If you are stuck in such a situation, here is what to do.

Mr. Alok, a respected businessman in the city of Chandpur, found his life upended by a severe financial crisis. His enterprise suffered staggering losses due to a sudden market downturn, non-payment from clients, and a significant robbery at his premises. To keep his business afloat, he had taken substantial loans from several banks and also borrowed money from friends and relatives. Unbeknownst to his family, the weight of this debt became unbearable.

In a moment of extreme despair, Mr. Alok attempted to take his own life. Miraculously, he survived, but the incident brought the family’s dire financial situation to light. His wife and 21-year-old son, Sameer, were left completely shattered. Upon Mr. Alok’s recovery, the family made the difficult decision to start over. They sold all their properties and assets, paid off the pressing debts to relatives, and moved to a new city, Navgarh, hoping for a fresh start.

Now, they find themselves with no money to repay the outstanding bank loans. Their survival depends on the small amount of financial help sent by an uncle. The situation took a turn for the worse when a bank’s recovery agent called Sameer and used abusive and threatening language against his father. The family is now trapped between the struggle for daily survival and the fear of repercussions from the banks, unsure about their legal liabilities and what the future holds.

Advice in such cases

In such a distressing situation, it is crucial to prioritize your actions. Your family’s immediate survival and mental well-being are paramount. While the financial obligations are serious, they should not overshadow the need for stability and safety. Legally, an adult son is generally not personally liable for his father’s individual debts unless he was a co-applicant or a guarantor on the loan. The liability for any inherited property is typically limited to the value of that asset. Hiding from the banks is not a viable long-term strategy, as they have mechanisms to trace defaulters. It is often better to communicate your financial inability to the bank in writing, which creates a formal record of your situation.

Applicable Sections of Law

The actions of recovery agents are regulated, and you have legal protections against harassment.

• Reserve Bank of India (RBI) Guidelines: The RBI has issued a Fair Practices Code for Lenders, which strictly prohibits banks and their recovery agents from using intimidation, harassment, or abusive language. Agents cannot contact you at odd hours or resort to public humiliation.
• Bharatiya Nyaya Sanhita, 2023 (BNS): If a recovery agent threatens or harasses you, their actions may constitute a criminal offense. You can file a police complaint under relevant sections, such as Section 351 for Criminal Intimidation.
• SARFAESI Act, 2002: If the loans are secured by property, the bank must follow the due legal process established under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act. They cannot forcibly take possession of assets without following these procedures.

If you are the complainant

When you are facing harassment from recovery agents, you are the complainant and have the right to take action.

• First, file a formal complaint with the bank’s internal grievance redressal officer, detailing the agent’s misconduct and citing the RBI’s Fair Practices Code.
• If the bank fails to act within 30 days, you can escalate the matter to the Banking Ombudsman.
• Simultaneously, you can file a police complaint (FIR) against the recovery agent for criminal intimidation and harassment under the BNS.
• Preserve all evidence, such as call recordings, text messages, or emails, to support your complaint.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A Good lawyer can get the issues resolve in 7-10 days.

If you are the victim

As the victim of such harassment, your immediate response is critical for your protection.

• Do not get into heated arguments with the recovery agents. Remain calm but firm.
• Clearly state that you are aware of your rights and that their harassing conduct is illegal.
• Insist that all future communication from the bank or its agents be made in writing via email or post. This creates a paper trail.
• Document every single instance of harassment. Maintain a log with the date, time, agent’s name, and a summary of the conversation.
• Focus on your family’s well-being. The legal battle can be draining, so ensure your immediate needs for food, shelter, and mental peace are met first.

How the police behave in such cases

The police response to complaints against recovery agents can vary. Initially, they might perceive the issue as a civil dispute related to loan default and may be hesitant to file an FIR. However, if you provide clear evidence of criminal behavior, such as threats of violence, extortion, or persistent harassment, they are obligated to register a case under the appropriate sections of the Bharatiya Nyaya Sanhita (BNS). Having a lawyer accompany you or send a legal notice can often compel the police to take the matter more seriously and take necessary action against the erring agents.

FAQs people normally have

What evidence is required?

To build a strong case against harassing recovery agents, you should gather as much evidence as possible. This includes:

• Recordings of abusive or threatening phone calls.
• Screenshots of harassing text messages, WhatsApp chats, or emails.
• A detailed written log of all interactions, including dates, times, and the nature of the harassment.
• Contact information of any witnesses who may have observed the harassment.
• Copies of all written complaints filed with the bank and the Banking Ombudsman.

How long will the investigation take?

The timeline for resolution can vary significantly. An internal investigation by the bank into a complaint against its agent should ideally be completed within 30 days. A police investigation into an FIR can take several weeks to a few months, depending on the complexity and evidence. Legal proceedings in a court of law are typically a much longer process, potentially lasting for years. However, the immediate goal of filing complaints is often to stop the harassment, which can sometimes be achieved quickly once authorities intervene and issue a warning to the agents.

Advocate Sudhir Rao, Supreme Court of India