
The Allahabad High Court recently issued a directive to the Chairman of ICICI Bank, requesting a personal explanation regarding the bank’s involvement with recovery agents in a loan case, despite a prohibition on such activities. The case in question is titled “Jasminder Chahal And 3 Others vs State of UP And 2 Others.”
Justice Prashant Kumar also ordered the ICICI Bank Chairman to clarify the circumstances surrounding the filing of a civil suit against a borrower who had already repaid the entire loan amount, including interest. The bank chairman was instructed to submit a personal affidavit. The court emphasized that the chairman should also elaborate on why the bank was still utilizing recovery agents, even though the Supreme Court had clearly prohibited such practices.
The court was hearing a petition filed by Rahul Singh, who had taken a home loan from ICICI Bank’s Noida branch. Singh requested the defamation case against bank officials to be dismissed. Despite fully repaying the loan, Singh’s credit rating with the Credit Information Bureau (India) Limited (CIBIL) still reflected him as a defaulter. Additionally, the bank had filed a civil suit against him.
Singh submitted a written statement along with all the necessary documents to prove that he had repaid the loan in full, including the interest and foreclosure charges, and that his loan account had been closed. The court noted that despite this evidence, the bank continued to label Singh as a defaulter.
Singh, who is an American citizen and holds an Overseas Citizenship of India (OCI) card, informed the court that recovery agents appointed by the bank repeatedly visited his residence and made derogatory remarks about him. Consequently, he filed a defamation case against the bank officials.
Justice Kumar, while considering the petition to dismiss the defamation proceedings, observed that the bank officers deliberately misrepresented Singh as a defaulter, despite knowing that his loan account had been closed.
Referring to a Supreme Court judgment that prohibited the use of recovery agents by bank officials, the court asked the ICICI Bank Chairman to explain why the bank engaged recovery agents in 2013, six years after the Supreme Court’s ruling.
The High Court is scheduled to resume the case on July 10. The applicants were represented by Senior Counsel GS Chaturvedi and advocate Manish Trivedi, while Advocate SK Chandraul represented the State.