Terming a recovery agent firm of a bank as a “group of goons” who did not return the vehicle seized from a man despite one time settlement of the loan amount, the Supreme Court has directed the West Bengal Police to file charge sheet against the company within two months.

A bench of Justices Surya Kant and Ujjal Bhuyan, which directed for payment of compensation to one Debasish Bosu Roy Chowdhury who took a loan of Rs 15.15 lakh for purchasing a bus for plying in Kolkata, directed Bank of India to recover the amount from the recovery agent.

“Given the observations made by the High Court and the plea taken by the petitioners, we find that respondent No. 4, a recovery agent, in actuality appears to be a group of goons, who use their muscle power to harass loanees on behalf of the petitioner-bank,” the bench said in its recent order.

It noted an FIR was lodged against the recovery agent firm M/s City Investigation and Detective for failing to return the vehicle in proper condition and said, “The Commissioner of Police of the concerned area is directed to ensure that investigation of FIR dated July 5, 2023, registered at Police Station Sodepur in West Bengal, under Sections 406, 420 and 471 of the IPC, is taken to its logical conclusion without any delay, and charge sheet is filed within a period of two months.”

The recovery agent firm, however, later returned the vehicle but in a damaged condition, with chassis and engine numbers changed.

“The petitioner-bank shall be entitled to recover the compensation amount paid to respondent No. 1 (Chowdhury) from respondent No. 4 (recovery agent firm), or any other person found to be responsible for the damage caused to the vehicle,” the bench said. It directed that thereafter, the trial Court would take cognisance of the charge sheet and proceed in accordance with law.

The bench further directed, “If there is any license/authority letter granted by a competent authority to respondent No. 4 to act as recovery agent, the petitioner-bank is directed to make a separate complaint to that authority, regarding cancellation of such permission/authority letter.”

The top Court refused to interfere with the Calcutta High Court order of May 16 by which the bank was asked to pay Chowdhury Rs 5 lakh interim compensation for its conduct in not returning the vehicle to him. The High Court had granted liberty to the loanee to approach the civil Court for higher compensation.

Chowdhury had approached the bank for a loan of Rs 15.15 and upon satisfaction of his credentials, his loan was sanctioned and to be repaid along with interest in 84 equated monthly installments of Rs 26,502 commencing from December 2014. The vehicle (bus) in question was hypothecated to the bank.

 It was contended by the bank that from January 2018, Chowdhury started defaulting in payment of monthly installment and his account was declared a Non-Performing Asset (NPA) on May 31, 2018.

The outstanding amount of loan as on date of NPA stood at Rs 10.23 lakh.

The top Court noted that the bank hired the services of M/s City Investigation and Detective, the so-called recovery agent, who was aided by the Government authorities in seizing Chowdhury's vehicle for and on behalf of the bank.

The bank claimed in the High Court that the market value of the vehicle as on July 31, 2019 was only Rs 2.37 lakh and the distress sale value was only Rs 1.66 lakh.

In March 2021, Chowdhury approached the bank for One-Time Settlement (OTS) of Rs 1.8 lakh towards the entire outstanding. The bank agreed to the proposal to accept the OTS offer though it was only 17.75 per cent of the outstanding dues. “For reasons best known to the officers of the bank, a one-time settlement (OTS) was executed between the bank and respondent No. 1 (loanee) for a paltry sum of Rs 1,80,000. The said amount was admittedly deposited by respondent No. 1 (loanee) with the Bank,” the top court noted in its order. It said the vehicle, however, was not released to the loanee, even though the bank was bound to do so, having accepted the OTS.

“After great efforts, the vehicle/bus was recovered, but by that time its chassis number and engine number were changed and some of the spare parts were also removed. Also, the vehicle was not in working condition,” the bench noted.