IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON’BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITION No.37687 of 2025 DATE OF ORDER:-09.12.2025 BETWEEN:

Lenin Kumar Kambam, S/o.Santha Kumar, R/o.Kukatpally, Hyderabad.

… Petitioner AND Union of India rep. by its Secretary, Ministry of Finance, New Delhi & others.

… Respondents ORDER:-

1. This Writ Petition is filed under Article 226 of the Constitution of India seeking the following relief:-

“.. … … to issue an appropriate Writ, Order or Direction, more particularly in the nature of Writ of Mandamus, declaring the action of respondent No.3 in attempting to recover amounts from the petitioner as illegal and arbitrary and in violation of Reserve Bank of India Circular bearing No.RBI/2022-23/108, DOR.ORG.REC.65/21.04.158/2022-23 dated 12.08.2022 and further declaring the inaction of respondent No.2 in enforcing the said circular as unconstitutional and violative of Article

14, 19 & 21 of the Constitution of India and consequently to (b) 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 No.3, their agents, recovery agents, executives, managers, or any person acting on their behalf from engaging in any acts of intimidation, harassment, humiliation or intrusion into the privacy of the petitioner or his family members, referees or friends, including persistent or anonymous calls, threatening messages or physical visits to the petitioner’s premises;

(c) direct respondent No.2 to enforce the said RBI Circular in letter and spirit and to initiate appropriate and stringent action against the errant officials of respondent No.3 for violating legal norms and (d) direct respondent No.3 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.”

2. The case of the petitioner is that he availed personal loan from respondent No.3, who is a private banker and financial institution and utilized the amount and he has been prompt in repaying the same without fail. It is further case of the petitioner that ever since he obtained loan, he had been regularly paying the installments till July, 2024 and due to severe hardship which ruined the financial stability, he could not pay the remaining installments. It is also the case of the petitioner that respondent No.3, without following the guidelines of RBI, has been sending the loan recovery agents to his house and harassing to pay the amount 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 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 others, (2007) 2 SCC 711, while dealing with the similar issues where the banks 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 1 (2007) 2 SCC 711 3 CVBR, J Wp_5200_2024 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 others, (2008) 7 S