On Tuesday, the Supreme Court dismissed a Public Interest Litigation (PIL) seeking guidelines against the use of force by recovery agents of government banks and microfinance institutions. The petitioner was given the liberty to make a representation to the concerned ministry.

The petition was filed by Vikram Sharma, Dheerendra Shukla, Rajesh Sharma and NGO Save Them India Foundation. This petition is about the use of force by recovery agents of government banks and microfinance institutions to stop them from using harassing and violent methods for recovery against their customers. This is against the rule of law, the plea stated. It also asked to ensure that there is strict delivery of instructions on such institutions to stop such practices that are violative of the guidelines issued by the Ministry of Finance. The petitioner also submitted that the inaction of the financial authorities has led to this situation.

The microfinance institutions and banks use force for the recovery of loans and there are no strict guidelines to check them said Advocate Vishal Tiwari during the hearing. The serious financial burden has been imposed on the borrowers because of the high amount of rates with additional cost in the form of insurance premium. The disposable income of the citizens has been burdened up by such costs imposed on the principal amount.

Since 2003, Reserve Bank of India (RBI) has issued circulars for this problem, this was observed in the petition by Justice Rohinton Nariman. The counsel asked for guidelines as circulars are not working for this problem.

So, the three-judge bench of Justice R.F. Nariman, Justice Hemant Gupta and Justice B.R. Gavai asked the petitioners to withdraw the plea and said that they can make a representation to the concerned ministry to redress their grievances.