IN THE HIGH COURT OF ANDHRA PRADESH :: (Special Original Jurisdiction) MONDAY, the TWENTY SEVENTH DAY OF TWO THOUSAND AND TWENTY FIVE PRESENT the HON’BLE SRI JUSTICE VENKATESWARLU WRIT PETITION NO: 1786 OF 2Q2j> AMARAVA’ JANUAI NIMMAGADDA Between; Yakkaluri Mallikarjuna, S/o Y, Krishnaiah, Aged about 31 years, R/o 3/99, KGV Palle, Kokatam, Kamalapuram,YSR Kadapa District Andhra Pradesh ...PETITIONER AND 1. Union of India, Rep by its Secretary Ministry, of Finance Department of Expenditure, |?oom-No74-B, New Delhi - 110001 (India) 2. The Reserve Bank of India, Rep by its Executive Director, 2nd floor. Central Office Building, Bharat Singh Marg, Mumbai. 3. ICICI Bank rep by it's Manager. C/o NilgirisBuiling Srinagar Colony Main Road, Hyderabad-500073. 4. HDFC Bank, rep by its Manager, C/o GTS Road, Perungalathur.Tamilnadu, Chennai-600063. 5. Kotak Mahindra Bank. Rep by its Manager. C/O.D.NO.6-3-1109/1/P2 SrdFloor. Navabharath Chambers. RajBhavan Road Hyderabad-500082. , Kamalapuri Colony, Somajiguda 6. Standard Chartered Bank, Rep by its Manager C/o P.O Box 8888, Customer Care Unit, Standard Chartered Bank,Chennai-600001. 7, SBI, Rep by it's Manager, C/o Customer Towers, Tower C, 12thFloor, Block 2, Gurugram -122002. (Haryana) India. Correspondence Unit DLF Infinity Building 3. DLF Cyber City, 8. ICICI Bank Credit Cards, Rep by it's Manager, C/o ICICI Phone Banking . .C.pnter, ICICI Bank Tower, Zthfloor, Survey no. 115/27, Plot no. 12, .. Nanakramguda, Serilingampally, Hyderabad-500032. 9. Axis Bank, Rep by it's Manager, C/o CPU 1st floor, Gigaplex, Plotno.l.T 5, MIDC, Airoli Kenowledge Park, Airoli, Navi Mumbai-400708. 10. Indusind Bank, Rep by it's Manager, C/o 10, Near Aditya Birla Garments, Parappana Agrahara, C.K.Nagar, Hosa Road. Bangalore - 560100, Karnataka. ...RESPONDENTS Petition under Article 226 of the Constitution of India circumstances stated in the affidavit filed therewith, the High Court pleased to issue an appropriate writ, order or direction particularly one nature of writ of Mandamus declaring the action of the Respondents 3 to 10 in trying to recover the loan amounts from the petitioner by sending agents to the residence of the petitioner without following Circular issued by the respondent no.2 vide RBI/202223/ 108 DOR ORG praying that in the may be in the recovery REC 65/ 21 04 158/202223dated 12.08.2022 as illegal, arbitrary and against Article 14, 19 and 21 of the Constitution of India and to consequently direct the Respondents recovery agents to the Petitioners no.2 vide 12.08.2022 Nos.3 to 10 to forth with stop sending residence and to duly follow Circular issued by the respondent RBI/202223/108 DOR ORG REC 65/ 21 04 158/202223 dated whilerecovering loans that may be due to them. lA NO: 1 OF 202fi Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the writ petition, the High Court may be pleased to direct the respondent no.3 to 10 not to take any coercive measures '.iV V- against the petitioner without following due process of law and mandatorily following Circular dated 12.08.2022 vide RBI/2022 23/108,DOR ORG REC 65/21 04 1 58/20222 issued by respondent no 2 pending disposal of the writ petition Counsel for the Petitioner: SRI MEDARA SIVA PRASAD Counsel for the Respondent No.1: SRI P PONNA RAO, DEPUTY SOLICITOR GENERAL OF INDIA Counsel for the Respondent No.2 to 10: None appeared The Court made the following: ORDER APHC010033372025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3329] MONDAY ,THE TWENTY SEVENTH DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 1786/2025 Between; Yakkaluri Mallikarjuna ...PETITIONER AND Union Of India and Others ...RESPONDENT(S) Counsel for the Petitioner: 1 .MEDARA SIVA PRASAD Counsel for the Respondent(S): 1. The Court made the following: i.