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

Mr. Ajay Verma, a resident of the bustling city of Vikasnagar, found himself in a difficult financial situation. Due to an unexpected medical emergency in his family, he had defaulted on a personal loan taken from a Non-Banking Financial Company (NBFC) called ‘InstaCredit Solutions’. For the past few weeks, he had been receiving incessant calls from their recovery agents at all hours of the day and night. The agents used abusive language, threatened him with dire consequences, and even started contacting his colleagues and relatives, causing him immense mental anguish and social embarrassment. Feeling cornered and helpless, Mr. Verma was unsure of his rights and how to stop this harassment legally.

Advice in such cases

• Record all calls from recovery agents as evidence. If they visit in person, try to record the interaction on your phone.
• Keep a detailed log of all communication, including dates, times, agent names (if they provide them), and the nature of the conversation.
• Do not share sensitive personal information like your Aadhaar or PAN details over the phone with unverified agents.
• Communicate with the bank or NBFC in writing (via email) about your financial situation and your intention to settle the loan. This creates a formal record.
• Never give in to threats or make payments to personal accounts of recovery agents. All payments should be made directly to the financial institution.
• 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 resolved much faster than you think

Applicable Sections of Law

The actions of recovery agents often fall foul of several provisions of Indian law. While defaulting on a loan is a civil matter, the use of threats and harassment is a criminal offence. The Reserve Bank of India (RBI) has also laid down strict guidelines for recovery practices, which are often violated. The relevant sections under the new Bharatiya Nyaya Sanhita (BNS) are:

• Section 325 of the Bharatiya Nyaya Sanhita, 2023 (BNS): This section deals with extortion. If an agent threatens to cause harm to you, your reputation, or your property to compel you to pay, it can be considered extortion.
• Section 351 of the Bharatiya Nyaya Sanhita, 2023 (BNS): This covers criminal intimidation. Threatening a person with injury to their person, reputation, or property constitutes a criminal offence under this section.
• Section 356 of the Bharatiya Nyaya Sanhita, 2023 (BNS): This section addresses defamation. If agents spread false information about your loan default to your neighbours, colleagues, or family to shame you, it can amount to defamation.

If you are the complainant

If you are being harassed by recovery agents, you are the complainant in this situation. You have the right to initiate legal proceedings against them and the financial institution they represent.

• Your first step should be to file a formal complaint with the bank or NBFC, detailing the harassment you have faced.
• If the institution does not take appropriate action, you can escalate the matter by filing a complaint with the RBI’s Banking Ombudsman.
• Simultaneously, you can file a police complaint (FIR) at your local police station under the relevant sections of the BNS.
• You can also send a legal notice to the bank and the recovery agency through a lawyer, demanding they cease the illegal recovery tactics.
• 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 resolved much faster than you think

If you are the victim

As the victim of harassment, your priority is to protect yourself and your family from further distress while addressing the underlying financial issue.

• Do not engage in arguments or get provoked by the agents. Remain calm and state clearly that you will only communicate through official channels.
• Inform your family and employer about the situation so they are not caught off guard or manipulated by the agents.
• Block the numbers from which you are receiving abusive calls after documenting them.
• Focus on gathering evidence. Save all threatening messages, emails, and call recordings.
• Seek legal counsel immediately to understand your options for both stopping the harassment and negotiating a settlement for the loan.

How the police behave in such cases

Initially, the police may be hesitant to register an FIR, often viewing it as a civil dispute between a borrower and a lender. They might suggest you settle the matter with the bank. However, you must insist that the harassment, threats, and abuse constitute criminal offences. Present your evidence clearly and explain how the agents’ actions violate the law (e.g., criminal intimidation, extortion). If the local police refuse to register an FIR, you can approach a senior police officer (like the Superintendent of Police) or file a private complaint before a Magistrate under Section 175(3) of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023.

FAQs people normally have

What evidence is required?

Strong evidence is crucial to building a case against recovery agents. The following are highly valuable:

• Audio recordings of threatening or abusive phone calls.
• Screenshots of abusive text messages, WhatsApp chats, or emails.
• CCTV footage if agents visit your home or workplace and behave aggressively.
• Contact details and call logs of the agents.
• Statements from witnesses (family members, colleagues, or neighbours) who have been contacted or have witnessed the harassment.
• Copies of all written correspondence with the bank or NBFC.

How long will the investigation take?

The duration of a police investigation can vary significantly. After an FIR is registered, the police are required to investigate the matter. This can take anywhere from a few weeks to several months, depending on the complexity of the case, the evidence available, and the workload of the investigating officers. Your lawyer can follow up with the police to ensure the investigation proceeds in a timely manner. Filing a complaint with the RBI Ombudsman often yields faster results for stopping the harassment, even as the criminal investigation continues.

Advocate Sudhir Rao, Supreme Court of India