IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI (Special Original Jurisdiction) THURSDAY, THE TWENTIETH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 4447 OF 2025 Between: Phani Pavan Aditya Gandikota, S/o. Venkateswara Rao, Aged about 36 Years, R/o. D.No. 12-11-133/A, A B Nageswara Rao Street, Aryapuram, Rajahmundry, East Godavari, Andhra Pradesh. ...PETITIONER AND 1. Union Of India, rep by its Secretary, Ministry of Finance, Department of Expenditure Room-No74-B, New Delhi - 110001 (India). 2. The Reserve Bank of India, rep by its Executive Director 2 Central Office Building, Bharat Singh Marg, Mumbai. 3. HDFC Bank Limited, rep by its Manager, C/o. Retain Loan Service Centre, PT Rajan, Salai, KK Nagar, Chennai, Tamilnadu-600078. 4. HDFC Bank Credit Card, rep by its Manager, C/o. HDFC Bank Cards Division, Door No.94 SP, Estate Bus Stand, Wavin Main Mogappair West, Chennai, Tamilnadu-600058 5. SBI BPCL Credit Card, rep by its Manager, C/o. SBI Cards and Payment Services Ltd, DLF Infinity Towers, Tower C, 12**^ Floor, Block 2, Building 3, DLF Cyber City, Gurgaon, Haryana -122002. 6. INDUS IND Bank Credit Card, rep by its Manager, C/o. INDUS IND Bank Ltd (Credit Card Division), PC Box 9421 Andheri(E), Mumbai, Maharashtra-400093. 7. ICICI Bank Limited, rep by its Manager, C/o. No.32, Casa Major Road Egmore, Chennai, Tamilnadu-600008. nd floor. Road Chakala, MIDC, 8. ICICI Bank Pay Later Credit Card, rep by its Manager, C/o. ICICI Bank ^ 'Limited, Bandra Kurla Complex, Mumbai 400051, India. 9. ICICI Bank Limited Cverdraft Account, rep by its Manager, C/o.ICICI Phone Banking Center, ICICI Bank Tower, 7^'" floor. Survey no 115/27, Plot no., Nanakramguda, Serilingampally, Hyderabad - 500032. IDFC Bank Credit Card, rep by its Manager, C/o. 4 Casa Major Road, Egmore, Chennai, Tamilnadu-600008 ?■ - 10. Floor, 6/18, 11. RBL Bank Credit Card, rep by its Manager, C/o. RBL Bank credit card headquarters. One World Centre, Tower 2B, Floor, 841 Senapati Bapat Marg, Lower Parel (W), Mumbai, Maharashtra-400013 . 12. South India Bank One Credit Card, rep by its Manager, through agency FPL Technologies Pvt Ltd, One FIQ, Survey No. 127, Seasons Road, opposite Sarjaa, Aundh, Pune, Maharashtra-411007. Standard Chartered Bank Credit Card, rep by its Manager, C/o. Standard Charteded Credit Cards, Crescenzo, C-38/39, G Block, Behind MCA Club, Bandra kurla Complex, Bandra(East), Mumbai, Maharashtra-400051. 13. 14. Kisetsu Saison Finance(lndia) Pvt Ltd, rep by its Manager through Dreamplug Technologies Pvt. Ltd(Cred), IndiQube Lexington Tower, First Floor, Tavarekere Main Road, S.G.Palya, Bengaluru, Karnataka- 560029. ...RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court be pleased to issue a Writ Order or direction particularly, one in the nature of a WRIT OF MANDAMUS declaring the action of the Respondent Nos. 3 to 14, who are attempting to recover loan amounts from the petitioner by sending recovery agents' to the petitioner’s residence without adhering to the Circular issued by Respondent No. 2, vide RBI/2022- 23/108 DOR.ORG.REC.65/21.04.158/2022-23, dated 12.08.2022. Such actions illegal, arbitrary, and in violation of Articles 14 and 21 of the Constitution of may are India and Consequently, direct Respondent Nos. 3 to 14 to immediately stop sending recovery agents to the petitioner's residence and to strictly adhere to the Circular issued by Respondent No. 2, vide RBI/2022- 23/108 DOR.ORG.REC.65/21.04.158/2022-23, dated 12.08.2022, while recovering any outstanding loans. lA NO: 1 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct Respondent Nos.3 to 14 not to take any coercive steps against the petitioner, including sending recovery agents to the petitioner's residence for loan recovery and pass order or orders in accordance with the law pending disposal of the above writ petition. Counsel for the Petitioner: M/S RAJANI NELAKUDITI Counsel for the Respondent No.1: SRI PASALA PONNA RAO, DEPUTY SOLICITOR GENERAL OF INDIA Counsel for the Respondent No’s. 2 to 14:NONE The Court made the following ORDER: APHC010086292025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) H’r^S [3329] THURSDAY ,THE TWENTIETH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 4447/2025 Between: ...PETITIONER Phani Pavan Aditya Gandikota AND ...RESPONDENT{S) Union Of India and Others Counsel for the Petitioner: RAJANI NELAKUDITI 1. Counsel for the Respondent(S): 1. The Court made the following: r 2 V// THE HON’BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA WRIT PETITION NO: 4447/2025 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 14, who are attempting to recover loan amounts from the petitioner by sending recovery agents to the petitioner’s residence without adhering to the Circular issued by Respondent DOR.ORG.REC.65/21.04.158/2022-23, dated 12.08.2022. Such actions are illegal, arbitrary and in violation of Articles 14 and 21 of the Constitution of India and Consequently direct Respondent Nos.3 to 14 to immediately stop sending recovery agents to the petitioner’s residence and to strictly adhere to the Circular issued Respondent DOR.ORG.REC.65/21.04.158/2022-23 dated 12.08.2022 while recovering any outstanding loans and to pass such other order or orders...” RBI/2022-23/108 No. 2 vide by No. 2 vide RBI/2022-23/108 2. Heard learned counsel for petitioner and learned counsel for the respondents. The grievance of the petitioner is that the respondents are entitled 3. 