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ICICI fined Rs 55 lakh for using goons on customer

CNN-IBN
Nov 06, 2007 at 08:56am IST

New Delhi: Days after the Reserve Bank of India sent out a strict warning to banks to stop using recovery agents with strong arm tactics to recover loans, the State Consumer Disputes Redressal Commission of Delhi has fined the ICICI Bank a whopping Rs 55 lakh for employing 'goons' to recover loan from a customer.

Deploring the practice of the banks intimidating consumers to pay the installments, the consumer court held ICICI Bank guilty of using goons to harass a consumer, Tapan Bose, and his friend's son Vinod Chowdhary.

Vinod had to be admitted to hospital after the recovery agents mercilessly beat him up while they snatched a loaned car from him in January this year. The incident occurred when Vinod was driving Bose's car, which was bought on a car loan from the ICICI Bank.

While passing the order, the court warned all banks against using musclemen for loan recovery and asked the Delhi police commissioner to instruct all SHOs to register FIRs against such complaints.

The commission deprecated the 'audacity and impunity' with which the banks have been effecting forcible possession of vehicles. "No civilised society governed by rule of law can brook such kind of conduct," the Commission's President Justice JD Kapoor said.

He also described the violent methods adopted by the recovery agents as a serious violation of 'human rights'. Holding the ICICI Bank guilty of 'unfair trade practice', the commission termed such miscreants as 'yahoos' and said they are boorish and a brutal lout, who care a fig for legal and judicial authorities, including the Supreme Court.

While taking to task the leading bank, it vented its anger on the ICICI for flouting the apex court's direction that restrained all the financial institutions from employing musclemen to recover a loan amount or possession of a vehicle.

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The commission, also comprising member Rumnita Mittal, issued notices to the Collection Manager of ICICI and the CEO of the recovery agency, seeking their explanations for the blatant violation of the direction of the highest court of the nation.

ICICI, however, refused to own up the act, contending that the agents were employed separately by the recovery agency and it could not be held culpable for any such act as it had asked the agency to conduct themselves in accordance with the law.

Quashing the bank's argument, the commission said: "For every illegal acts of the collection agency, the bank is directly liable."

The court also ruled that the consumer had no concern with the internal agreement between the bank and any other agency and

they could not be made to pay the price for it.

It termed the musclemen as 'robbers and hardened criminals', who beat up a consumer for recovering a few thousand rupees, snatch the key of a vehicle and take it away little realising the urgency or the emergency of the person.

"They insult everyone, humiliate the inmates and create scene. They have driven people to commit suicide for a few thousands," the commission said.

It maintained that there was a civil legal remedy for recovering loans and employing goons for this was a beyond the parameter of the law.

(With PTI inputs)

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