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The SC ruled that a night-time vehicle seizure without seven-day notice violates RBI Guidelines and Articles 14 & 21, directing the financier to close the loan, refund ₹4.5 lakhs at 6 % interest and pay ₹10 lakhs compensation.
The Calcutta High Court set aside a bank’s SARFAESI notice, ruling that under the RBI’s Master Circular an account can be classified as non-performing only after a continuous 90-day default. This safeguards borrowers from premature NPA status and compels banks to follow RBI guidelines.
A writ petition contesting NPA classification is inadmissible unless the borrower first pursues the SARFAESI enforcement route, and the RBI’s 2023 Fair Lending Guidelines, withdrawn in 2025, do not affect this statutory requirement. This limits borrowers’ recourse to writ jurisdiction and underscores the primacy of SARFAESI procedures.
Karnataka High Court rules that banks must substantiate Forward Purchase Contracts with written evidence under the Evidence Act, or risk adverse inference. The judgment reinforces that the burden of proof rests squarely on the claimant, impacting debt recovery proceedings and banking litigation.
The Calcutta High Court has ruled that banks cannot dismiss customer complaints of unauthorized digital transactions without proving the cardholder’s negligence, as mandated by RBI’s 2017 Zero Liability policy. This sets a binding precedent for all banks to bear the evidentiary burden in fraud disputes, empowering consumers against automated rejections by ombudsman mechanisms.
Himachal Pradesh High Court rules that RBI’s 2013 Master Circular on loan restructuring due to natural calamities is legally binding on cooperative banks, mandating relief even if initially denied. The judgment reinforces RBI’s regulatory authority over cooperative banks and ensures borrowers affected by disasters receive statutory protection against NPA classification.
The Bombay High Court has ruled that a bank cannot declare a borrower fraudulent without considering a timely submitted reply to a show cause notice, even if internal records claim non-receipt. This sets a binding standard for procedural fairness in financial adjudication under RBI guidelines, requiring banks to maintain verifiable proof of non-receipt before invoking punitive measures.
Chhattisgarh High Court holds that banks cannot freeze accounts without formal order, even amid suspicious transactions, if customer shows no criminal intent.