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. The issues raised in this Writ Petition are no longer res Integra as 4. the Hon’ble Supreme Court in ICICI Bank Ltd. vs. Prakash Kaur and others\ while dealing with the similar issues where the banks (2007) 2 see 711 f 3 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 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. ” 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 Flon’ble Supreme Court 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/secured assets in cases where the borrower commits default in repayment of loan/ loan account is ^(2008) 7 see 532 4 r declared as NPA, are resorting to strong-arm tactics. The Hon’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 Services - Responsibilities of regulated entities employing Recovery Agents 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 are, therefore, responsible for the actions of their service providers including Recovery Agents (hereafter referred to as ’agents’). 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 or harassment of any kind, either verbal or physical, against any person in their debt collection efforts. w 5 including acts intended to humiliate publicly or intrude upon the privacy of the debtors' family members, referees and friends, sending Inappropriate messages either on mobile or through social media, making threatening and/or anonymous calls, persistently calling the borrower and/or calling the borrower before 8:00 a.m. and after 7:00 p.m. for recovery of overdue loans, making false and misleading representations, etc. 3. The instructions contained in para 2 above shall supplement and be read in conjunction with the existing guidelines/directions issued by the Reserve Bank of India, as amended from time to time, including those tabulated in Annex. 4. Any violation in this regard by REs will be viewed seriously. 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” 6 For the aforesaid reasons and as the procedure adopted by the 8. 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). 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 2"^^ respondent and as 9. hold by the Flon’ble Apex Court as stated supra. With the above direction, this writ petition is disposed of. There 10. shall be no order as to costs. Miscellaneous petitions, if any pending, in this case, shall stand closed. Sd/- K. TATA RAO DEPUTY REGISTRAR //TRUE COPY// SECTION OFFICER To, 1. The Secretary, Ministry of Finance, Department of Expenditure Union Of India, Room-No74-B,New Delhi - 110001 (India). 2. The Executive Director, Reserve Bank of India, 2 Building, Bharat Singh Marg, Mumbai. 3. The Manager, C/o. Retain Loan Service Centre, HDFC Bank Limited, PT Rajan, Salai, KK Nagar, Chennai, Tamilnadu-600078. 4. The Manager,HDFC Bank Credit Card Division, Door No.94 SP, Estate Bus Stand Mogappair West, Chennai, Tamilnadu-600058 5. The Manager, SBI BPCL Credit Card, C/o. SBI Cards and Payment Services Ltd, DLF Infinity Towers, Tower C, 12 Building 3, DLF Cyber City, Gurgaon, Haryana -122002. 6. The Manager, INDUS IND Bank Credit Card, C/o. INDUS IND (Credit Card Division), PC Box 9421, Chakala Mumbai, Maharashtra-400093. 7. The Manager, ICICI Bank Limited, C/o. No.32, Egmore, Chennai, Tamilnadu-600008. 8. The Manager, ICICI Bank Pay Later Credit Card Limited, Bandra Kurla Complex, Mumbai 400051 9. The Manager, ICICI Bank Limited Overdraft Account, C/o.lCICI Phone Banking Center, ICICI Bank Tower, 7th floor. Survey no 115/27, Plot No., Nanakramguda, Serilingampally, Hyderabad - 500032. The Manager,! DFC Bank Credit Card, C/o. 4*'' Floor, 6/18 Major Road, Egmore, Chennai, Tamilnadu-600008 nd floor. Central Office C/o. HDFC Bank Cards Wavin Main Road, th Floor, Block 2, Bank Ltd MIDC, Andheri(E), Casa Major Road C/o. ICICI Bank India. 10. Casa 11. The Manager,RBL Bank Credit Card, C/o. RBL Bank credit card headquarters. One World Centre, Tower 2B, 6 Bapat Marg, Lower Parel (W), Mumbai, Maharashtra-400013. The Manager,South India Bank One Credit Card, through FPL Technologies Pvt Ltd, OneFIQ, Survey No. opposite Sarjaa, Aundh, Pune, Maharashtra-411007. The Manager, Standard Chartered Bank th Floor, 841, Senapati 12. agency 127, Seasons Road, 13. Credit Card, C/o. Standard Charteded Credit Cards, Crescenzo, C-38/39, G Block, i Behind MCA Club, Bandra kurla Complex, Bandra(East), Mumbai, Maharashtra-400051. The Manager, Kisetsu Saison Finance(lndia) Pvt Ltd, through Dreamplug Technologies Pyt Ltd(Cred), IndiQube Lexington Tower, First Floor, Tavarekere Main Road, S.G.Palya, Bengaluru, Karnataka- 560029. 14. 15. One CC to M/S. RAJANI NELAKUDITI, Advocate [OPUC] One CC to SRI PASALA PONNA RAO, DEPUTY SOLICITOR GENERAL OF INDIA [OPUC] Three CD Copies 16. 17. PRK HIGH COURT DATED:20/02/2025 ORDER ^ ' 5 10 MAR 2025 ^ . Current Section . ^t£!CSPATCH^tf!< WP.No.4447 of 2025 O SOI DISPOSING OF THE W.P. WITHOUT COSTS