APHC010635452025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3327] TUESDAY, THE SEVENTEENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE K SREENIVASA REDDY WRIT PETITION NO.32918 OF 2025 Between: Mohammad Irfan ...PETITIONER AND The Union of India and others ...RESPONDENTS Counsel for the Petitioner: 1. Y V SRINIVASAN Counsel for the Respondents: 1. GP FOR HOME 2. MANNAM VENKATA KRISHNA RAO 3. DASAM DURGA SHIVA SAI 4. BACHINA HANUMANTHA RAO (CENTRAL GOVT COUNSEL) 5. KUNUKU RAJA SEKHAR The Court made the following ORDER: This Writ Petition, under Article 226 of the Constitution of India, is filed by the petitioner, seeking the following relief: "....to issue Writ of Mandamus declaring the action of respondent Nos.3 to 5 in sending unsocial SRK, J WP No.32918 of 2025 2 elements in the name of Recovery Agents and threatening the petitioner with dire consequences if EMIs are not repaid, as illegal, arbitrary and violation of Articles 14, 19 and 21 of the Constitution of India and consequently direct respondent Nos.3 to 5 to stop sending unsocial elements/recovery agents forthwith to the petitioner’s home and follow the due procedure as contemplated by law to recover any loans that may be due to them by the petitioner and (b) to direct respondent Nos.1 and 2 to issue orders to respondent Nos.3 to 5 and its head of the institution to implement the RBI guidelines in respect of appointment of qualified recovery agents strictly adhering to RBI guidelines, vide proceedings RBI / 2022-23 / 108 DOR.ORG.REC.65 / 21.04.158 / 2022-23, dated 12.08.2022, in the interest of justice.” 2. Case of the petitioner is that he started old Tyres and Scrap business at Gajuwaka under the name and style as “Rais Tyre Works” in the year 2021 by spending huge amounts and borrowing loans from respondent Nos.3 to 5. Due to fluctuation in the market, his business gradually fell apart and he failed to pay some loan installments from 05.08.2025. While so, respondent Nos.3 to 5 engaged different local unsocial elements/rowdy sheeters in the name of recovery agents and started sending them to the house of the petitioner continuously and creating nuisance by harassing the petitioner. Petitioner approached respondent Nos.3 and 4 on 29.10.2025 and stated that he would SRK, J WP No.32918 of 2025 3 pay the balance EMIs soon and requested them not to send unsocial elements under the guise of Recovery Agents to his house. He also requested respondent No.5 over phone, but in vain. Hence, he filed the present Writ Petition. 3. Respondent Nos.3 and 4 filed their counters denying the allegations made by the petitioner and, inter alia, stating that they are strictly adhering to the regulatory and statutory guidelines issued by the RBI in recovering the loan amount due from the petitioner. The present Writ Petition is an attempt to misuse the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India for private contractual disputes, hence the same is liable to be dismissed. 4. Heard. Perused the record. 5. The grievance of the petitioner is that respondents 3 to 5 without following the procedure established under law, are using force to recover the overdue amount by sending recovery agents to his house and threatening with dire consequences. 6. The issue raised in this Writ Petition is no longer res integra. The Hon'ble Supreme Court in ICICI Bank Ltd. vs. Prakash Kaur and others1, while dealing with the similar issue where the banks engaged the services of recovery/collection agents to recover the loans, observed as follows: 1 (2007) 2 SCC 711 SRK, J WP No.32918 of 2025 4 "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." 7. Aggressive recovery tactics adopted by the agents of Banks/Financial Institutions lead to the landmark judgment in ICICI Bank vs. Shanti Devi Sharma and others2, wherein the Hon'ble Supreme Court directed the Banks/Financial Institutions to strictly follow the guidelines issued by the Reserve Bank of India. 8. In the above referred judgments, the Hon'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 2 (2008) 7 SCC 532 SRK, J WP No.32918 of 2025 5 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 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. 9. 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, 2022 Madam/ 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 SRK, J WP No.32918 of 2025 6 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, 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, persistently1 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 SRK, J WP No.32918 of 2025 7 Bank of India (Regulatory Framework for Microfinance Loans) Directions, 2022', dated March 14, 2022. Yours faithfully, (Sunil T. S. Nair) Chief General Manager" 10. For the aforesaid reasons and as the procedure adopted by the respondents for recovery of amount due from the petitioner, amounts to violation of the rights guaranteed under Articles 14 and 21 of the Constitution of India, this Court directs the respondents, to ensure that the agents engaged by the Banks/Financial Institutions for recovery of the overdue amount, shall strictly follow the guidelines and instructions issued by the Reserve Bank of India and also the observations in 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). 11. With the above direction, this Writ Petition is disposed of. There shall be no order as to costs. As a sequel thereto, the miscellaneous applications, if any, pending in this Writ Petition shall stand closed. ________________________ K. SREENIVASA REDDY, J. Date:17.02.2026 Nsr SRK, J WP No.32918 of 2025 8 HON’BLE SRI JUSTICE K. SREENIVASA REDDY Writ Petition No.32918 of 2025 Date:17.02.2026 Nsr