In all these writ petitions, the prayer sought for is to issue a Writ of Mandamus directing the second respondent to take action against the banks or financial institutions which have lent money to the respective petitioner, to follow the due process of law, regarding collection of loan amount, as guided by Reserve Bank of India forthwith based on their complaints.
2. The petitioners in these writ petitions have availed credit card/ term loan or housing loan facility from the respective bank. According to the petitioners, they have repaid the amount periodically, however, owing to pandemic situation, they could not pay the loan amount. Notwithstanding the adverse financial situation faced by the petitioners, the recovery personnel attached to the lending banks / financial institutions frequently called upon them and demanded the repayment of the entire balance amount by slapping 14/20 / exorbitant interest. Unable to sustain the frequent threats unleashed by the recovery agents appointed by the lending banks/financial institutions to collect the loan amount, the petitioners have given complaints to the Banking Ombudsman seeking to take appropriate action against the lending banks/ financial institutions for the unfair and unreasonable practice adopted in the matter of recovering the loan amount through threat and coercion. According to the petitioners, the complaints given by them have not been considered so far and therefore, they have filed these writ petitions.
3. The learned counsel for the petitioners submit that the Honourable Supreme Court, time and again, held that private banks should not resort to collect the borrowed amount by adopting third degree methods and such a practice has been deprecated. To substantiate such contention, he placed reliance on the order dated 26.02.2007 passed by the Honourable Supreme Court in Appeal (Crl) No. 267 of 2007 in the case of (Manager, ICICI Bank Limited vs. Prakash Kaur and others) wherein it was held that Banks have to be held vicariously liable for such acts of the agents engaged by them and that the recovery of loan or vehicles has to be done only through legal means and Banks cannot employ goondas to take possession by force. In the present case, according to the counsel for the petitioners, the lending banks/ financial 15/20 / institutions engaged goondas and hooligans to collect the loan amount from the petitioners without following the due process of law and therefore, the petitioners have been constrained to give a complaint to the Banking Ombudsman. However, no action has been taken on the complaints given by the petitioners, hence, the learned counsel for the petitioners prayed this Court to issue appropriate direction to the lending banks/financial institutions to recover the loan amount only by adopting due process of law.
4. The learned counsel appearing for the respective banks/financial institutions vehemently contend that the banks/financial institutions have not adopted any such unlawful method in collecting the loan amount. The petitioners, having availed the term loan/credit card facility or housing loan have failed to repay the loan amount. The loan amount was directed to be repaid by the bank in a lawful manner and the question of exerting pressure towards the petitioners through third degree method does not arise. The petitioners have availed huge amount and committed default in payment of loan amount. When the petitioners committed default in payment of the loan amount, the lending banks/financial institutions lawfully demanded the repayment of the loan amount. However, the petitioners have raised various allegations as against the lending banks/financial institutions in the matter of 16/20 / collection of the loan amount. It is vehemently contended by the counsel for the lending banks/financial institutions that the present attempt on the part of the petitioners, in filing these writ petitions, is to throttle the legitimate process initiated by the lending banks/financial institutions to recover the loan amount and therefore, they prayed for dismissal of the writ petitions.
5. Heard the counsel for both sides. The grievance of the petitioners is that the lending banks/financial institutions have resorted to collect the loan amount payable by them without following due process of law and the complaints submitted by them to the Banking Ombudsman have not been acted upon.
6. At the outset, the correctness or otherwise of the grievance expressed by the petitioners that the lending banks/financial institutions have engaged musclemen or goons to collect the loan amount, cannot be examined by this Court in these writ petitions. This is more so that the learned counsel for the respective lending banks/financial institutions denied having engaged goondas or hooligans to collect the loan amount from the petitioners. In fact, the petitioners have given complaints to the Banking Ombudsman narrating their grievance. The Banking Ombudsman has been exclusively constituted 17/20 / under The Banking Ombudsman Scheme, 2006 with the object of resolving complaints relating to certain services rendered by banks and to facilitate the satisfaction or settlement of such complaints. As per Chapter III, Clause 7 (2) of The Banking Ombudsman Scheme 2006, the Banking Ombudsman shall receive and consider complaints relating to the deficiencies in banking or other services. Clause 10 empowers the Banking Ombudsman to call for the records from the bank against whom the complaint is made. When such power is conferred on the Banking Ombudsman and the petitioners also already subjected themselves to the jurisdiction of the Banking Ombudsman with complaints, this Court is of the view that such complaints preferred by the petitioners before the Banking Ombudsman shall be directed to be disposed of in accordance with law.
7. In the light of the above facts, this Court hereby directs the Banking Ombudsman to consider the complaints said to have been given by the petitioners herein on various dates and pass orders thereof on merits and in accordance with law, after affording an opportunity of hearing to the petitioners (complainant) as well as the respective lending banks/financial institutions, within a period of eight weeks form the date of receipt of a copy of this order. 18/20 /
8. Accordingly, all the writ petitions are disposed of. No costs. 06.10.2021 Index : Yes/No Internet : Yes/No
1. Union of India rep. by General Manager Reserve Bank of India Fort Glacis, Kamarajar Salai Chennai - 600 001
2. The Banking Ombudsman C/o. Reserve Bank of India (Banking Office) Fort Glacis, Kamarajar Salai Chennai - 600 001 19/20 / R. MAHADEVAN, J WP Nos. 1057, 2129, 2595, 7922, 13657, 13659, 16707, 16712, 17862, 17965, 20580, 20638 and 21624 of 2021 06.10.2021 20/20 /
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