The High Court · 2025

petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be I pleased to issue an appropriate Writ, Order, or Direction, more particularly in the nature of Writ of Mandamus, declaring the action of respondent Nos. 3 to g in attempting to rec;over amounts from the petitioner in an arbitrary, illegal, and high- handed manner without following the due process of law and in blatant violation of ihe Reserve Bank of lndia Circular dated 12.08.2022 bearing No. RBI/2022-23148, DOR.ORG.REC 65/21.04.158t2022-23, and further declaring the inaction of respondent No. 2 in enforcing the said Circular as unconstitutional and violative of Articles 14, 19, and 21 of the Constitution of lndia, and consequently direct the respondent authorities to refrain from undertaking any coercive or unlawful recovery measures against the petitioner and to strictly comply with the due process of law and the aforesaid Circular in all recovery proceedings, and further restrain respondent Nos. 3 to 9, their agents, recovery agents, executives, managerc, of €rfl! person acting on their behalf from engaging in any acls of intimidation, harassment, humiliation, or intrusion into the privacy of the petitioner or his family mernbers, referees or friends, including persistent or anonymous calls, threatening messages, or physical visits to the petitioners premises, and further direct respondent No. 2 to enforce the said RBt Circular in letter and spirit and to initiate appropriate and stringent action against the errant officials of respondent Nor;. 3 to g for violating legal noFms, and pending disposal of the writ petition, direct l:he respondent Nos. 3 to 9 not to resort to any coercive measures against the petitioner except through lawful means and in strict adherence to the Circular dated'12.08.2022 Counsel for thre Petitioner : SRI THAKUR MANASWINI SINGH, REP. FOR SRI. BONTHU LOKESH PHANINDRA REDDY Gounsel for the Respondent No.l: ANGOTHU NEHRU (SC FOR CENTRAL CIOVT) Counsel for the Respondent Nos. 2 to 9 : ---- The Court made the fotlowing: ORDER THE IION'BLE SRI JUSTICE NAGESH BHEEMAPAI{A .i ORDER: ' This Writ Petition is filedtoissueanappropriateWrit'Order'or Direction,moreparticularlyinthenatureofWntofMarrdalnus i) declaring the acrion of respond.ent Nos' 3 to 9 in attemPtins,:t amountsfromt}repetitionerinanarbitrary,illegal,andhigh-handed :":"lt: ' malrnerwithoutfollowingthedueprocessoflawandinblatantviolationof theReserveBarrkofIndiaCircu1ardated|2.o8.2o22beailgNo'RBIl2 REc.6sl 2r.o4.rs,t2o22-23, ii) decraring the inactioh ot ;;;;:;;; respondentNo.2inenforcingthesaidCircularasunconstitutiondarrd violative of Articles 14, 19, and 2| ofthe Constitution of India, iii) direct the respondentauthoritiestorefrainfromundertakinganycoerciveorunlawful recovery measures against the petitioner and to strictly comply with the due ProcessoflawandtheaforesaidCircularinallrecoveryproceedings, iv}furtherrestrainrespondentNos.3tog,theiragents,recoveryagrnts, executives? manag€rs, or any person acting on their behalf from enel1r$1n any acts of intimidation, harassment, humiliation, or intrusion into the privacyofthepetitionerorhisfamilymernbers,refereesorfriends, including persistent or anonymous calls' threatening messages: or physical ;*. a1n" petitioners prernises, v) direcr respondent No. 2 to enforce the said RBI circular in letter and spirit and to initiate appropriate ad stringent action against the errant officiats of respondent Nos' 3 to 9 for --. 2 ' violating legal norms' aad ne$ing disposal of the v.,rit petition and vi) direct respondcnt I'tc's' 3 to g not to rescrt to any coercive measures petitioner cxcr:pt through lawftrl means and ," ;: Circular dated 12.Og.2O22. "*"r;;,;. ";"ce ro the B' Lokesh phanindra, 2' Heard vts' Thakur Manaswini singh, learned counser representing sri learned counser for petitioner and s.i e.rgothu Nehru, learned stancli,g counsel for central Governrnent, for the responclent- Central Goveminent.

