A city court has sent out a warning to the senior management of banks and finance companies that hire agents to recover money. The court held that a firm’s managing director and other senior officials cannot escape liability for such unlawful acts.

Additional District Judge (ADJ) Sangeeta Dhingra Sehgal said in a recent judgment that all senior officials can be arraigned as parties in a civil suit if a person claimed damages caused by such recovery agents.

According to the court, since senior officials are responsible for the company’s daily affairs, they will be held jointly liable for activities carried out by the employees of their divisions or sections.

ADJ Sehgal made this observation while recently dismissing an application filed by the managing director, manager (credit card division), principal officer and authorised representative of ICICI Bank. The officers had requested the court to remove their names from a list of parties named in the civil suit filed by advocate Navodaya Gaur.

Accusing the company and its officials of harassing him and his wife, Gaur had claimed compensation from the company and also sought a restraining order from the court against threats being issued to him in the future.

As per Gaur’s petition, following a delay on his part in clearing his ICICI credit card dues, he and his wife started receiving threats over the phone from the company’s recovery agents. He subsequently approached the bank to meet the concerned officials where he was allegedly intimidated and was told to deposit Rs 52,000.

... contd.