Banking & Recovery · In Hindi
Loan recovery agents and a borrower’s legal rights
The legal position when recovery agents harass a borrower, and the remedies available against unlawful recovery practices.
Commercial, Financial & Employment Disputes
Banking & Financial Litigation
Banking and financial litigation covers disputes between banks or financial institutions and their borrowers, guarantors and customers. Beyond SARFAESI and DRT proceedings, it includes cheque dishonour, recovery practices, ombudsman complaints and challenges to classification decisions.
Matters handled
- Recovery proceedings
- Suits and Debts Recovery Tribunal applications for recovery of loans, with defences and counter-claims. See DRT & SARFAESI.
- Cheque dishonour
- Proceedings under Section 138 of the Negotiable Instruments Act, 1881, for complainants and accused.
- Recovery agents and harassment
- Remedies against coercive or abusive recovery practices that breach RBI directions on fair practices and recovery agents.
- Ombudsman complaints
- Complaints against banks and NBFCs under the RBI Integrated Ombudsman Scheme, 2021.
- Fraud and wilful defaulter classification
- Challenges to classification of an account as fraud or a borrower as a wilful defaulter. In State Bank of India v. Rajesh Agarwal (2023) the Supreme Court held that borrowers must be heard before an account is classified as fraud.
- Guarantor liability
- Disputes over the liability of guarantors and the enforcement of guarantees.
How proceedings typically run
- Review of the loan record Sanction letter, loan agreement, security documents, statements of account and notices.
- Representation to the lender A reasoned written response, often the first and most useful step.
- Choice of forum Ombudsman, DRT, civil court, criminal court or High Court, depending on the dispute.
- Proceedings Filing, replies, hearings and orders, with appeals where available.
Documents usually needed
- Loan agreement and sanction letter
- Statements of account
- Notices from the bank or recovery agents
- Records of calls or messages, in harassment cases
- Cheque, return memo and legal notice, in cheque dishonour matters
Please do not send original documents or confidential material through this website. Documents are reviewed only after the chamber has agreed to consider a matter.
Watch
Common questions
What are the time limits in a cheque bounce case?
The payee must send a demand notice within 30 days of learning that the cheque was dishonoured. If payment is not made within 15 days of receiving the notice, a complaint may be filed within one month after that period ends.
Can recovery agents call at any time?
No. RBI directions require lenders and their agents not to harass borrowers, and restrict recovery calls to between 8 a.m. and 7 p.m.
Related areas
General information only, not legal advice. The law stated is subject to change; reviewed by Hanmat Lodhi Advocate.
Professional enquiries
Contact the chamber
Enquiries are received by telephone and at the chamber. Please do not send confidential documents through this website or social media.