A month after the Supreme Court came down heavily on banks for using muscle power to recover loan amounts and seize vehicles, a division bench of Calcutta High Court has awarded a verdict defending a bank’s use of force to do that.

Last week, a division bench of the high court, headed by Justice B. Bhattacharya, ruled that for re-possession of articles, application of force by the banks was “tolerable” and that no criminal proceeding could be brought against it.

This was in connection with a petition filed by Bhanu Pratap Singh, a transporter in Hooghly, whose truck was forcibly seized by strongmen appointed by a financial institution in June last year for allegedly failing to pay three consecutive monthly instalments.

In his petition, Singh said his truck was captured on Durgapur Expressway by some musclemen appointed by the financial institution. He alleged that police had failed to take any action, prompting him to approach the court.

The division bench, dismissing the petition, ruled that the financial institution was justified as he had defaulted, and ruled that the financial institution “had not committed any criminal offence”.

The court, refusing to take cognisance of the fact that force had been applied to seize the truck, observed: “As the borrower had committed an undisputed default, the lender had the right to take possession of the vehicle. In this type of dispute, no direction can be given to the police.”

Barely a month ago, a Supreme Court division bench of Justice A.R. Lakshmanan and Justice A. Kabir, in a case of a foreign bank versus Prakash Kaur and others, had ruled that agencies used by banks to forcefully recover loan amounts should be abolished. Banks, it said, should create a department for recovering loans, “manned by persons who will not resort to violence”, and stressed that “social responsibility is larger than the bank’s profit and growth ratio”.

Following the Calcutta High Court verdict, “banks will now increasingly use musclemen to recover loans and vehicles”, warned advocate Pradip Roy, who appeared on behalf of petitioner Singh.