ICICI Bank continues to employ the same procedure even after the Supreme Court of India has passed severe strictures against it.
In a recent case, Mr. Sandip Narayan Pagde approached us with a complaint against ICICI Bank. He had taken a Maruti Omni on a 5 year loan from ICICI. His installment was 4800/- which he has been paying till February 2008. With just 11 installments remaining balance, Mr. Pagde's vehicle was re-possessed by ICICI Bank because he had fallen behind in making 4 payments. He offered to make those payments but in his absence, ICICI recovery agents took away the vehicle by misleading his wife. They told her that Mr Pagde had just to pay 4 installments and then the vehicle could be his without making any further payment.
This is a very standard technique used by these recovery agents, they lure you with a false promise and a lucrative deal. In fact all they promise is false to start with.
In this case, when Mr Sandip approached the bank for taking back his vehicle, he was informed that the vehicle has already been sold for 70,000/-. This sale had taken place without the consent of the owner and in clear violation of Supreme Court guidelines in all such cases.
We are sure people in the recovery department, including one Mr. Dinesh Singh, who sits at the infamous RPG Tower, JB Nagar Branch of ICICI bank made a pot of money at the expense of the poor vehicle owner.
Their modus-operandi is simple. They will pick up a vehicle where there is even a small default. Then they will sell the vehicle to an agent of their choice by taking some money officially and a lot of money un-officially. All the people in the recovery departments of these banks including ICICI, HDFC, HSBC, CitiBank, etc are following the same practice.
Read Supreme Court Judgment below
"Banks cannot employ goondas to recover loans"
Feb 27, 2007
NEW DELHI: The Supreme Court on Monday deprecated the procedure adopted by commercial banks of employing musclemen as agents to recover the outstanding loan amount from defaulters.
A Bench of Justices A.R. Lakshmanan and Altamas Kabir, in separate but concurring judgments, said: "We are governed by a rule of law in the country. The recovery of loans or seizures of vehicles could be done only through legal means. The banks cannot employ goondas to take possession by force."
The Bench was disposing of an appeal filed by the ICICI Bank against an order passed by the Allahabad High Court rejecting its plea to quash the criminal cases registered by the U.P. Government against the Managing Director and top officials for using criminal force against a loan defaulter.
The case was registered at the instance of the High Court on a complaint from Prakash Kaur, a 75-year-old widow, that the bank had sent musclemen to seize the vehicle for non-payment of one instalment of loan.
Mr. Justice Lakshmanan said: "Once the credit card or loan is taken and there appears a default, then the witch-hunt begins. Now the bank is the aggressor and the public is the victim. The first step to recover the money due is through the so-called recovery/collection agents. A very dignified term used for paid recovery agents who are individual and independent contractors hired by the banks to trace the defaulters and to both physically, mentally and emotionally torture and force them into submitting their dues."
He said: "A man's self-respect, stature in society are all immaterial to the agent who is only primed at recovery. This is the modernised version of Shylock's pound of flesh. No explanation is given regarding the interest charge and the bank takes cover under the guise of the holder of the card or loan having signed the agreement whose fine print is never read or explained to the owner."
The Judge said: "It is mandatory that the banks be held vicariously liable for such acts of agents..."