'Police Sitting Tight Over Matter': MP High Court Directs Preliminary Inquiry Into Alleged Coercive Recovery Practices By Bajaj Finance

The Madhya Pradesh High Court has directed the concerned police officials to conduct a preliminary inquiry in a writ petition alleging arbitrary and oppressive conduct by Bajaj Finance Limited, which was accused of using coercion, threats and abusive language to recover a business loan of ₹ 25.69 lakhs. 

Observing that the police officials were 'sitting tight over the matter', the bench of Justice Pranay Verma directed,

"In view of the same, respondents/authorities are directed to conduct preliminary enquiry which would mean to go through the complaint and find out whether any cognizable offence is made out or not. If cognizable offence is made out, then the FIR shall be registered. If no cognizable offence is made out, then the petitioner should be informed of the same. Let either of the same be done within a period of 90 days from the date of receipt of certified copy of this order. With the aforesaid directions, the petition stands disposed off". 

According to the petition filed by M/s Aaratrika Traders, Bajaj Finance had sanctioned the said business loan on December 14, 2023. However, out of ₹25.69 lakhs, only ₹24.93 was actually disbursed after deductions towards charges and insurance. 

Despite the petitioner making repayments in part, amounting to ₹6.62 lakhs, Bajaj Finance allegedly issued a closure computation on July 18, 2025. Bajaj Finance demanded nearly the entire sanctioned amount as outstanding principal. Bajaj Finance's computation reportedly inflated the dues to approximately ₹26.90 by adding foreclosure charges, interest and other receivables. 

The petitioner, on September 3, 2025, submitted a representation seeking a one-time settlement due to business losses and destruction of stock. But instead of accepting the request, Bajaj Finance allegedly resorted to coercive recovery through unauthorised agents. 

The petitioner claimed that the recovery agents visited his house and office in an attempt to recover the money forcefully by threatening and abusing him. The petitioner, on September 6 2025, filed a detailed complaint, claiming that the actions of Bajaj Finance violated the established guidelines of the Reserve Bank of India. 

Per the petition, the police officials failed to take any action on the complaint. Thus, the petitioner approached the High Court, asserting that such inaction by police officials violated his fundamental rights under Articles 14 and 21 of the Constitution.

The petitioner, thus, sought directions for the police officials to take appropriate steps to register an FIR based on the petitioner's complaint against the coercive recovery process adopted by Bajaj Finance. The petitioner also sought directions to restrain the agents or representatives of Bajaj Finance from taking any coercive steps or employing musclemen for the recovery of the petitioner's dues. 

The petitioner claimed that once a complaint has been filed, there is a duty upon the police officials to either register an FIR in case of cognizable offence or inform the complainant in case the offence was non-cognizable, to enable the complainant to pursue other remedies.

The petitioner asserted that Section 173 BNSS mandates that 'every information given relating to commission of a cognizable offence, irrespective of the area where the offence is committed is to be registered by officer incharge of a Police Station, if offence is cognizable in nature and punishable between 3-7 years. Preliminary enquiry is to be conducted within a period of 14 days and if there is a prima facie case, then action is to be taken'. 

The counsel appearing for the State, however, opposed the plea on grounds of maintainability. The state argued that the petitioner had an alternate remedy and therefore should approach the appropriate authorities. 

"Existence of alternate remedy is not a bar for filing a petition under Article 226 of the Constitution of India", the court first noted.

The bench further observed that, despite the availability of an alternate remedy, the authority to entertain such a plea falls within the discretion of the court. 'Court can always interfere in the matter', in case the alternate remedy is not efficacious or if there is a violation of fundamental rights or natural rights.

Referring to the case of Lalita Kimar v Government of UP [(2014) 2 SCC 1], the court reiterated that if a cognizable offence is made out, then an FIR is to be registered; and a party may avail an alternate remedy only after intimation from the police that the matter is non-cognizable. 

The court further observed;

"In the present case, the Police is sitting tight over the matter and no decision is taken to register the case or not. The Police authorities are free to take decision to lodge or not to lodge the FIR in accordance with Section 173 of the Bhartiya Nagrik Surksha Sanhita, 2023. No decision has been taken by respondents in view of which the petitioner is unable to proceed further". 

Therefore, the court disposed of the petition while directing the concerned police officials to conduct a preliminary enquiry within 90 days to ascertain whether a cognizable offence was made out. 

Case Title: M/s Aaratrika Traders v the State of Madhya Pradesh (WP-37028-2025)

Citation: 2025 LiveLaw (MP) 194

For Petitioner: Advocate Yamak Sharma

For State: Government Advocate Amit Bhatia 

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