Recovery Agent Harassment for Someone Else's Loan

One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.

Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.

TL;DR: If you only gave a reference and never signed as a borrower or guarantor, you owe nothing and you commit no offence. The calls are unlawful pressure tactics, and you can get your number removed by putting the lender's grievance officer on written notice, escalating to the RBI Ombudsman if the lender is regulated, and filing a police complaint for criminal intimidation if the calls continue.

A colleague, Nikhil Menon, had put down the client's mobile number as a reference when he took a small instant loan through one of those apps that disburse in minutes. The client agreed to it. No guarantee was signed, no borrower's agreement carried his name, and not a rupee of that money ever reached him.

Then Nikhil stopped paying.

The recovery calls began arriving on the client's phone. Callers who had no dealing with him wanted him to chase Nikhil, and they were not gentle about it. The client rang Nikhil and asked him to get the number deleted from the lender's records. The answer he got was to block the numbers, deny knowing Nikhil, and stop picking up.

Blocking helped for a while. New numbers kept turning up. By then the client had spent weeks handling it himself and had got nowhere. He approached the office of Advocate Sudhir Rao around March 2025.

A complaint was drafted around the calls themselves rather than around the loan. The lending app's grievance officer was put on written notice, the call records were preserved, and the chain from the recovery agency back to the lender was mapped out. Earlier efforts had failed because they treated the whole thing as a nuisance to be ignored. The domain experience of Advocate Sudhir Rao helped secure the outcome the client needed, with his number taken off the recovery list and an undertaking that it would not be contacted again.

Key Facts of the Case

• The client had only given a verbal reference. He was never a co-borrower, co-applicant or guarantor on the loan.
• No loan agreement, sanction letter or guarantee document carried his name or signature.
• The borrower defaulted, and the lender's recovery agents began calling the client for payment.
• The recovery calls continued after the client asked for his number to be removed from the lender's records.
• Blocking individual numbers did not work, because the calls came from a rotating set of numbers.
• The client was never asked to pay any amount by the lender in writing, and no notice was ever served on him.
• The dispute was resolved through written escalation to the lender's grievance officer plus a police complaint, and not through any court trial.
• At no point did any written demand for payment, or any legal notice, reach the client.

Why a reference on someone else's loan creates no liability

A loan is a contract, and only the parties to it owe anything under it. Section 126 of the Indian Contract Act, 1872 defines a contract of guarantee as a contract to perform the promise, or discharge the liability, of a third person in case of his default. That contract needs a promise and a signature. The client gave neither. He passed on a phone number because a colleague asked him to.

What actually makes a person liable for another's loan is narrow and specific:

• Signing as a co-borrower or co-applicant on the loan agreement.
• Signing a guarantee, a deed of guarantee, or a separate letter of comfort that promises payment.
• Giving a written, signed acknowledgment of the debt — this can revive liability and reset limitation periods, which is why words said on recorded calls matter.
• Receiving the money. The client never saw a rupee.

Outside those, the lender has no contractual claim, and the recovery agency has nothing to collect from him. Privity of contract — the rule that only a party to a contract can sue or be sued on it — has a few exceptions in Indian law, mostly around trusts, family arrangements and agency. None of them apply to a phone number written in a form.

On these facts, there may be nothing for the lender to argue. That is worth saying plainly because it changes the strategy: the complaint is not about escaping a debt, it is about stopping unlawful pressure.

Be careful what you say on the calls

Recovery calls are usually recorded by the agency. Saying something like "I'll see what I can do" or "let me talk to him" is not an admission in law, but it is material someone will wave around later. The safest sentence is also the truest one: I am not a party to this loan and I will not discuss it. Then end the call.

Are recovery calls for someone else's loan an offence in India?

They can be, depending on what the caller says. The law looks at the threat, not at the tone.

• Criminal intimidation. Section 351 of the Bharatiya Nyaya Sanhita, 2023 carries forward the old offence of criminal intimidation. The definition covers threats of injury to a person's body, reputation or property. A caller telling you your employer, your neighbours or your family will be told that you are a defaulter is threatening your reputation, and that is squarely inside the section. Punishment can extend to two years in ordinary cases, and to seven years where the threat is of the graver kind the section describes.
• Extortion. Section 308 of the BNS, 2023 deals with extortion — putting a person in fear of injury in order to make him deliver money. If the demand is that you pay a loan you never took, the conduct may fall here as well.
• Defamation. Where the agency actually tells third parties that you are a defaulter, Section 356 of the BNS, 2023, which deals with defamation, may be attracted.

