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                                                         REPORTABLE

             IN THE SUPREME COURT OF INDIA

             CRIMINAL APPEALLTE JURISDICTION

          CRIMINAL APPEAL NO.                      OF 2008.

              [Arising out of SLP (Crl.) No. 4935 of 2006]

ICICI Bank                                           .. Appellant

                               Versus

Shanti Devi Sharma & Others                          .. Respondents

                        JUDGMENT

Dalveer Bhandari, J.

1.   Leave granted.

2.   This appeal is directed against the order dated 13th July,

2006 passed by the High Court of Delhi in Writ Petition

(Criminal) No. 576 of 2006 and order dated 11th August, 2006

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passed in Crl. M. A. Nos. 8093-94/2006 in W.P. (Crl.) No. 576 of

2006.

3.    The question that arises in this case in narrow compass:

Should part of the impugned judgment be expunged so that it

may     not   adversely    influence   on   an    ongoing   criminal

investigation? The respondent filed a criminal writ petition

number 576 of 2006 with the Delhi High Court. Vide this writ

petition, the respondents sought a writ of mandamus that would

direct the Commissioner of Police to take action against the

appellant bank.         Respondent no.1 alleged       that her son

committed suicide as a result of the manner in which the bank’s

recovery agents had repossessed her son’s motorcycle.         In the

first information report (F.I.R.) dated 29.11.2005, the respondent

alleged that on 16th October, 2005 at about 1.00 p.m., two

recovery agents      (referred to as "goons")    forcibly entered her

son’s bedroom and started harassing and humiliating him for

the loan payments that were overdue on his two wheeler and on

his personal loan.

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4.   According to respondent no. 1, they repossessed the vehicle

taken in the presence of his friends who ridiculed him for having

lost the motorcycle. It is further mentioned in the FIR that the

deceased had used his motorcycle to get vegetables for his small

restaurant. It is also alleged that the deceased had to carry the

vegetables on his back in the absence of his motorcycle. Upon

finding the deceased carrying vegetables on his back, members

of the neighborhood allegedly made snide comments. The

deceased finally broke down before his wife and allegedly stated

that he had never faced such a humiliation and disgrace in his

entire life. On that very day, while his wife was washing clothes,

the deceased went inside the small inner room and hung himself

to death. We reiterate that this version of the events is found in

the FIR and is thus an allegation at this time.

5.   To ascertain the veracity of these assertions, the High

Court ordered the Police to file reports as to the status of the

investigation against the bank. The High Court later reviewed the

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two status reports that were filed by the Police. It found them

unsatisfactory and accordingly, the High Court directed the

Investigating Officer to:

          "conclude the investigation into the matter as            expeditiously as possible and take necessary action            against those who may be found guilty of abetting the            deceased to commit suicide."

In addition, the High Court stated that:

    "Para 1: "... the vehicle for which the loan was taken      was repossessed by the musclemen employed by      ICICI Bank.

    Para 3: "...the proximate cause of death of the      deceased that led him to commit suicide was on      account of humiliation caused by the Bank people      from where loan was taken by him."

    Para 4:    "The modus-operandi employed by the      banks like ICICI for realization of their loan amount      and for recovering the possession of the vehicle      against which loans are given is extra legal and by no      stretch of imagination they can be permitted to      employ musclemen and goons for recovery of their      dues even from a defaulting party."

6.   The appellant bank claimed that it was aggrieved by the

observations made by the High Court in paragraphs 1, 3 & 4 of

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the impugned order. The bank asked the High Court to clarify or

delete paras 1, 3 and 4. It did so by way of an application for

impleadment      as     well    as     an     application        for

clarification/deletion/modification under section 482 (saving of

inherent power of High Court) of the Criminal Code of Procedure,

1973. According to the appellant bank, the observations made

by the High Court were unjustified and unnecessary for deciding

the case.

7.   In an order dated 11.8.2006, the High Court declined to

expunge the impugned observations because it had made them

"... consciously and there are no reasons to expunge the same."

Nevertheless, the High Court clarified the matter by stating as

under:

          "However, it is clarified that any observation      made against ICICI Bank in the order passed by this      Court on 13.07.2006 shall not influence or affect the      proceedings, if any, taken against the said bank or      its employees."

8.   Given that the investigation had not been completed, the

High Court could have prefaced its observations by stating that

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the facts were alleged. It did, however, note that "... perusal of

the complaint would reveal that the proximate cause of death ...

was on account of humiliation caused by the Bank people ... ."

Reference to the "complaint" implies that its contents contain

allegations, not facts. Moreover, the investigation was ongoing.

Thus, it should have been understood that the High Court was

referring to alleged facts. That said, the court could have been

more careful to note that the facts that it discussed were alleged.

Recognizing as much, the court clarified that its observations

were not to influence or affect the proceedings.

9.   We reiterate the same. They will have no bearing on the

ongoing investigation.   Given this clarification, we do not feel

that the appellant bank has been substantially aggrieved. Nor

do we believe that expunging the impugned observations would

have much of an effect.      Under either scenario, having the

observations expunged or having them clarified, no one can rely

on the observations.

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10.   As mentioned, the investigation is ongoing.     Neither the

High Court’s order nor the observations made herein are to

influence the investigation, save the time period in which it must

be completed. Nevertheless, it is appropriate to remind financial

institutions that they are bound by law. The recovery of loans or

seizure of vehicles can only be done through legal means.