- THE HON’BLE SRI JUSTICE VENKATESWARLU NIMMAGADDa WRIT PETITION No.1786 OF 2025 ORDER:- This writ petition is filed under Article 226 of the Constitution of the India seeking the following reliefs:- “issue an appropriate writ order or direction particularly one in the nature of writ of Mandamus declaring the action of the Respondent Nos. 3 to 10 in trying to recover the loan amounts from the petitioner by sending recovery agents to the residence of the petitioner without following Circular issued by the respondent No. 2 vide RBI/2022-23/ 108 DOR ORG REC 65/ 21 04 158/2022-23dated 12.08.2022 as Illegal, arbitrary and against Article 14, 19 and 21 of the Constitution of India and to consequently direct the Respondents Nos. 3 to 10 to forth with stop sending recovery agents to the Petitioners residence and to duly follow Circular issued by the respondent No. 2 vide RBI/202223/108 DOR ORG REC 65/21 04 158/2022-23 dated 12.08.2022 while recovering loans that may be due to them and to pass such other order or orders... ” Heard learned counsel for petitioner and learned counsel for 2. the respondents. The grievance of the petitioner is that the respondents are 3. 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 Prakash Kaur and others^, while dealing with the similar issues where the banks engaged the services of recovery/collection agents to recover the loans, observed as follows; Bank Ltd. vs. 16. Before we part with this matter, we wish to 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 musclemen, is deprecated and needs to be discouraged. The Bank should resort to procedure recognized by law to take possession of vehicles in cases where the borrower may have committed default In payment of the installments instead of taking resort to strong-arm tactics. ” make are 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^, 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 ^ (2007) 2 see 711 ^ (2008) 7 see 532 -/m J|V condemned the procedure adopted by the Banks/Financial Institutions in employing recovery agents who are acting as middlemen for securing possession of vehicles/secured assets in cases where the borrower commits default. It was observed that Banks/Financial Institutions, instead of taking recourse to follow the procedure recognized by law for securing the possession of vehicles/secure d assets in cases where the borrower commits default in repayment of loan/ loan account is declared as NPA, are resorting to strong-arm tactics. The Flon’ble Supreme Court delineated the guidelines issued by the Reserve Bank of India time and again on the fair conduct by lenders, with reference to usage of services of recovery agents. It also stated that the banks should be reminded of the rule of law and strict action must be taken by the RBI in case of breach of such guidelines. 7. It is apt and appropriate to extract latest guidelines issued by the Reserve Bank of India on 12.08.2022 with regard to outsourcing of Financial Services - Responsibilities of regulated entities employing Recovery Agents, which reads as follows: "RBI/2022-23/108 DOR.ORG.REC.65/21.04. 158/2022-23 August 12, 2022Madam/ Sir, Outsourcing of Financial Responsibilities of regulated employing Recovery Agents Services entities The Reserve Bank of India has from time to time advised regulated entities (REs) that the ultimate responsibility for their outsourced activities vests with them and they therefore, responsible for the actions of their service providers including Recovery Agents (hereafter referred to as ‘agents’). are, 2. it has been observed that the agents employed by REs have been deviating from the extant instructions governing the outsourcing of financial services. In view of concerns arising from the activities of these agents, it is advised that the REs shall strictly ensure that they or their agents do not resort to intimidation harassment of any kind, physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude upon the privacy of the debtors' family members, referees and or either verba! or friends, sending inappropriate messages either on mobile or through social media, making threatening and/or calls, persistently calling the borrower and/or calling the borrower before 8:00 a.m. and after 7:00 anonymous p.m. for recovery of overdue loans, making false and misleading representations, etc. The instructions contained in para 2 above shall supplement and be read in conjunction 3. with the existing guidelines/directions issued by the Reserve Bank of India, as amended from time to time, including those tabulated in Annex. Any violation in this regard by REs will be viewed seriously. 