Whether the offence is cognizable or not depends on how the threat is framed, and that affects how much the police can do on their own. It is also why a complaint drafted around specific words — "he said he would call my office" — tends to move faster than one that says "I am getting harassing calls".

Keeping the evidence usable in court

Call recordings you make of your own conversations are generally admissible in India. Where recordings, call logs or screenshots are produced as electronic evidence, the court will ordinarily want a certificate under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023. This is a paperwork point that sinks otherwise good complaints, so keep the original device and the original files, not just forwarded copies.

What the RBI's recovery rules say — and where they stop

If the lender is a bank or a non-banking finance company registered with the Reserve Bank of India, its recovery conduct is governed by the Fair Practices Code and by the RBI's digital lending framework. The working principle in those rules is that recovery contact is with the borrower. Third parties are contacted only in narrow circumstances, generally with prior written consent and generally only to obtain the borrower's contact details — not to be told to chase him.

The route then runs in two steps:

• A written complaint to the lender's grievance redressal officer. Lenders ordinarily have about thirty days to reply.
• If the reply is unsatisfactory or does not come, escalation to the RBI Ombudsman under the Reserve Bank – Integrated Ombudsman Scheme, 2021. Such complaints are ordinarily to be filed within a year.

Here is the honest limit. The Ombudsman scheme is built for customers of the regulated entity. A person who was only a reference may be told the complaint is not maintainable for want of jurisdiction. It varies. And if the app is not an RBI-regulated entity at all — which is common with the smallest instant-loan apps — there is no Ombudsman to go to, and the police complaint is the only real lever.

What to do first — the sequence that works

• Preserve, today. Call logs with numbers and timestamps, recordings, WhatsApp and SMS messages, screenshots. Write down the date, the number, the name the caller gave and the exact words used. Memory is not evidence; a log is.
• Do not block and disappear. Blocking stops one number. It also destroys your proof of how often they called. Keep the data, then block.
• Send one written complaint to the lender's grievance officer, not to the caller. Identify the borrower's loan if you know it, list the dates and numbers, state that you are not a borrower, co-borrower or guarantor, and ask in writing for your number to be deleted and for confirmation that it has been.
• Escalate to the RBI Ombudsman if the lender is regulated and thirty days pass without a proper reply.
• File a police complaint under Section 173 of the Bharatiya Nagarik Suraksha Sanhita, 2023. You can complain where you live or where you received the calls. Carry printed evidence and ask for a receipt or a copy of the complaint.
• If the police refuse to register an FIR, an application can be made to the Magistrate under Section 175(3) of the BNSS, or a complaint can be filed under Section 223 of the BNSS.
• Move quickly. Telecom operators and lenders retain call records for a limited period, commonly about a year. A complaint filed eight months later is weaker than one filed in the first month.

Frequently Asked Questions

What to send the chamber

If you are getting calls on a loan you never took, the first step is not complicated. Send the loan detail if you have it, and if you do not have it, send what you do have.

• Any notice, message or demand you have received, with its date.
• A two-line note on your connection to the borrower — colleague, relative, former employee — and whether you signed anything at all.
• Call logs or screenshots, if you have kept them. If you have not, say so and send whatever remains.

Write to /contact-us or /book, or reach the chamber directly at +91 97295 06771 or me@sudhirrao.com. The office is at Lawyers' Chamber, Chamber No. 86, Supreme Court of India, New Delhi - 110001. Criminal defence, cyber crime and economic offences are the areas handled here; matrimonial and family matters are dealt with by Adv. Jyoti Rao, Bar Council of Delhi D/891/2023.

One thing worth saying before you call. If you signed nothing, you owe nothing, and the calls are the whole problem. That is a smaller fight than most people fear, and it is usually settled with paper rather than in a courtroom.

This article is general information about Indian law and is not legal advice on your own situation. Please consult an advocate with the documents in hand before acting.

Advocate Sudhir Rao, Supreme Court of India