WP/5828/2007 of B.V.S.P.Choudary,President All India credit card Vs The Station House Officer, Mahankali Police Station on 27 December 2007

THE HON’BLE SRI JUSTICE A. GOPAL REDDYANDTHE HON’BLE SRI JUSTICE G. BHAVANI PRASAD

TAKEN UP WRIT PETITION NO.5828 OF 2007

Date: 27.12.2007

Between:

B.S.V.S.P. Choudary, President, All IndiaCredit Card Association, A.P. Unit,112, C Block , Prashanti Towenrs, Musheerabad,Hyderabad.. … Petitioner

And

The Station House Officer,Mahankali Police Station, … Respondents.Secunderabad & another ORAL ORDER:(per A. Gopal Reddy, J)

The telegram dated 16.3.2007 sent by one Sri B.V.S.P. Choudary, claiming himself to be the president of All India Credit Card Members Association, A.P. Unit,Hydrabad to the Hon’ble the Chief Justice of this Court complaining that therecovery gundas/representatives of HDFC Bank have illegally detained Prof. C.L.N.Murthy, Scientist, IICT, Uppal, Hyderabad and that the Station House Officers ofMahankali Police Station and Chikkadapalli Police Station have illegally acted inthat regard, was taken up as Writ Petition.

The petitioner has sent two telegrams on 16.3.2007. The contents of thetelegrams are that the petitioner has received a phone call from Prof. C.L.N. Murthy,Scientist at IICT Uppal stating that some recovery gundas/representatives of HDFCBank followed him from his residence and forcibly kidnapped him and to rescuehim, that recovery gundas had brought C.L.N.Murthy to Mahankali Police Station,that on his (petitioner) telephoning to the police service, he was asked to contact theMahankali P.S, that he went to Mahankali Police Station and met C.L.N. Murthy torescue him from the clutches of police, that Sri P. Narayana, the Circle Inspector ofPolice, Mahankali Police Station colluded with the HDFC recovery gundas andforced him to sign on blank and written papers, that when he enquired the C.I. ofPolice, Mahankali P.S, he abused him in filthy language and threatened him bytaking out his service revolver stating that he will encounter him and nobody can doanything as he is co-brother of Minister Marappa and pushed him out of the policestation, that after half an hour, he received a call from Murthy stating that he hasbeen taken to Chikkadapalli Police and he does not know the whereabouts ofMurthy and, therefore, prayed to take suitable action against the concerned and toprotect the life of the alleged detenu and his family members.

In response to the Rule Nisi, Sri M. Narayana, Inspector of Police, MahankaliPolice Station filed a counter-affidavit denying the allegations that Sri C.L.N. Murthywas kidnapped by the recovery gundas of HDFC bank and handed over him andalso the police forcing the petitioner as well as the scientist to sign on blank papersand he colluding with the recovery gundas of HDFC bank and threatening thepetitioner to kill in an encounter by pointing out his service revolver. It is furtheraverred that no case whatsoever was registered at their Police Station against thebank authorities by Sri C.L.N. Murthy nor the HDFC bank authorities approachedthe police to lodge a complaint against Sri C.L.N. Murthy. Sri C.L.N. Murthy himselfapproached the police station and orally stated that he has to pay some dues to theHDFC bank and for recovery of the same, the bank authorities are harassing himand requested to take necessary action. As the alleged offence falls within thelimits of Chikkdapally Police Station, Sri C.L.N. Murthy was advised to approach the 2[nd] respondent for taking necessary action and accordingly on the complaint of SriMurthy, a case was registered against the HDFC bank authorities and investigatedinto.

The Sub-Inspector of Police, Mahankali Police Station, Secunderabad alsofiled a counter stating that a case in Cr.No.148 of 2007 under sections 448, 384,342, 323 and 506 IP.C was registered on the file of Chikkadapally Police Stationand the same is ending investigation.

The learned Government Pleader for Home submitted that the police aftercompletion of the investigation into the case laid charge sheet against the personsaccused in the crime before the competent Magistrate having jurisdiction over thematter.

Sri Nalin Kumar, learned counsel appearing for the impleaded respondentNo.7 - Reserve Bank India, submitted that on coming to know of the harassmentbeing meted out to credit card holders of various banks at the hands of therepresentatives employed by the banks, necessary guidelines have been issued bythe Reserve Bank of India to be followed by the banks issuing credit credits for therecovery of the amounts due from the card holders and advised all the commercialbanks which are issuing credit cards not to use criminal force for recovery of theamounts due.

We have carefully examined the matter. The telegrams sent by the petitionerto this Court complaining harassment by the recovery agents/representatives ofHDFC Bank for recovery of amounts due under the credit cards is not the solitaryinstance that has come to light in recent times. It is often noticed in the newspapersthat the commercial banks issuing credit cards are engaging recoveryagents/representatives for recovery of dues from the credit card holders and therecovery agents/representatives of the banks are using criminal force for recovery ofthe amounts due from the credit card holders and causing annoyance to the cardholders.

Recovery of any amounts due from the customers of the banks should be bya method known to law or a fair practice of debt collection, which has the approvalof the Reserve Bank of India, which enjoins the over all supervisory and monitoringpower over all the banks in the country. Taking notice of the criticism about theillegal methods being adopted by certain banks issuing credit cards for the recoveryof debts due under the credit cards, it appears that the Reserve Bank of India issuedcertain guidelines to be adopted by all commercial banks issuing credit cards and which are employing recovery agents for collection of dues. It was categoricallyobserved in the guidelines that the banks or the recovery agents should not resort tointimidation or harassment of any kind, either verbal or physical, against any personin their debt collection efforts, including acts intended to humiliate publicly or intrudethe privacy of the credit card holders’ family members, referees and friends, makingthreatening and anonymous calls or making false and misleading representations. Therefore, the banks or the recovery agents employed by them have to scrupulouslyfollow the guidelines issued by the Reserve Bank of India in the matter from time totime and they cannot resort to the activities of using criminal force against the cardholders for recovery of the amounts due. If any such criminal force or harassment ismade by the banks or the recovery agents employed by them for due recovery of theamounts due under the credit cards, the affected card holders will have a right totake recourse to law by lodging a complaint with the police or can move thecompetent Criminal Court having jurisdiction by filing a complaint as required underSections 190 and 200 of the Code of Criminal Procedure. Whenever suchcomplaints are lodged by credit card holders suffered at the hands of thegundas/recovery agents employed by the banks for recovery of the amounts due tothe banks under the credit cards, the concerned police shall register the complaintand after due investigation file necessary reports before the competent court havingjurisdiction over the matter.

In view of the fact that the Reserve Bank of India has already taken correctivemeasures by issuing guidelines to the commercial banks to curb the illegal activitiesbeing adopted by the banks or the recovery agents in the matter of collection ofdues from the credit card holders, and since a complaint has already beenregistered in the instant case against the persons concerned, no further adjudicationis necessary on the telegrams sent by the petitioner.

With the above directions, the Writ Petition is closed.

The 5[th] respondent i.e. Director General of Police, Hyderabad, on receipt of acopy of this order, shall communicate a copy of the order of this Court to all theSuperintendents of Police in the State for information and guidance of the StationHouse Officers working under their respective control in the Districts.

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A. GOPAL REDDY, J

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27[th] December, 2007 G. BHAVANI PRASAD, J

LR copy to be marked: Yes/No

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