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.

Ramesh Kumar visited a Bajaj Auto dealership in Malad, Mumbai, to inquire about purchasing a two-wheeler. During his visit, the finance representative from Mahindra Finance convinced him to share his KYC documents to check loan eligibility. Ramesh provided his Aadhaar, PAN card, and bank account details but decided not to purchase the vehicle due to high EMI amounts. However, the next month, he was shocked to find an EMI of Rs. 8,500 debited from his account. When he contacted the dealership, they initially acknowledged the error but later became unresponsive. The finance company claimed a loan was already processed in his name with forged documents showing his consent and signature.

Advice in Such Cases

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 to 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.

Immediately contact your bank to stop further EMI deductions and mark the transactions as fraudulent. Document everything including your original inquiry, the finance agent’s promises, and any communication thereafter. File a complaint with the RBI Banking Ombudsman within 30 days of receiving the bank’s final response or after 30 days if no response is received.

Applicable Sections of Law

Under the Bharatiya Nyaya Sanhita (BNS), Section 318 deals with cheating and fraudulent documentation, while Section 319 covers cheating by personation. Section 316 addresses criminal breach of trust by financial agents. The Bharatiya Nagarik Suraksha Sanhita (BNSS) Section 173 provides for investigation of economic offences, and Section 35 allows for filing complaints against financial institutions. These provisions collectively address unauthorized loan processing and document forgery by finance companies.

Relevant Legal Precedents

Various High Courts have established that financial institutions cannot process loans without explicit written consent from applicants. The Supreme Court has ruled that sharing KYC documents for eligibility check does not constitute loan application consent. Courts have consistently held that EMI deductions without valid loan agreements constitute criminal breach of trust. The principle of informed consent requires clear disclosure of all loan terms before processing.

If you need specific judgement references for your case, you can contact Adv. Sudhir Rao on his helpline numbers for detailed legal research and citations.

If You Are the Complainant

• File an immediate complaint with RBI Banking Ombudsman citing unauthorized loan processing
• Submit a detailed timeline of events with supporting documents and evidence
• Request immediate reversal of all unauthorized transactions and charges
• Demand compensation for mental harassment and financial losses incurred
• Insist on blacklisting the errant finance company officials from your credit report

If You Are the Victim

• Immediately approach your bank to freeze further EMI deductions from your account
• File a police complaint under relevant sections of BNS for document forgery
• Contact the finance company’s grievance cell with written complaint and evidence
• Maintain detailed records of all communication and financial transactions
• Seek legal remedy through consumer court for unfair trade practices

How the Police Behave in Such Cases

Police typically treat these as civil matters initially and may be reluctant to register FIR immediately. They often ask victims to first exhaust banking channels and RBI complaint mechanisms. However, when document forgery and signature fraud are clearly established, police become more cooperative. Economic offence cells in metropolitan areas are generally more experienced in handling such financial frauds and provide better investigation support than local police stations.

FAQs People Normally Have

Can finance companies process loans without my signature? No, valid loan processing requires explicit written consent and signature verification.

How long does RBI Ombudsman take to resolve such cases? Typically 30-60 days for initial response and 3-6 months for complete resolution.

Will this affect my credit score? Yes, until resolved, but you can dispute the entries with credit bureaus.

Can I claim compensation for harassment? Yes, RBI Ombudsman can award compensation up to Rs. 20 lakhs for deficiency in service.

What Evidence Is Required?

• Original KYC documents you provided for inquiry purposes only
• Bank statements showing unauthorized EMI deductions
• Communication records with dealership and finance company
• Witness statements from dealership visit if available
• Any acknowledgment letters or receipts from initial inquiry
• Credit bureau reports showing the unauthorized loan entry
• Mobile phone recordings or message screenshots if any

How Long Will the Investigation Take?

RBI Banking Ombudsman investigations typically take 30-90 days depending on case complexity. Bank internal investigations may take 15-30 days initially. Police investigations for document forgery can extend 3-6 months. Consumer court proceedings may take 6-12 months for final resolution. The timeline largely depends on cooperation from financial institutions and availability of clear documentary evidence.

Advocate Sudhir Rao, Supreme Court of India