The Allahabad High Court today sought an explanation from the ICICI Bank for using recovery agents for a loan repayment by an OCI (overseas citizen of India) despite the Supreme Court’s order to not use the services of recovery agents back in 2007.

The court, under Justice Prashant Kumar J, was hearing an application by the ICICI bank, challenging a summons from the Kanpur Nagar district magistrate.

The bank was summoned over a complaint filed by Rahul Singh, who had complained that the bank had sent recovery agents to his ancestral home, who used derogatory remarks to harm his reputation.

Loan and repayment

As reported by Bar and Bench, the online legal news portal, Singh, who is an OCI resident of the USA, had taken a loan of ₹7,80,000 from the ICICI Bank in 2002. 

In May 2005, Singh had repaid his loan to the bank. However, the bank repeatedly contacted him for the repayment. Moreover, he was shown as a defaulter in his CIBIL (Credit Information Bureau (India) Limited).

Moreover, the bank also filed a civil suit against Singh for non-repayment of the loan.

Despite turning in the proof of the foreclosure of the loan, he continued to be shown as a defaulter by the bank.

When Singh wanted to set up another business, he approached ICICI Bank again but was turned down due to the low CIBIL rating, stated the court order, a copy of which was acquired by Gujarat Samachar Digital.

Moreover, the order mentions that ICICI bank appointed recovery agents in 2013 to visit Singh’s ancestral house and created a scene there to malign his social image. The order also mentions that the recovery agents made derogatory remarks that damaged Singh’s reputation.

Reacting to this, Singh filed a criminal complaint before the metropolitan magistrate of Kanpur Nagar, who summoned the ICICI Bank, that has challenged the summons now.

Allahabad HC demands explanation

“The merits of the matter, this Court directs the Chairman of the ICICI Bank to file a personal affidavit stating as to how, his bank, and the officials of his bank have engaged the recovery agents, in spite of the clear direction of the Hon'ble Supreme Court, not to do so. The officers of the ICICI Bank were very well aware of the fact that they cannot engage any recovery agent, and yet they had engaged the services of recovery agents in the year 2013, which is 6 years after (the) passing of the judgement by the Hon'ble Supreme Court.” stated the order.

The court also asked the chairman to clarify how the civil suit was filed against Singh when the loan amount, along with interest was paid.

“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,” questioned the high court.

The next hearing in the matter is scheduled for July 10.

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