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

Mr. Alok Sharma had an overdue loan from a Non-Banking Financial Company (NBFC) named “Zenith Finance Corp.” For several years, he was in discussions with the company to foreclose the loan through a settlement. However, the situation took a turn for the worse when the company allegedly leaked his private data to their recovery agents. This data shockingly included the contact numbers from his recent call log, the source of which is unknown to Mr. Sharma. Consequently, these agents began harassing his relatives and other contacts, causing immense distress.

To complicate matters, Zenith Finance Corp. has already initiated legal proceedings against Mr. Sharma by filing a case under Section 138 of the Negotiable Instruments Act, 1881, in the District Court of Rajnagar. Mr. Sharma is now exploring his options. He wonders if he can send a legal notice to the company demanding a zero-cost settlement along with a formal apology for their actions. More importantly, he seeks to understand what legal recourse is available to him against the company for illegally obtaining and sharing his private data, which led to widespread harassment.

Advice in such cases

When you are facing harassment from recovery agents and a breach of your personal data, it is crucial to act systematically and legally.

• Gather all possible evidence of harassment. This includes call recordings, screenshots of text messages or WhatsApp chats, and the phone numbers of the recovery agents.
• Document every instance of harassment, noting the date, time, and nature of the communication.
• File a formal complaint with the Reserve Bank of India (RBI) Ombudsman against the NBFC for violating RBI’s guidelines on recovery practices.
• Send a well-drafted legal notice to the NBFC, detailing the harassment and data leak, and state your demands clearly.
• File a police complaint (FIR) against the recovery agents and the management of the NBFC for criminal intimidation, extortion, and data theft.
• Consult with a Lawyer: The very basic and important step to start is to talk to a 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 an 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

Several Indian laws can be invoked in such a scenario. With the recent overhaul of criminal laws, it’s important to be aware of the new provisions:

• Bharatiya Nyaya Sanhita, 2023 (BNS): Replaces the Indian Penal Code (IPC).
  • Section 314 (Criminal Intimidation): If agents threaten you or your family with injury to person, reputation, or property.
  • Section 351 (Extortion): Forcing someone to deliver any property or valuable security through threats.
  • Section 356 (Defamation): Harming a person’s reputation by communicating false information to third parties (like relatives and colleagues).
• Information Technology Act, 2000:
  • Section 66C: Punishment for identity theft.
  • Section 72A: Punishment for disclosure of information in breach of a lawful contract. This is directly applicable to the NBFC leaking your data.
• Digital Personal Data Protection Act, 2023 (DPDPA): This act imposes heavy penalties on entities for breaching personal data. You can file a complaint with the Data Protection Board of India once it is fully functional.
• Negotiable Instruments Act, 1881:
  • Section 138: This is the case the company has filed against you for the dishonour of a cheque, likely one given for an EMI payment. You must defend this case legally.

If you are the complainant

As the borrower being harassed (the complainant in the harassment case), you should take the following steps:

• Immediately document all instances of data leakage and harassment. Note down which relatives were called and what was said.
• File a First Information Report (FIR) at your local police station against the recovery agents and the senior management of Zenith Finance Corp. for the offenses mentioned above.
• Simultaneously, you must legally defend the Section 138 case filed against you. Do not ignore the court summons. Your lawyer can argue that the company’s illegal actions should be considered by the court.
• Sending a legal notice demanding a zero-cost settlement is a strategic move, but its success depends on the strength of your evidence against the company. It can be a powerful tool for negotiation.
• Consult with a Lawyer: The very basic and important step to start is to talk to a 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 an 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

If you are a relative, friend, or colleague who is being harassed by recovery agents regarding someone else’s loan, you are also a victim. Here is what you can do:

• Inform the borrower immediately about the calls and messages you are receiving.
• You have the right to file your own police complaint against the recovery agents for harassment and intimidation.
• Clearly state to the agents that you are not the borrower and that they should not contact you again. Inform them that you will be taking legal action if they persist.
• Block the numbers from which you are receiving harassing calls and messages.
• Consult with a Lawyer: The very basic and important step to start is to talk to a 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 an 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.

How the police behave in such cases

The police response can vary. Initially, they might treat it as a civil dispute related to a loan. However, you must emphasize that your complaint is about criminal acts—harassment, intimidation, extortion, and data theft—which are cognizable offenses. If the police refuse to file an FIR, you can send a written complaint to the Superintendent of Police (SP). If that fails, you can file a private complaint before the Magistrate under Section 200 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).

FAQs people normally have

Can I sue the NBFC for mental agony and harassment?
Yes, you can file a civil suit for damages against the NBFC, seeking compensation for the mental trauma, agony, and loss of reputation caused by their illegal recovery tactics and data breach.

Is it possible to get a zero-cost settlement?
While demanding a zero-cost settlement is an aggressive negotiating stance, achieving it is difficult as you still have a loan liability. However, the evidence of harassment and data theft can provide you with significant leverage to negotiate a much better settlement amount, potentially with a waiver of interest and penalties, along with an apology.

Can recovery agents contact my relatives?
No. RBI guidelines strictly prohibit recovery agents from harassing or intimidating borrowers or their families. Contacting third parties like relatives to shame or pressure the borrower is illegal.

What evidence is required?

Strong evidence is the backbone of your case. You will need:

• Call recordings of threatening conversations with recovery agents.
• Screenshots of all abusive or threatening messages.
• The phone numbers used by the agents.
• Your loan agreement and any correspondence with the NBFC.
• Witness statements from relatives or colleagues who were harassed.
• A copy of your complaint filed with the RBI Ombudsman.
• A copy of the police complaint or FIR.

How long will the investigation take?

The timeline for legal proceedings in India can be lengthy. A police investigation can take a few months, and the subsequent court case can take several years. However, the initiation of criminal proceedings against the company and its agents often puts immense pressure on them to settle the matter amicably and quickly. Your lawyer can also pursue interim relief from the court to stop the harassment while the case is pending.

Advocate Sudhir Rao, Supreme Court of India