3. Despite senice of notice, none appeared for remaining respondents. 4' when ttre matter is taken up for hearing, rearned counser for petitione. suL'mitteci urat the issue raised in this writ petition is squarely covered by the order passed by this court in w.p.No.5200 0f 2A24,dated 25.04.2024 and therefor"),fr" same order may be passed in this writ petition as welr. The operative portion of the said order reads as under: "9. For the aforesaid reasons and-as the procedure adopted by the r""rirra"rrt r,r""-+ ,Ji for recovery of loan arnount from the p"iitiorr"r, amounts to vioration or ilre .i*rr," g,aranteed under Articres'r4 ;;;i"or ,n. consritutioi or rndia, this Court i.:T:, to ctirect the .*;*.#.t, :::#J$"T'ff;illie that the d;;;J;"gaged by them ror ,Ttyd":;;;"ffi :#::+,i;r"lfl ,*:T,il**;T *,H:"**3 E t$H";**:;r. .;;;;#*ct ., ', rcrcr T:* vs. snanti Dd sh;;;t;"?i; J,1o::,1*, e with the-.[.,:'r said dir;";;,-ir,. *.it petition is ,',0 3 disposed of."

5. Learned Standing Counsel fOr Central Government has no objection.

6. Accordingly, in terms of the order passed by tJlis Court in W.P.No.S2OO of 2024, dated 25.04.2024, and for the reasons alike, this writ petition is disposed of directing the respondent authorities and their agents to scrupulously follow the guidelines/instructions issued by t follow the ouidelines/instructions issued bv tlre Reserve Bank of India in its Circular dated 12.08.2022 and, also the judgments of l Honble Supreme Court in ICICI Bank Ltd. Vs. Prakashl Kaur's case and , ICICI Bank z\Is. Shanti Devi Sharma's case. Pending miscellaneous applications, if any, shall ptand closed. To, I //TRUE COPYII SD/- A. JAYASREE ASSISTANT REGISTRAR 6 SECTION OFFICER

1. The Secretary,Union of lndia, Ministry of Finance, New Delhi z. gnipf,General Manager, Reserve Bank of rndia (RBt), 6, sansad Marg, New Delhi- 1&O1

3. 9!i"t MaTqger, AXIS BANK, .Ground- Floor, Sriven Matt, Miyapur Rd, J p corony, Mayuri Nagar, Miyapui, 'nyoeiioLo, Nagar, cc_ ^Eryplbyees

4. Shief Wry.g"I,- H-PFC B_ANK Limited, pN 26, 33/48634/8, Gr Ftr, Delta House, sy No 68, Allwyn cross Road Miyapur, Hyderabad - s0b04g

5. Ql,ief Manager,.ryB.r- e-anr1 Limited, sho_p_ no 5-4110 and s-4111 Ground floor, Chanda Nagar, Hyderabad, Telangana 500050

6. Qhjef (q!:r"g=r, sBl gards gnq pjyllents services_Limited (sBt card)., DLF, 9Vb". City,..pw91 C, ^Block 2, Btiilding 3 DLF tnfinity To\i,ers, t2tfr'Ffoor, Gurugram, HR - 122W2

7. glrSr.Yr:',rqg.r, D{l Finane private L.imited, Express Buitding,Third Floor,lg- 10,Bahadur Shah htar Marg, New Delhi - 1 1'0OOl .'.e' - '"'-

8. chief Manager,^4ye- Finance private limited, M-S,MAGNUM HousE- trggMuuNft berffine,"xAnnrrapuRA NEw-belHr west Dethi DL tN 1 10015. ffi€,ffiffi,,iii:i'i;. :#.;i','' c"vLl ^' I

9. Chief Marnager, The south ln{lan Bank Liqite!.-H.NO-1-55/3/2, PLOT NO- iil-sV ltia]. dzs MADINAGUDA VILLAGE,_ SERILINGAPALLY, MANDAL, ftiberaUad, Madeenaguda, Telangana 500049

10.One CC; to loPUCl 11.One CC; to loPUCl SRl. BONTHU LOKESH PHANINDRA REDDY, Advocate ANGOTHU NEHRU (SC FOR CENTRAL GOVT) Advocate

