TMI Blog2007 (2) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... f, Tejas Karia and Ms. Misha for the Appellant. Manjeet Chawla and Javed Mahmud Rao for the Respondent. JUDGMENT Dr. AR. Lakshmanan, J. - I had the privilege of perusing the judgment proposed by my learned brother Hon ble Mr. Justice Altamas Kabir. While respectfully concurring with the conclusion arrived by the learned Judge, I would like to add the following few paragraphs: (1) Regarding the role of recovery agents; use of abusive language ; due process of law; RBI guidelines. Factors u The issue of banks employing alternate means of recovery other than by due process of law, i.e., either through Courts, Tribunals, Adalats or Commissions is an issue that has to be viewed from two angles : (1) from the angle of the common man; and (2) from the angle of the bank. Reasons : u First of all, the entrance of the multi-national banks into the country has spread the culture of credit cards, loans on an unimaginable level where rather than the rich, it is the middle class, the lower middle class and the lower class who are at the receiving end of the bonanzas promised by the banks. u Inadequate information on the credit card application, loan applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gain, the banks escape liability since these agents are not salaried employees of the bank and hence not directly liable for anything. u Taking it from the angle of the common man the inflow of software money and high salaries has resulted in uncontrolled expenditure. Rather than utility it is a fashion to carry a card for it makes a statement depending on the type of card one carries. u To maintain ones image one pays the price of utilizing the card without realizing that even a single day s delay in payment results in more than 100 to 200 rupees being charged as default and penalty charges, which if accumulates over a month, results in the charges exceeding the actual payment due. u As for loans, when litigation is commenced by the customer against the bank or an institution, then they refuse to divulge the true statement of account stating that it will be produced in court. This gives ample scope for manipulation. Suggestions u Chronic defaulters should mean a default of a maximum of three months if intermittent payments have been made. u It is mandatory that the banks be held vicariously liable for such acts of agents. These agents have to be identified as registe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Unless we have an effective supervisory system the abuse will continue. Suggestion 3. Most of the non-banking financial institutions adopt the arbitration route for the purpose of getting a Commissioner of the court appointed for seizing the vehicles. The most important aspect would be a broad guideline for fixing the targets, whether they be for lending or for recovery. This would result in a proper balance between the extreme differences of working conditions between the multinational commercial banks and nationalized and non-nationalized banks who are doing the very same credit business with dignity. (3) Agency systems to be abolished Factors 4. Though there are voices raised stating that the agency system should be abolished, this has to be examined from the view of the bank for whom this system has proved to be extremely productive in view of chronic and regular defaulters and customers who have a premeditated intention of cheating the bank. Such people are identified easily by the agents and produced physically before the bank who resort to all means including the local police help to force such customers to repay their dues. Reason 5. The delay in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of time, then strictures ought to be imposed on such digressing banks to curb their high handed activities and to make them answerable to the general public. u Only this would reinstate the confidence of the masses in the banking system already burdened with the population of over 60 years of age having lost tremendously on the lowering of the interest rates. u The banking procedures should be people friendly, at the same time, strict in its enforcement and educative enough to guide the public on the benefits of prudent banking and savings and at the same time, enlighten them on the pitfalls of borrowing or taking credit from institutions for various purposes, way beyond their means. Conclusion 6. On an overall assessment of the system presently existing in India, the multinational banks score over the nationalized banks in terms of connectivity and ease in functioning, since they are highly automated and efficient. The staff too is well-trained and well-paid also. The disadvantage here is that the more the pay, the greater the pressure. Every facility is provided but work is extracted to the maximum irrespective of the age or personal circumstances. In a nationalized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays co-related with reference to its growth, its assets utilization and finally profit in the balance sheet, that and that alone cannot be relied upon, with reference to a country like India, where there is enormous disparity in respect of various sections of the society. These are all positive steps that would bring in the overall balance in the working of all these institutions. 12. Whether it is a bank, which concentrate on higher segment of banking or it is a bank which concentrate upon middle class, lower middle class and such other segment of the Indian public who look to and requires the banking comfort, it is not mere question of lending the money that matters, but also the consequences thereafter. The social responsibility is larger than the banks profit and growth ratio alone. 13. Keeping in mind the social responsibility, it is absolutely necessary to appoint a special committee who will look into the disparity in working conditions, at least up to the managerial level and make such recommendations to the RBI and Union of India for all remedial actions. 14. In conclusion, we say that we are governed by a rule of law in the country. The recovery of loans or se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner by advancing the loan for purchase of the truck and, accordingly, wrote to the police authorities on 3-9-2006 requesting them to register the first information report of the alleged offences punishable under sections 120B, 400, 403, 406, 409, 417, 418, 419, 420, 421, 422, 424, 466, 467, 468, 469, 571 and 511 IPC. It was also urged that since no steps had been taken by the police authorities on the basis of application dated 3/4-9-2006, the respondent Nos. 1, 2, 5, 6, 7 and 8 being the Union of India and other officers of the U.P. Police, had committed offences punishable under sections 166, 167, 212, 217, 218, 221, 120B IPC and section 13 of the Prevention of Corruption Act. 20. On the basis of the aforesaid allegations, the writ petitioner, inter alia, prayed for a direction upon the respondent Nos. 1, 2, 4, 5, 6, 7 and 8 to register a First Information Report (FIR) in Civil Lines Police Station, Allahabad, against the respondent Nos. 9 to 13 and, during the period of investigation, to save the losses of the writ petitioner by recovering the truck along with all the documents relating to the truck and to hand over the same to the writ petitioner. The writ petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. However, while make his submissions, Mr. Salve also conveyed the bank s willingness to compromise the matter by foregoing the interest which was payable on the outstanding dues which amounted to Rs. 1,62,917. Mr. Salve also submitted that in the event the writ petitioner had any doubts regarding the payments made by her and credited to her account, she could sit with the officers of the bank along with her agent and verify the accounts and in the event it was found that any payment made by her had not been credited to her account, she would be entitled to receive credited for the same. 24. Mr. Salve submitted that if the writ petitioner paid an initial sum of Rs. 50,000 (rupees fifty thousand) only, the truck could be returned to her upon final accounting the balance principal amount found payable by her could be paid off in suitable instalments. 25. On behalf of the writ petitioner/respondent, it was contended that the amount said to be due towards principal was highly inflated since according to the writ petitioner she had defaulted in making payment of the only one instalment. 26. Be that as it may, we are inclined to accept Mr. Salve s suggestion and we accordin ..... 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