ORDER

This Writ Petition, under Article 226 of the Constitution of India, is filed by the petitioner, seeking the following relief:

“….to issue an appropriate Writ, Order or Direction, more particularly one in the nature of Writ of Mandamus, declaring the action of Respondent No.3 in harassing the petitioner through loan recovery agents by sending them to the petitioner's house without permission and harassing, humiliating her in front of neighbours without following the guidelines of Reserve Bank of India by following Fair Practices Code for Transparency and Fairness as illegal, arbitrary, unconstitutional and violation of Article 14 and 21 of Constitution of India and consequently direct the 3rd respondent not to send any loan recovery agents to the petitioner's house without permission contrary to RBI Directions for purpose of alleged recovery of loan installments of the petitioner pending before the 3rd respondent in the interest of justice.…”

2. It is the case of petitioner that she has availed car loan from the respondent No.3-bank vide Loan A/c.No.37443787307 on 29.12.2017 for a sum of Rs.35,50,000/-. It is further case of the petitioner that ever since she obtained loan, she has been regularly paying the instalments in terms of the agreement and only during the COVID-19 pandemic period, the instalments were irregular.

During the COVID-19 pandemic period, the Reserve Bank of India (for short ‘RBI’) has imposed the Moratorium with regard to payment of loan amounts by postponing the same and as such she was unable to pay the amounts and subsequently as per the schedule, she has been complying with the terms and conditions of the loan agreement. It is also the case of the petitioner that the respondent No.3 without following the procedure, declared her account as NPA on 25.11.2023 and calculated the outstanding as Rs.11,74,173.53 paise as on 21.03.2024. It is further case of the petitioner that respondent No.3 has issued a notice dated 26.03.2024 for seizure of vehicle on the ground that EMI of Rs.57,387/- for the month of February, 2024 due on 27.02.2024 was not remitted/paid resulting overdue of loan account and therefore, to regularise the loan account, respondent No.3 demanded to pay Rs.1,42,858/-. It is also case of the petitioner that pursuant to the said notice dated 26.03.2024, the respondent No.3 without following the guidelines of RBI, has been sending the loan recovery agents to her 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 agreement by following the procedure established under law and they are not having any right to recover the loan amount by using force.

4. The issues raised in this writ petition are no longer res integra as the Hon’ble Supreme Court in ICICI Bank Ltd. vs. Prakash Kaur and others1, while dealing with the similar issues where the banks 1 (2007) 2 SCC 711 engaged the services of recovery/collection agents to recover the loans, observed as follows:

“16. Before we part with this matter, we wish to make it clear that we do not appreciate the procedure adopted by the Bank in removing the vehicle from the possession of the writ petitioner. The practice of hiring recovery agents, who are musclemen, is deprecated and needs to be discouraged. The Bank should resort to procedure recognised by law to take possession of vehicles in cases where the borrower may have committed default in payment of the instalments instead of taking resort to strong-arm tactics.”

5. Aggressive recovery tactics adopted by the agents of Banks/ Financial Institutions lead to the landmark judgment in ICICI Bank vs. Shanti Devi Sharma and others2, where the Hon’ble 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 proc