IMPORTANT POINT
Credit information companies must ensure timely rectification of credit ratings to protect borrowers' fundamental rights to dignity and reputation.

JUDGMENT :

(A.K. Jayasankaran Nambiar, J.) :

The 3rd respondent in W.P.(C).Nos.42469 of 2023, 863 of 2024 and 2623 of 2024 is the appellant before us aggrieved by the common judgment dated 23.02.2024 of a learned Single Judge in the writ petitions.

2. The writ petitions were filed by a person, who had availed loans from three credit institutions, and he was essentially aggrieved by the inaction on the part of the appellant herein to rectify his credit rating notwithstanding that he had settled the loan accounts with the credit institutions honourably. The stand of the appellant before the writ court was that the delay in rectification of the writ petitioner's credit rating was on account of non-receipt of comments from the respective credit institutions on the writ petitioner's request.

3. The learned Single Judge, who considered the matter, disposed the writ petition by directing the appellant herein to consider the request of the writ petitioner for a rectification of his credit rating, after hearing the credit institutions concerned and the writ petitioner, and to take a decision in the matter within three months from the date of receipt of a copy of the judgment.

4. Before us, the contention of the appellant is that the directions of the learned Single Judge as against the appellant, to the extent it requires the appellant to adjudicate on the credit rating of the writ petitioner, is unworkable inasmuch as it would force the appellant to do something for which it is not empowered by the regulating statute namely, the Credit Information Companies (Regulation) Act, 2005 [hereinafter referred to as the “CICRA”]. It is stated, with reference to Section 21 of the CICRA, that the appellant can only make corrections, deletions or additions to the credit information after such corrections/deletions or additions have been certified as correct by the credit institution concerned.

5. We have heard Sri.Ajith Kumar, the learned counsel for the appellant, Sri.C.S.Abdul Sammad, the learned counsel for the 1st respondent as also Sri.Lal K. Joseph, the learned counsel for the 3rd respondent.

6. At the very outset, we must admit to being quite perplexed by the submission made on behalf of the appellant. After all, the learned Single Judge had only directed the appellant to look into the request of the writ petitioner for an expeditious rectification of his credit rating after getting the necessary data for completing the said exercise from the credit institutions concerned.

7. The appellant is a credit information company whose activities are regulated by the provisions of the CICRA. A reading of the statement of objects and reasons to the said enactment indicates that institutions such as the appellant were found to be necessary to arrest the accretion of fresh non-performing assets [NPAs] in the banking sector through an efficient system of credit information on borrowers as a first step to credit risk management. The requirement of an adequate, comprehensive and reliable information system on the borrowers, through an efficient database, was felt by the Reserve Bank of India, the Central Government, credit institutions and other players in the banking and financial sector. While the statutory provisions under the CICRA are largely geared towards regulating the functioning of credit information companies like the appellant herein, Section 15 of the CICRA makes it mandatory for every credit institution to be a member of a credit information company. Section 17 obliges credit information companies to collect credit information from their member credit institutions and the latter are obliged to furnish such information when required by the credit information companies. Section 21 of the CICRA obliges the credit institutions to furnish a person requesting for credit reports, with such a report, and on receiving a request from him to update the information in his credit report, to do so as well.

8. It is against the backdrop of the above statut