Explain why recovery agents were engaged in a loan case despite prohibition…..Allahabad High Court asks Chairman ICICI Bank.


Rajesh Pandey

The Allahabad High Court has directed the Chairman of the ICICI Bank to personally explain how the bank’s officials had engaged recovery agents in a loan case despite a prohibition on it by the apex court.


Hearing a petition filed by Jasminder Chahal and three others, all officers of ICICI bank, Justice Prashant Kumar said, “The officers of the ICICI Bank were very well aware of the fact that they cannot engage any recovery agent, and yet they had engaged the services of recovery agents in the year 2013, which is six years after passing of the judgement by the Supreme Court”.




The Supreme Court in the matter of ICICI Bank Ltd. Vs. Prakash Kaur (2007) 2 SCC 711 had categorically held that the Bank will not use the services of the recovery agents to recover the Bank loans and they have to follow the procedure as laid down under the law.


As the chairman of ICICI was not a party in the petition filed under section 482 (inherent powers of high court), the court permitted the applicants to make him party in the petition.


As per facts of the case, a loan was taken by one Rahul Singh and later the entire loan amount with interest was paid. Despite the whole payment, ICICI showed him as defaulter, as a result he failed to obtain further loan or financial assistance, which hampered him business interest.


What is more, the ICICI filed a civil suit against the borrower in Kanpur Nagar and used recovery agents, who according to respondent (borrower) reached his ancestral house when he was in America. The recovery agents, according to him used to derogatory remarks and maligned his image in society. Hence, perturbed over it, the respondent- Rahul Singh filed a criminal complaint before the Kanpur Nagar court, which issued summons to the ICICI officials. Hence, the applicants, who are ICICI officers filed present petition before the high court seeking stay of entire proceedings going on against them.


After hearing both sides, the court directed the Chairman, ICICI, Bank to clarify as to how, a civil suit was filed against the complainant – Rahul Singh, especially when the entire loan amount along with interest and foreclosure charges were paid, and why the complainant was put to the harassment. The chairman was also directed to state as to how his Bank was still taking the services of the recovery agents when the same was clearly barred by the Supreme Court.


The court in its order dated May 15 also directed to list this case on July 10, 2024 for the next hearing.


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