12.Two CD CoPies (Along ra'ith the CoPY of Court Order dli25l}4l2o24 in W.P.No. 5200 of 20241 \ PVL GJP ftr4. ,:-r -.' .) I t ,,| t HIGH COI.'RT DATED:16/09/2025 \ \ ORDER WP.No.2li804 of 2025 .:' '. i.. t" ? - \' r l{ C: O z 2 JAt'l 2026 {r * I / t DISPOSING OF THE WRIT PETITION WITHOUT COSTS f,'ta 'rn t+\t"{ THE HON'BLT SNr.rtrSrrcE C. V. BIIASI{AR REDDY ORDER: This Writ Petiti,,on, .under Article 226 of the Constitution of India, is filed by the "-...to issae wrtt, order or'Directi<tn tnare partianlarlg one in the nature of WritofMandatnfi :i"l . a) Dectaring tle action of tte resytondent JYos.4 to z in high tund.edty, arbitrailg ard. illegallg Wng to reauer the amounts from tte petitionZr bg rwt follouting Ctrqior dated 12.08.2022 uide RBI/2O22-23/IO*, obn.oic.nec.ds/zl.o+.1s8/ 2022-2s issed. bg tte Reqnndent No.2 or ang due procr;ss of laut and. the inaction of the Reqnndent No.2 to tegittmatetg protect W inlerest of the petitioner bg dutg enforcing Ciranlar d.ated 12.08,2022 ilae ngf/ZOZZ-ZS/ tO8, D-OR.opG.nbC.OS7 2 1 . 04 - 1 5 8 / 2 O 2 2-2 3 as itlegal arbitrary a nd. un crlnstifr.ttiona/ for uiotating Article 74, 79 and.21 of tttc,@nstitr,ttion of lndia, 19SO; b) Direct Respndent Nos.4 to 7 tofollout circular dnted 12.o8.2o22 uide RBY2O22-23/ 1O8, DOR.ORG.Rrc.65/ 21.04.158/ 2022-23 issued. bg Respondent No.2, c) Direct the Respondent No.2 to dulg enfore tle circalar dated" 12.08.2022 uide RBl/2022-23/1O8, DOR.ORG.REC.6S/ 21.o4.tSB/ 2022-23 to protect tle intercsts of the petitioner agailst the Respondent No.4; d) Direct thc Respond.ent No.2 tb talee strhtgent actton against the errant olficial of Respon&nt Nos.4 tp 7 in unlautfullg, illegaltg and arbitrarilg taking to reouer the amounl,s from petitioi., **noit y1ttowing ang di process of laut;....'

2. It is the case of petitioner that he availed personal loan :jt . 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 ev€r since he obtained loan, he has been 2 cvBR, J Wp-5200-2024 regularly paytng the instalments in terms of the agleernent and due to lossies in his business, he could not paY tJ:e rnslatryents ,.,:,,., ,fromSeptr:mber,2o23.ItisalsocaSeof,thepetitionir]that respondent Nos. 4 to7 without following th" s,rialmr." oi *r, has been sending the loan recovery agents to his house, and .] ,: ,, harassing to pay the amounts due as per the calculation of respondents.

3. The grievance of the petitioner is that the respondents are entitled to recover loan amount in terms of the loan agreements by followirrg the procedure established under law qnd they q.re not having any right to reeover the loan amount b5r using force.

4. The issues raised in this writ petition are no longer res integra as the Honble Supreme Court tn ICICI Bank Ltd,. urs. Praka.sh Kaur and otherst, while dealing with the similar issues wh.ere the banks engaged the services of recOVery/ collection;rgents to recover the loans, observed as follows: '76. Before we part with this matter, ute utishto malee it clear that we do not oppreciate the procedure adoptcd bg the Bank in '1zwty 2 scc 7:t1 3 CVBR, J Wp_S20O_2024 remouing th.e uehictc from thepossessron of the u.trit petitioncr. The practice of hiring re@uery agenls, ,utho are ttruscLemen, is d.eprecated. and. need.s to be disaurwed Lt* Bank slwuld. resort to procedure recognised.bg taut to take possession o/ uehidles in cases uthere ttg bonouer. maU lurrc ;ammittcd defautt in payment of the instalments insteitd. of tafirq resort to strong-arm tactics.D I .. I

5. Aggressive recovery tactics adopted by the agents of Banks/ Financial Institutions lead to the landmark judgment in ICICI Bank us. Shanti fual Sturrna. and others2, where the Honble Supreme Court directed the Banks/Financial Institutions to strictly follow the guidelines issued by the Reserve Bank of India. In the above referred judgments, the Hon'lcle supreme 6. court condemned. the procedure adopted by the Banks/Financial Instihrtions in employing recovery agents who are acting as middlemen for seqr+ring possession of vehicles/ secured. assets in cases where the borrower Commits default. It was observed. that Banks/Financial Instihrtions instead of taking recourse to follow the procedure recognized by law for securing the possession of vehicles/secured assets in cases '(zooa) 7 scc 532 4 CVBR, J Wp_s200_2024 where the borrower commits default in repa5rment of loan/loan account i:r declared as NPA, are resorting to strong-arm tactics. The Hontrle Supreme Court delineated the guidelines issued by the Resenre Bank of India time and again on the fair conduct by lenders, rx"ith reference to usage of seryices of recovery agents. It also state,l that the banks should be reminded of the rule of law and strict action must be taken by the RBI in case of breach of such guidelines.

