The Allahabad High Court has, in a recent order, summoned the chairman of ICICI Bank to personally explain the involvement of bank officials with recovery agents in a loan case, despite a Supreme Court order prohibiting such actions.
While hearing a petition by Jasminder Chahal and three others, all employees of ICICI, Justice Prashant Kumar pointed out, “The officers of the ICICI Bank were very well aware of the fact that they cannot engage any recovery agent, and yet they engaged the services of recovery agents in the year 2013, which is six years after passing of the judgment by the Supreme Court”.
The Supreme Court precedent in the case of ICICI Bank Ltd. Vs. Prakash Kaur (2007) categorically ordered banks to desist from engaging recovery agents for recovering loans, and instead, asked them to pursue legal remedies.
Since the ICICI chairman was not a respondent in the Section 482 petition, the court allowed the applicants to implead him as a respondent.
The applicants' case is based on a loan taken by Rahul Singh, who claimed that despite settling the entire amount, ICICI showed him as a defaulter, hence blocking all future financial assistance to him and affecting his business venture.
Furthermore, Singh claimed that ICICI filed a civil suit against him in Kanpur Nagar, which engaged recovery agents who allegedly used derogatory language and defamed him in society.
Against the actions, Singh filed a criminal complaint in the Kanpur Nagar court, which summoned ICICI officials.
The ICICI applicants moved the high court praying for quashing of the proceedings against them.
After hearing both sides, the court ordered the chairman of the ICICI to explain why a civil suit was filed against Rahul Singh, especially after the full and final settlement of the loan, and why recovery agents were engaged by the bank despite the Supreme Court prohibition order.
The court order, dated May 15, also schedules the next hearing for July 10, 2024, indicating that legal scrutiny of the matter would continue.
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