4. Applicability 5. This circular shall apply to the following REs; (a) All Commercial Banks (Including Local Area Banks, Regional Rural Banks, and Small Finance Banks) excluding Payments Banks; (b) All All-India Financial Institutions (viz. Exim Bank. NABARD, NHB, SIDBI, and NaBFID); (c) All Non-Banking Financial Companies including Housing Finance Companies; (d) All Primary (Urban) Co-operative Banks, State Co- operative Banks, and District Central Co-operative Banks; and (e) All Asset Reconstruction Companies. 6. This circular shall not apply to microfinance loans covered under ‘Master Direction - Reserve Bank of India (Regulatory Framework for Microfinance Loans) Directions. 2022’, dated March 14. 2022. Yours faithfully, (Sunil T. S. Nair) Chief General Manager” I 3 8. For the aforesaid reasons and as the procedure adopted by the respondents for recovery of loan amount from the petitioner, amounts to violation of the rights guaranteed under Articles 14 and 21 of the Constitution of India, this Court deems it appropriate to direct the respondents, to ensure that the agents engaged by them for recovery of the loan amounts, shall strictly follow the guidelines and instructions issued by the Reserve Bank of India and also the judgments of the Hon’ble Supreme Court in ICICI Bank Ltd. vs. Prakash Kaur’s case (1 supra) and ICICI Bank vs. Shanti Devi Sharma’s case (2 supra). 9. In view of the foregoing discussion, this Court deems it appropriate to direct the respondents, to ensure that the agents engaged by them for recovery of the loan amounts shall strictly adhere to the guidelines and instructions issued by the 1®' respondent and hold by the Hon’ble Apex Court as stated supra. as 10. With the above direction, this writ petition is disposed of. There shall be no order as to costs. Miscellaneous petitions, if any pending, in this case, shall stand closed. Sd/- G SRINIVAS REDDY DEPUTY REGISTRAR ' SECTION OFFICER //TRUE COPY// To Union of India, Finance Department of 1. The Secretary Ministry Expenditure, Room-No74-B, New Delhi - 110001 (India) Bank of India, 2nd floor. Central Office 2. The Executive Director, Reserve Building, Bharat Singh Marg, Mumbai. '1$. The Manager, ICICI Bank C/o Nilgiris Bulling, Kamalapuri Colony, Srinagar Colony Main Road, Hyderabad-500073. 4. The Manager, HDFC Bank, C/o GTS Road, Perungalathur,Tamilnadu , Chennai-600063. 5. The Manager, Kotak Mahindra Bank, C/O.D.NO.6-3-1109/1/P2, 3rdFloor, Navabharath Chambers, RajBhavan Road, Somajiguda, Hyderabad- 500082. 6. The Manager, Standard Chartered Bank, Rep by its Manager, C/o P.O Box 8888, Customer Care Unit, Standard Chartered Bank,Chennai-600001 . 7. The Manager, SBI, C/o Customer Correspondence Unit DLF Infinity Towers, Tower C, 12thFloor, Block 2, Building 3, DLF Cyber City, Gurugram -122002, (Haryana) India. 8. The Manager, ICICI Bank Credit Cards, C/o ICICI Phone Banking Center, ICICI Bank Tower, 7thfloor, Survey no. 115/27, Plot no. 12, Nanakramguda, Serilingampally, Hyderabad-500032. 9. The Manager, Axis Bank, C/o CPU 1st floor, Gigaplex, Plotno.l.T 5, MIDC, Airoli Kenowledge Park, Airoli, Navi Mumbai-400708. 10. The Manager, Indusind Bank, C/o 10, Near Aditya Birla Garments, Parappana Agrahara, C.K.Nagar, Hosa Road, Bangalore - 560100, Karnataka. 11. One CC to SRI. MEDARA SIVA PRASAD, Advocate [OPUC] 12.One CC to SRI. P. PONNA RAO, Advocate (SC FOR CENTRAL GOVERNMENT) [OPUC] 13. Three C.D.Copies nm HIGH COURT DATED:27/01/2025 ORDER WP.No.1786 of 2025 DISPOSING OF THE W.P. WITHOUT COSTS