11.   The Securitization and Reconstruction of Financial Assets

and Enforcement of Security Interest Act, 2002 ("SARFAESI")

and the Security Interest (Enforcement) Rules, 2002 ("SIER")

framed thereunder provide some of the procedures by which

security interests may be recovered.   In addition to SARFAESI

and SIER, the Reserve Bank of India ("RBI") has promulgated

Guidelines on the subject. The RBI Guidelines on Fair Practices

Code for Lenders dated 5.5.2003 provides at (v)(c) that: "In the

matter of recovery of loans, the lenders should not resort to

undue harassment viz. persistently bothering the borrowers at

odd hours, use of muscle power for recovery of loans, etc."

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12.    A more comprehensive version of these Guidelines was

recently released on April 24, 2008. The Guidelines expressly

reference the 5.5.2003 Guidelines at (i)(x) with regard to the

methods      by   which   recovery   agents   collect   on   security

interests.    In addition, the April 24, 2008 Guidelines further

referred paragraph 6 of the "Code of Bank’s Commitment to

Customers" (BCSBI Code) pertaining to collection of dues.

The BCSBI Code at para 6 inter alia provides:

          "All the members of the staff or any person       authorized to represent our bank in collection or/and       security repossession would follow the guidelines set       out below:

     1. You would be contacted ordinarily at the place of          your choice and in the absence of any specified          place at the place of your residence and if          unavailable at your residence, at the place of          business/occupation.

     2. Identity and authority to represent would be made          known to you at the first instance.

     3. Your privacy would be respected.

     4. Interaction with you would be in a civil manner.

     5. Normally our representatives will contact you          between 0700 hours and 1900 hrs, unless the          special circumstances of your business or          occupation require otherwise.

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    6. Your requests to avoid calls at a particular time or         at a particular place would be honored as far as         possible.

    7. Time and number of calls and contents of         conversation would be documented.

    8. All assistance would be given to resolve disputes         or differences regarding dues in a mutually         acceptable and in an orderly manner.

    9. During visits to your place for dues collection,         decency and decorum would be maintained.

    10. Inappropriate occasions such as bereavement in          the family or such other calamitous occasions          would be avoided for making calls/visits to          collect dues.

As noted above, this Code as well as others has been

incorporated into the April 24, 2008 Guidelines:

   "(ix) A reference is invited to (a) Circular     DBOD.Leg.No.BC.104/ 09.07.007 /2002-03 dated     May 5, 2003 regarding Guidelines on Fair Practices     Code for Lenders (b) Circular DBOD.No.BP. 40/     21.04.158/ 2006-07 dated November 3, 2006     regarding outsourcing of financial services and (c)     Master Circular DBOD.FSD.BC.17/ 24.01.011/2007-     08 dated July 2, 2007 on Credit Card Operations.     Further, a reference is also invited to paragraph 6 of     the ’Code of Bank’s Commitment to Customers’     (BCSBI Code) pertaining to collection of dues. Banks     are advised to strictly adhere to the guidelines / code

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     mentioned above during the loan recovery process."                                          [emphasis supplied].

13.      RBI has expressed its concern about the number of

litigations filed against the banks in the recent past for engaging

recovery agents who have purportedly violated the law. In the

letter     accompanying    its   April    24th,   2008   Guidelines    on

Engagement of Recovery Agents, RBI stated: "In view of the rise

in the number of disputes and litigations against banks for

engaging recovery agents in the recent past, it is felt that the

adverse publicity would result in serious reputational risk for the

banking sector as a whole." RBI has taken this issue seriously,

as evidenced by the penalty that banks could face if they fail to

comply with the Guidelines.              The relevant portion of the

Guidelines formulated by RBI is set out as under:

             "3. Banks, as principals, are responsible for the          actions of their agents. Hence, they should ensure          that their agents engaged for recovery of their dues          should strictly adhere to the above guidelines and          instructions, including the BCSBI Code, while          engaged in the process of recovery of dues.

             4.   Complaints    received    by   Reserve   Bank

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     regarding violation of the above guidelines and       adoption of abusive practices followed by banks’       recovery agents would be viewed seriously. Reserve       Bank may consider imposing a ban on a bank from       engaging recovery agents in a particular area, either       jurisdictional or functional, for a limited period. In       case of persistent breach of above guidelines, Reserve       Bank may consider extending the period of ban or       the area of ban. Similar supervisory action could be       attracted when the High Courts or the Supreme       Court pass strictures or impose penalties against any       bank or its Directors/ Officers/ agents with regard to       policy, practice and procedure related to the recovery       process.

          5. It is expected that banks would, in the       normal course ensure that their employees or agents       also adhere to the above guidelines during the loan       recovery process."

14.   We deem it appropriate to remind the banks and other

financial institutions that we live in a civilized country and are

governed by the rule of law.

15.   Looking to the gravity of the above allegations, we expect

that the matter will be investigated as expeditiously as possible

and, in any event, it must be concluded within a period of three

months and, thereafter, the concerned Deputy Commissioner of

Police is directed to submit the report of the investigation in the

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High Court.

16.   In the facts and circumstances of this case we direct the

appellant to pay costs of this litigation to the respondents which

is quantified as Rs.25000/-.     The costs be paid within three

weeks. We direct that the matter be listed before the High Court

after the report of the Deputy Commissioner of Police is filed.

17.   This appeal is accordingly disposed of.

                                          ...............................J.                                            (Tarun Chatterjee)

                                          ...............................J.                                            (Dalveer Bhandari) New Delhi; May 15, 2008

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