arm tactics."

5. Aggressive recovery tactics adopted by the agents of Barks / Financial Institutions lead to the landmark judgment in ICICI Bc'nk as, Shanti Ded Shartna s.nd. others2, where the Honble Supreme Court directed the Banks/Financial Institutions to strictly follow the guidelines issued by the Reserve Bank of India

6. In the above referred judgments, the Hon'ble Supreme Court condemned the procedure adopted by the Banks/Financial Institutions in employing recovery agents who a-re acting as middlemen for securing possession of vehicles/ 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 law for securing the possession of vehicles/ secured assets in cases '(zooe) z scc ssz 4 CVBR, J Wp_5200_2024 \ where the borrower commits default in repa;,.rn e r t of loan/loan account is declared as NPA, are resorting to strcr g-arm tactics. The Hon'ble Supreme Court delineated the guidt:..nes issued by the Reserve Bank of India time and again on the 1 rir conduct by Ienders, with reference to usage of services of recr very agents. It also stated that the banks should be reminded o -he rule of law and strict action must be taken by the RBI in czr, e of breach of such guidelines. 7 . It is apt and appropriate to extract lat :st guidelines issued by the Reserve Bank of India on 12.O8.2(t'. t2 with regard to outsourcing of Financial Services -Resp, ,nsibilities of regulated entities employing Recovery Agents, ri, rich reads as follows: 'RBr/ 2022-23/ 1O8 DOR. ORG. REC. 65/ 2 1. 04. I 58/ 2O2 2 -2 s August 12, 2022 Madam/ Sir, Outsourcing of Financial Seruices - Respons;i ttilities of regulated entities employing Recooery Agents The Reserue Bank of India has from time to t r '.e aduised regulated entities (REs) that the ultimate responsibtl tA for their outsourced actiuities uests tDith them and theg ue therefore, 5 CV8R, J Wp_s200_2024 responsible for tLe actions of their seruice prouiders including Recouery Agents (hereofter refened to as 'agents')- 2. It has been obseraed that the agents emploAed bg REs haue been deiiating from the ertant instluctions gouerning tLrc outsourcing of financial seruices. In uieuL of concerns arising from tle actiuities of tlese agents, it is aduised that the REs shall strictly ensure that tleg or their agents do not resort to intimidation or harassment of any kind, either uerbal or phgsical, ogain st anA person in tLeir debt collection efforts, including acts intended to lumiliate publicly or intrude upon the piuacg of the debtors' familg members, rekrees and fiends, sendin4 inap>propiate messages either on mobile or through social media, making threatening and/ or anonymous calls, persistentlg 1 calling the borrouter and/ or calling the borrou.ter before 8:OO a.m- and. after 7:OO p.m. for recouery of ouerdue loans, making false and mi,sleading repre sentations, etc. The instructions contained in para 2 aboue shall 3. supplement and be read in conjunction uith the eristing gui.delines/ directions issued bg the Reserue Bank of India, as amended from time to time, including those tabulated in Annex. 4. seriouslg. Applicabtlifu 5. (a) All Commercial Banks (including I'ocal Area Banks, Regional Rural Bc:nk-s, and Small Finonce Banks) excluding Pogments Ang uiolation in this regard by REs tuill be uieu-ted Thi.s circular shall applg to the follouing REs: Ba,nks; (b) All Alt-India Fino,ncial lftstitutions (uiz. Eim Bonk, NABARD, NHB, SIDBI, ant NaBFID); (c) All Non-Banking Financial Companies including Housing Finance Companies; 6 CVBR, J wp_5200_2024 (d) All Primarg (Urban) Co-operatiue Banks, State Banks, and Dstict Central Co-operotiue Banks; and (e) AII Asset Reconstruction Componies. 6. This circular slnll not applg to microfinance lt under 'Master Direction - Rese Frameu-tork for Microfinance Loans) Dire ctions, . 122 March 14 2022. ) L_ )o operatiue ,,ns couered (Reaulatoru Yours faithfully, (Sunil T. S. Nair) Chief General Manager"

8. For the aforesaid reasons arrd as the pro,: :dure adopted by the respondent Nos.4 to 7 for recovery of loar amount from the petitioner, amounts to violation of the rigl-r .s guaranteed under Articles l4 arld 2 1 of the Constitution of In, tia, this Court deems it appropriate to direct the respondents, ,f, ensure that the agents engaged by them for recovery of the l)an amounts, shall strictly follow the guidelines and instructir ns issued by the Reserve Bank of India and also the jud: nents of the Hon'ble Supreme Court in ICICI Ba;nk Ltd. us. pro,kash Kauy's case (1 supra) ar:.d ICICI Bank as. Shanti Deui Sharma's case (2 supra). @4..- 7 CVBR, J Wp_5200_2024

9. With the above direction, this Writ Petition is disposed of. There shall be no order as to costs.

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

25.O4.20.24 C.V. BHASKAR REDDY, J