Allahabad High Court asks ICICI Bank Chairman to explain use of recovery agents despite Supreme Court bar

The Allahabad High Court recently 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 [Jasminder Chahal And 3 Others vs State of UP And 2 Others].Justice Prashant Kumar also ordered the ICICI Bank Chairman to clarify how a civil suit was filed against the loan consumer when the entire amount along with interest had been paid. The bank chairman was directed to file a personal affidavit. “He may also state as to how his Bank was still taking the services of the recovery agents when the same was clearly barred by the Hon'ble Supreme Court,” the Court said..The Court was hearing a petition seeking quashing of a defamation case filed against bank officials by one Rahul Singh, who had availed a home loan facility from the bank’s Noida branch.Though the loan amount along with the interest was paid, Singh was still shown as a defaulter in the CIBIL rating. The bank even filed a civil suit against him. “After getting the summons, the complainant filed a written statement and submitted all the documents showing that the entire loan amount alongwith interest and foreclosure charges has been paid and the loan account has been closed. In spite of having full knowledge the Bank continued to show that the complainant is defaulter,” the Court noted..Singh, who is an American citizen and an Overseas Citizenship of India (OCI) card holder, told the Court that recovery agents appointed by the bank kept visiting his house and made derogatory remarks against him. This led him to file a defamation case against the bank officials. While dealing with the petition seeking quashing of the defamation proceedings, Justice Kumar observed that despite knowing fully well that the loan account had been closed, the bank officers purposely kept showing Singh as defaulter. “In the year 2013, the Bank Officers had engaged two recovery agents, These recovery agents visited the ancestral house of the complainant-opposite party no. 2 and created a scene made derogatory statements which impacted the social status of the complaint-opposite party no. 2.”.Taking note of a Supreme Court judgement against use of recovery agents by bank officials, the Court asked the ICICI Bank Chairman to explain how they “had engaged the services of recovery agents in the year 2013, which is 6 years after passing of the judgement by the Hon'ble Supreme Court”The High Court will hear the matter next on July 10..Senior Counsel GS Chaturvedi with advocate Manish Trivedi represented the applicants.Advocate SK Chandraul represented the State.[Read Order]