In a recent ruling, the Supreme Court of India has taken decisive action against a recovery agent firm, describing it as a “group of goons” for its mishandling of a vehicle seizure case. The court has instructed the West Bengal Police to file a charge sheet against the firm within two months, following a complaint from a borrower who faced significant issues with the recovery process.
The Case Background
Debasish Bosu Roy Chowdhury, who had taken a loan of ₹15.15 lakh from Bank of India to purchase a bus for operating in Kolkata, found himself in a dispute after failing to meet his loan obligations. The loan, taken in 2014, was to be repaid in 84 monthly installments. However, Chowdhury defaulted on payments starting January 2018, leading the bank to declare his account a Non-Performing Asset (NPA) by May 31, 2018, with an outstanding balance of ₹10.23 lakh.
The Issue with the Recovery Agent
The Bank of India hired M/s City Investigation and Detective, a recovery agent firm, to seize the bus due to the defaulted payments. The Supreme Court found that the firm’s actions were far from professional. The firm not only failed to return the vehicle promptly but also returned it in a damaged state, with altered chassis and engine numbers. This led Chowdhury to lodge a First Information Report (FIR) against the firm for their negligence and improper handling.
Supreme Court’s Directions
The Supreme Court, in its recent order, has issued several directives:
- Charge Sheet Filing: The West Bengal Police have been ordered to file a charge sheet against the recovery agent firm within two months. The case is to be investigated under Sections 406 (Criminal Breach of Trust), 420 (Cheating), and 471 (Using as Genuine a Forged Document) of the Indian Penal Code (IPC).
- Compensation and Recovery: The court has mandated that the Bank of India should recover the compensation amount paid to Chowdhury from the recovery agent firm or any other party responsible for the vehicle’s damage. Chowdhury had already been granted ₹5 lakh interim compensation by the Calcutta High Court.
- Action Against License: The court also directed that if the recovery agent firm had any valid license or authority to operate, the bank should lodge a separate complaint for the cancellation of that license.
- Legal Proceedings: Once the charge sheet is filed, the trial court will take cognizance of the case and proceed with legal actions accordingly.
The Aftermath
Despite the one-time settlement (OTS) offer of ₹1.8 lakh, which was significantly lower than the outstanding amount, the bank failed to return the bus in a satisfactory condition. The Supreme Court noted that after the OTS payment was made, the bus was recovered with critical damages and alterations, rendering it non-functional.
The Supreme Court’s decision highlights the need for accountability and proper conduct in the recovery process, ensuring that such malpractices are addressed promptly and justice is served to affected parties.
