The Supreme Court has reiterated that courts and the police are not recovery agents, emphasizing that the legal system should not be misused to resolve civil disputes. This statement underscores the court's concern about the increasing trend of registering First Information Reports (FIRs) in matters that are essentially civil in nature.

The observation was made in light of instances where police and recovery agents were seen overstepping their authority in debt recovery cases. The Supreme Court has previously reprimanded recovery agents for using intimidation tactics and acting like "gangs of goons". In one such case, the court directed the West Bengal Police to file charges against a recovery agent firm that refused to return a vehicle to its owner even after the loan was fully repaid. The court also mandated compensation for the victim and instructed the Bank of India to recover the amount from the agent firm.

This stance aligns with the Reserve Bank of India's (RBI) guidelines on recovery agents, which prohibit them from taking the law into their own hands and emphasize that recovery of loans or seizure of vehicles should only be done through legal means. The Supreme Court has also suggested using the forum of Lok Adalats for resolving loan disputes, especially for personal loans, credit card loans, and housing loans less than Rs. 10 lakh.

The court's firm stance against the misuse of power by recovery agents and the police aims to protect borrowers from harassment and ensure that debt recovery is conducted within the bounds of the law. It also serves as a reminder to the police and lower courts that they should not act as recovery agents for banks or financial institutions.

Furthermore, the Supreme Court has made it clear that borrowers cannot redeem their property after the publication of an auction notice under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act. Once a sale certificate is issued by creditor banks or financial institutions, the purchasers acquire indefeasible rights. The court noted that the SARFAESI Act was enacted to protect banks and financial institutions by providing expeditious procedures for debt recovery.

Several High Courts have also intervened in cases involving the reluctance of police to execute warrants in financial default cases. These courts have directed police authorities to actively execute warrants and have treated systemic inaction as a threat to the administration of justice. These rulings highlight the willingness of High Courts to treat warrant execution not as a private grievance but as a systemic failure justifying constitutional intervention.

In conclusion, the Supreme Court's stance reinforces the importance of adhering to legal procedures in debt recovery and protecting the rights of borrowers. It serves as a check on the misuse of power by police and recovery agents and ensures that the legal system is not used as a tool for coercion or harassment.