7. It is apt and appropriate to extract latest guidelines issued by the Reserve Bank of India on L2.O8.2O22 with regard to outsourcing of Financial Services -Responsibilities of regulated entities employing Recovery Agents, which reads as follows: 'RBy.2O22-2s/ 1O8 : DOR.ORG.REC. 6 5/ 2 1. 04. I s8/ 2022-23 Augus:t 12, 2022 Madain/ Sir, Outsowrcing ol Dlaancial Seruices - ResponslDdlities oj' regul'ated. entities etnpbgn^g Recotnry Agents Ile )?eserue Bank of India has from time to time ddrrised. regukted entities (REs) that the ultimate responsibilitg for tleir outsoured actiuities uests with tlem ond theg are, therefore, 5 CVBR, J Wp_520o_2024 responsibte for the actiotts of tlteir seruie prcuiders brcludirE Recouery Agents (hereafier referredto as lagents). 2. It lrrs been obserued that the ogents emploged bg REs haue been deuiating from tle ertan:t inst:Lcti:lons goventiltg the outsourcing of financial seruies. In u4ut of a nrerns aris@ from the activities of tlese agents, it is addsed tlat the REs shall strictty ensure that tteg or their agents do nat resort ta intimi.dation or horassm.ent of ang kind, ettlVr uerbal or phgsical, against ang person in th.eir debt ollection efforts, including acts intended. to humittate publicly or intrude won the priuacg of the debtnrs' famity m.embers, refere,es and. fiend"s, sending inappropriate messages eitlrcr on mobile or through social mdia, makirq threatening and/or anwn7mous calls, persistentlyl calting tlw borrower and/or catling tlrc bonower before 8:oo a.m- and. afier 7:OO p.m. for recouery of ouerdue loans, making falx and miste ading rep re se ntatiorts, etc. The instructions antained in para 2 aboue slmll 3. supplement and" be read. in criniurtction uith the existirtg guidelines/directions fssued bg tle Reserue Bar* of lrtdia, as amended. from time to time, irrctudhql tho* tabutafcd in Annex. 4- seriously. Applicabilitg 5. (a) All Commercial Banks (irrcludittg Leal Areq Banlcs, Regional Rttrat Banks, and Small Finane Banks) excluding Paym.ents Banks; (b) AU All-India Financial Institntiotts (uiz. Exim Bank" NABARD, NHB, SIDBI, and NaBFID); (c) Alt Non-Banking Financiat compani.es ilrcluding Housing AnA uiolation in this regard bg REs utill be uieuted' This ciranlar shall aPPIA to thefollouting REs: 5 CVBR, J wp_s200_2024 (Q Alt Primary (Urban) Co-operatiue Banlcs, State Co-opemtive Banlcs, and. District @ntral Co-operatiue Banks; and. (e) All Asset Recr nstrudion Companies. 6. Thi;. ciranlar slull ttot appls to microfinance loans avered March 14.2O22. Yours.faithfully, (Srenil T. S. Natr) Chief .lkneral Manager"

8. For the aforesaid reasons and as the procedure adopted by the resrpondent Nos.4 to 7 for recovery of loan amount ftom the petitirner, amounts to violation of the rights guaranteed under Articles 14 and 21 of the Constitution of India, this Court deems it appropriate to direct the respondents, to ensure that the agents engaged by them for recovery of the loan amounts, shall stri:fly follow the guidelines and instructions issued by the Rese:rve Bank of India and also the judgments of the Honble llupreme Court in ICICI Bank Ltd. its. prutlcrrsh Kaut's case (1 supra) and ICICI Bo;nk as. Sllr;ntt Deai Sharma's case (2 supr{. 7 CV8R, J Wp_52o0_2O24 g. 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,' rif 4ny, pending shall stand closed.

25.o,4.2o.24 c.v. BHASI(AR REDDY, J