Telangana High Court

Makkala Ashok Kumar vs The Union Of India on 23 April, 2025

 THE HON'BLE SRI JUSTICE N.V. SHRAVAN KUMAR

            WRIT PETITION No.36262 of 2024
ORDER:

Heard Ms.Mukkera Sahithi Sri Kavya, learned

counsel for the petitioner, learned Central Government

Counsel for respondent No.1, Sri K. Rathangapani Reddy,

learned counsel appearing for respondent No.2,

Sri Mahesh Kosgi, learned counsel appearing for

respondent No.6 and Sri A.V.L. Ram Prasad Varma,

learned counsel appearing for respondent Nos.7 to 9.

None appeared for respondent Nos.3 to 5. Perused the

record.

2. This writ petition is filed seeking following prayer:-

"Writ of mandamus declaring the action of the Respondent Nos.3 to 9 in high handedly, arbitrarily and illegally trying to recover the amounts from the petitioner by not following Circular dated 12/08/2022 vide RBI/202223/ 108 DOR ORG REC 65/21 04 158/202223 issued by Respondent No.2 or any due process of law and the inaction of the Respondent No.2 to NVSK,J

legitimately protect the interest of the petitioner by duly enforcing Circular dated 12.08.2022 vide RBI/202223/108 OR ORG REC 65/21 04 158/ 202223 as illegal, arbitrary and unconstitutional for violating Art 14, 19 and 21 of the Constitution of India and consequently direct the Respondent No.2 to duly enforce the Circular dated 12/08/2022 vide RBI/202223/108 DOR ORG REC 65 /21 04 158/20222 to protect the interests of the petitioner against the Respondent Nos.3 to 9 and direct the Respondent No.2 to take stringent action against the errant official of the Respondent Nos.3 to 9 in unlawfully, illegally and arbitrarily taking to recover the amounts from petitioner without following any due process of law."

3. The brief facts of the case are that the petitioner has

availed the loans and credit card facilities offered by

respondent Nos.3 to 9 - Banks, utilized the amounts and

have been prompt in repaying the same without fail. It is

submitted that petitioner has paid the regular

installments to respondent Nos.3 to 9 - Banks till

October-November, 2024 and thereafter the petitioner

could not pay the regular installments due to financial NVSK,J

losses and loss of job. It is further submitted that

petitioner has requested respondent Nos.3 to 9 - Banks to

grant some time to repay the loan and pending bill

amounts but respondent Nos.3 to 9 - Banks without

following the guidelines issued by Reserve Bank of India

has been continuously calling the petitioner 70-80 times

per day and also harassing the petitioner by sending loan

recovery agents to repay the amounts immediately.

Aggrieved by the said action of respondents - Banks,

petitioner filed the present Writ Petition.

4. Learned counsel appearing for the petitioner submits

that there is no dispute with regard to the loan amounts,

which the petitioner has to pay and in view of financial

exigency and loss of job, the petitioner could not repay

the said amounts. Learned counsel further submitted that

the petitioner is searching for a new job and till such time

certain time may be granted to the petitioner to work out

with the respondent-banks for reaching the settlement to

pay the amounts in instalments and pray this Court to NVSK,J

direct the respondents not to take any coercive / adverse

steps till then and to strictly follow the guidelines issued

by the RBI.

5. Learned counsel further submitted that in similar

circumstance this Court disposed of W.P.No.18913 of

2024 on 22.08.2024 and has passed the order protecting

the petitioners therein and directing the respondents

therein to follow the circulars issued by the RBI. Relevant

portion of the said order is extracted below:

"8. It is apt and appropriate to extract latest guidelines issued by the Reserve Bank of India on 12.08.2022 with regard to outsourcing of Financial Services -Responsibilities of regulated entities employing Recovery Agents, which reads as follows:

"RBI/2022-23/108 DOR.ORG.REC.65/21.04.158/2022-23 August 12, 2022

Madam/ Sir, 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 NVSK,J

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 do 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, persistently1 calling the borrower and/or calling the borrower before 8:00 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 supplement 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 Annex.

4. Any violation in this regard by REs will be viewed seriously.

Applicability

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 Institutions (viz. Exim Bank, NABARD, NHB, SIDBI, and NaBFID);

c) All Non-Banking Financial Companies including Housing Finance Companies;

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d) All Primary (Urban) Co-operative Banks, State Co-operative Banks, and District Central Co- operative Banks; and

e) All Asset Reconstruction Companies.

6. This circular shall not apply to microfinance loans covered under 'Master Direction - Reserve Bank of India (Regulatory Framework for Microfinance Loans) Directions, 2022', dated March 14, 2022. Yours faithfully, (Sunil T. S. Nair) Chief General Manager"

9. In view of the above circulars, 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 India and also the judgments of the Hon'ble Supreme Court in ICICI Bank Ltd. vs. Prakash Kaur's case and ICICI Bank vs. Shanti Devi Sharma's case."

6. Learned counsel for the petitioners further pray this

Court to pass similar orders as passed in W.P.No.13909

of 2011 on 27.02.2025.

7. Learned counsel appearing for respondents did not

dispute the same.

8. Recording the submission made by learned counsel

appearing on either side and in terms of order passed by

this Court in W.P.No.18913 of 2024 on 22.08.2024, this NVSK,J

writ petition is disposed of directing the respondent Nos.3

to 9 - Banks 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