LexICICI BANK versus SHANTI DEVI SHARMA ANO ORS.
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(2008] 8 S.C.R. 973 • . ..,, ICICI BANK A v. SHANTI DEVI SHARMA ANO ORS. (Criminal Appeal No. 900 Of 2008) MAY 15, 2008 B [TARUN CHATTERJEE AND DALVEER BHANDARI, ·~ JJ.] Banks/Banking: Recovery of loans or seizure of vehicles can only be done through legal means- Lenders/Banks not c to resort to use of muscle power for recovery of Joans and per- sistently bothering borrower at odd hours - Securitization and Reconstruction of Financial Assets and Enforcement of Se- curity Interest Act, 2002 - Security Jr;terest (Enforcement) Rules, 2002- RBI Guidelines on Fair Practices Code for Lend- D ers dated 5.5.2003- Guideline (v)(c)- Guidelines on Engage- ments of Recovery Agents dated 24.4.2008. Prosecution case was that snn of respondent com- mitted suicide as a result of harassment and humiliation caused to him by the appellants bank's recovery agents. E The respondent filed a writ petition seeking for directions to the Commissioner of Police to take action against the _... appellant-bank. High Court ordered the Police to file re- ports as to the status of the investigation against the bank. The High Court later reviewed the two status reports that F were filed by the Police. It found them unsatisfactory and accordingly, directed the Investigating Officer to conclude the investigation into the matter as expeditiously as pos- sible and take necessary action against those found guilty of abetting the deceased to commit suicide. In addition, G the High Court stated the proximate cause of death of the deceased that led him to commit suicide was on account of humiliation caused by the Bank people from where loan was taken by him; and the mod1.1s-operandi employed by 973 H 974 SUPREME COURT REPORTS [2008] 8 S.C.R. A the banks for realization of their loan amount and for re- covering the possession of the vehicle against which loans are given was not legal. The appellant bank filed applications for impleadment as well as for clarification/deletion/modification under 8 s.482 Cr.P.C. According to the appellant bank, the obser- vations made by the High Court were unjustified and un- necessary for deciding the case. In an order dated 11.8.2006, the High Court declined c to expunge the impugned observations on the ground that they were made consciously, however clarified th~ matter by stating that any observation made against ap- pellant Bank would not influence or affect the proceed- ings, if any, taken against the said bank or its employees, 0 Appellant-Bank filed the present appeal. Disposing of the appeal, the Court HELD: 1. Reference to the complaint shows that its contents contain allegations and not facts. Moreown·, the investigation· was ongoing. Thus, it should have been E understood that the High Court was referring to alleged facts. The High Court could have been more careful to r note that the facts that it discussed were alleged. Recog- nizing as much, the High court clarified that its observa- .._ tions were not to influence or affect the proceedings. This F Court is reiterating the same. The observations would have no bearing on the ongoing investigation. Given this clarification, it cannot be said that the appellant bank has been substantially aggrieved. Nor expunging the l\'!1- pugned observations would have much of an effect. Un- G der either scenario, having the observations expunged "' or having them clarified, no one can rely on the observa- tions. Nevertheless, it is appropriate to remind financial institutions that they are bound by law. The recovery of loans or seizure of vehicles can only be dona th:ough H legal means. [Paras 8, 9 and 10] [979-A-E] ICICI BANK v. SHANTI DEVI SHARMA 975 AND ORS. • ~ 2. The Securitization and Reconstruction of Finan- A cial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) and the Security Interest (Enforcement) Rules, 2002 (SIER) framed thereunder provide some of the procedures by which security interests may be recov- ered. In addition to SARFAESI and SIER, the Reserve B Bank of India (RBI) has promulgated Guidelines on the subject. The RBI Guidelines on Fair Practices Code for Lenders dated 5.5.2003 provides at (v)(c) that: "In the matter of recovery of loans, the lenders should not resort to undue harassment viz. persistently bothering the bor- c rowers at odd hours, use of muscle power for recovery of loans, etc." A more comprehensive version of these Guidelines was recently rele
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