Facts of the case:

• The petitioner, Debanjana Debarman, had purchased a car on Hire Purchase Agreement from ONGC Colony Branch of State Bank of India. ONGC Branch of SBI agreed to finance the petitioner with Rs. 2,40,000/- which were to be paid in 72 instalments of Rs. 4.501/- each.
• During that time, the petitioner’s husband met with a serious fire accident, for which she had to spend Rs.25 lacs. As a result she was not able to pay the instalment amount. The financer and the Other Parties declared the amount as NPA (Non-Performing Asset) via a notice to the petitioner dated 08.11.15.
• The petitioner stated that even after the amount was declared NPA an amount of Rs.16,000/- was taken from her. She also stated that on 04.06.16, recovery agents forced entry into her house and harassed both husband and wife and took the original key of the car. They further demanded an amount of Rs. 4,500/- as REPO charges. The petitioner had deposited an amount of Rs. 14,000/- thereafter.
• The respondents stated that they had informed the petitioner of her defaults and had sent notice for payment of instalments. They further stated that no recovery agent had demanded any amount of payment. The borrower had failed to pay the instalments.
• It was found that either Rs.4600/- or Rs.5000/- were paid regularly by the petitioner through the years 2013, 2014 and 2015. The remaining amount was Rs.1,63,532/- after the calculation of interests. The petitioner had asked for three months’ time to repay the amount on 30.06.16. It was established from the medical documents that she was incapable of paying the instalments due to her husbands’ unforeseeable condition.

Judgement:

The court found that despite being aware of the petitioner’s circumstance the bank had directed the recovery agents to threaten, harass and assault the petitioner and her husband causing them mental agony. This was clearly an unfair trade practice and as such the bank was held vicariously liable for the actions of the recovery agent and other parties. The court directed the other parties to pay a sum of Rs.25,000/- as compensation to the petitioners.

Learnings from the case:

Banks are vicariously liable for the action of their employees. Anyone who works under them, or work as their agent is accountable to the bank. The bank has to ensure that the employees and agents are doing the job according to the rules and regulations. Any default on their side will make the bank liable for such acts.