Dismissing a plea by ICICI Bank, the court refused to delete the Delhi High Court’s remarks that held the bank and its musclemen responsible for abetting a youth to commit suicide by humiliating him and taking away his motorcycle financed by the country’s largest private sector bank. It also asked ICICI Bank to to pay Rs 25,000 as cost of this litigation to the respondents within three weeks and directed the Delhi Police to conclude the investigation against the bank expeditiously within three months, keeping in view the gravity of the allegations. The court also directed the concerned deputy commissioner of police to submit the investigation report in the Delhi High Court.

According to the apex court, complaints received by the Reserve Bank of India (RBI) regarding violation of guidelines and adoption of abusive practices by banks’ recovery agents would be viewed seriously. Reiterating the RBI Guidelines on Engagement of Recovery Agents, the court said, “The Reserve Bank of India (RBI) may consider imposing a ban on a bank from engaging recovery agents in a particular area, either jurisdictional or functional, for a limited period. In case of persistent breach of the above guidelines, the RBI may consider extending the period of ban or the area of ban.”

“The RBI had expressed its concern about the number of litigations filed against the banks in the recent past for engaging recovery agents who have purportedly violated the law,” Justice Bhandari, writing the verdict for the bench, stated. In a letter accompanying its April 24, 2008, Guidelines, the RBI had stated that it might consider imposing a ban on a bank from engaging recovery agents in a particular area, either jurisdictional or functional, for a limited period.

ICICI Bank had moved the apex court seeking deletion of some paragraphs in the High Court order which had said that “...the proximate cause of death of the deceased that led him to commit suicide was on account of humiliation caused by the Bank people from where loan was taken by him”. The High Court had observed, “The modus operandi employed by banks like ICICI for realisation of their loan amount and for recovering the possession of the vehicle against which loans are given is extra-legal and by no stretch of imagination can they be permitted to employ musclemen and goons for recovery of their dues even from a defaulting party.”

The High Court order had come on a petition filed by Shanti Devi Sharma, the deceased’s mother, seeking a probe against ICICI Bank and its staff for the unlawful action, which led to the suicide of her 34-year old son Himanshu Dev Sharma. Sharma had committed suicide in October 2005 by hanging himself at his house after he was allegedly intimidated and humiliated in front of his neighbours and family by recovery agents employed by the bank for recovering the loan amount taken for his motorcycle.

ICICI Bank had contended that it was within its rights to recover loans and had followed the required procedure for recovering dues.