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Banking & Debt Recovery LawSupreme Court of India

Akshay Gupta v. ICICI Bank Limited

Civil Appeal · 2025 INSC 391Decided 25 Mar 2025
C.A. No.-001708 - 2023 (with connected Civil Appeal Nos. 1709/2023, 2828/2023 and 4336/2023)
Justice Vikram Nath · Justice Sanjay Karol

Background

Several flat buyers had taken home loans from ICICI Bank to purchase apartments from builder Rajsanket Realty Ltd. When the builder defaulted on its obligations, the Bank issued a loan recall notice against the buyers, which the buyers challenged before the National Consumer Disputes Redressal Commission (NCDRC) as an unfair trade practice and a violation of RBI guidelines. The NCDRC rejected their complaints, and the buyers appealed to the Supreme Court. Rather than deciding the dispute on merits, the Court used two earlier hearings (October and November 2024) to broker a three-way settlement between the buyers, the Bank, and the builder.

Decision Breakdown

Under Court-supervised negotiations, the Bank agreed to waive outstanding charges and give a 30% discount on pre-EMI amounts, the builder agreed to bear 50% of the outstanding pre-EMI and to complete/hand over the flats, and the buyers agreed to pay the outstanding principal and their share of pre-EMI upfront. After confirming full compliance through affidavits, the Court directed the Bank to record the loan accounts as fully repaid (not merely "settled," since that word could hurt the buyers' future credit prospects), directed the builder to hand over completed possession by 31 March 2025 and issue written acknowledgment of payments received, and directed the Bank to withdraw any pending recovery proceedings before the Debt Recovery Tribunal. All four connected appeals were disposed of as fully resolved.

Lesson Learnt

Consumer disputes involving multiple stakeholders (lender, developer, and buyer) can often be resolved more practically through court-supervised settlement than adversarial litigation, and buyers should specifically ask that a repaid loan account be labelled "repaid," not "settled," since the wording used in bank records can affect future creditworthiness.

Akshay Gupta v. ICICI Bank Limited – Legal Case Shots | LegalAware