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2015 (2) TMI 1046
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.... thereof, these two writ petitions were heard one after the other and shall stand disposed of by this common judgment and order. 2) Mr. Banerjee and Mr. Tiwari, learned advocates representing the two sets of petitioners contended that publication of photograph(s) of the defaulting borrower(s) and guarantor(s) as a measure for recovery of the secured debt does not enjoy legislative sanction and, therefore, the secured creditors may be permanently restrained from proceeding in that direction. 3) Mr. Sinha, learned advocate representing the secured creditor in W.P. 10315(W) of 2013 relied on the decisions of the Madhya Pradesh and Madras High Courts, reported in AIR 2007 Madhya Pradesh 45 : Ku. Archana Chauhan v. State Bank of India, Jabalpur and [2007 136 Comp. Cas 568 (Mad) : Mr. K.J. Doraisamy v. the Assistant General Manager, State Bank of India, Erode Branch, respectively to urge that the point raised by the petitioners in these two writ petitions is no longer res integra. Both the Courts have, in unambiguous terms, held that publication of photographs of the defaulting borrowers is not prohibited by the SARFAESI Act and, therefore, cannot be held to be impermissible. 4) It is....
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....dey v. State of West Bengal. Taking a cue therefrom, he proceeded to submit that publication of photographs, names and addresses of the defaulting borrower(s)/guarantor(s) in the newspapers by public sector banks is really a step satisfying public interest and can be termed as an act for 'public good' for good reasons. India had a fairly well developed commercial banking system in existence at the time of independence in 1947. The RBI was established in 1935. While the RBI became a state owned institution from January 1, 1949, the Banking Regulation Act was enacted in 1949 providing a framework for regulation and supervision of commercial banking activity. The first step towards the nationalization of commercial banks was the result of a report (under the aegis of the RBI) by the Committee of Direction of All India Rural Credit Survey (1951), which till today is the locus classicus on the subject. The Committee recommended one strong integrated state partnered commercial banking institution to stimulate banking development in general and rural credit in particular. Thus, the Imperial Bank of India was taken over by the Government and renamed as the SBI on July 1, 1955 with the RBI ....
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....h act of publication has not been prohibited by any of the legislations relating to recovery of the secured creditor's dues. 9) Furthermore, such publication of information (photographs, names and addresses) of defaulting borrowers in the newspapers by public sector banks would act as a deterrent for would be borrowers seeking financial assistance with the evil intention to evade repayment and keep them away from the national financial system. Such deterrent measures to stave/fend off potentially defaulting borrowers from the national financial system are the need of the hour inasmuch as the Indian economy continues to be challenged by the ongoing financial crisis which started as a result of debt fuelled consumption. 10) The prohibition contained in the general law of contract and the penal law, it was submitted, is thus inapplicable to the facts of the present case or such similar cases. 11) The next point, which according to Mr. Rai deserves consideration, is that the banks share a fiduciary relation with their customers and are, therefore, obliged to maintain secrecy of the customer's accounts. The duty to maintain secrecy as aforesaid which arises from the contract between ....
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....29. The above discussion makes it clear that from the point of view of the individual, his right to privacy is not absolute and from the point of view of the Bank, the duty to maintain secrecy is superceded by a larger public interest as well as by the Bank's own interest under certain circumstances. 30. Coming to the authority of law, by which the Bank may be allowed to publish the photograph of the defaulter, it is seen that Section 13(4) of the Sarfaesi Act authorizes the Bank to take possession of the secured asset and sell it. The procedure for such sale is prescribed under Rule 8 of the Security Interest (Enforcement) Rules, 2002. Sub-rule (1) of Rule 8 reads as under: '8. Sale of immovable secured assets. - (1) Where the secured asset is an immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property. Appendix IV....
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........ d) ...... e) information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information; f) ......... g) ..... h) .... i) .... j) Information which relates to personal information the disclosure of which has no relationship to any public activity or interest or which would cause unwarranted invasion of the privacy of the individual unless the Central Public Information Officer or State Public Information Officer or the appellate authority as the case may be, is satisfied that the larger public interest justifies the disclosure of such information.' Thus the aforesaid provision leaves no room for any doubt that the 'Right to Privacy' fades out in front of the 'Right to Information' and 'larger public interest'. 32. If borrowers could find newer and newer methods to avoid repayment of the loans, the Banks are also entitled to invent novel methods to recover their dues. Moreover, the petitioner is not entitled to seek the relief of a writ of mandamus for the flowing reasons also: (a) It is ....
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....into the right of privacy, the learned Judge referred to Rule 8 of the Security Interest (Enforcement) Rules, 2002 (hereafter the Rules) and the contents of Appendix IV, being the form in which the notice of possession is required to be given. The learned Judge appears to be right in his observation that Rule 8 read with Appendix IV provides for a notice not merely to the defaulting borrower but also to the public in general, but fell in error in observing that the threat of the bank to publish the photograph of the borrower is also authorized by the statutory rules. Reading the relevant statutory rules as they presently stand, I am of the considered view that publication of photograph of a borrower is neither allowed by express provision nor by necessary implication. The public may be notified in terms of the statutory rules by issuance of notices in newspapers/magazines etc. giving the details of the borrower, the loan account, the location of the secured asset, its measurement, the quantum of secured debt, etc. but there is no provision in the SARFAESI Act or the rules framed thereunder authorizing the secured creditor to publish photographs of the defaulting borrowers. 22) Rel....
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....rity interest; it is empowered and authorized to take such action that the statute permits it. There is absolute lack of legislative sanction in relation to publication of photographs of defaulting borrower(s)/guarantor(s). The SARFAESI Act and the rules framed thereunder not having conferred any power on the secured creditors to publish their photographs, they cannot resort to such action on the ground that publication of photograph is not prohibited. For the secured creditors, the test is not as to whether publication is prohibited by the statute but whether such publication is permitted by it. Prohibition has to be inferred in the absence of express authorization. If the arguments advanced by the respective learned counsel for the secured creditors were accepted, the secured creditors would have the carte blanche to invent any method for recovery of their secured debt throwing asunder the provisions of the SARFAESI Act. 25) That apart, the problem could be looked at and answered from a different angle. There is little doubt that the SARFAESI Act confers wide powers on the secured creditors to enforce the security interest without judicial intervention up to the stage of taking ....
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....t of mandamus can be issued only to compel the performance of a statutory or public duty and not to prohibit performance of a public duty does not appear to me to be legally sound, in the given circumstances. It is not the public duty of a secured creditor to publish photograph of a defaulting borrower and, therefore, a writ of mandamus may well issue restraining it from indulging in an act which is manifestly unauthorized. 27) For the reasons aforesaid, I hold that the decisions in Archana Chauhan (supra) and K. J. Doraisamy (supra) are not persuasive precedents. 28) Since legislative sanction is absent, it would be an academic exercise to examine the other issue as to whether publication of photograph, even if it were authorized by the statute, would offend Article 21 of the Constitution or not. I allow the issue to rest here. 29) Adverting to the letter issued by the Reserve Bank of India, it appears that the decisions in Archana Chauhan (supra) and K. J. Doraisamy (supra) were duly noticed. It is considered necessary to reproduce the letter of the Deputy General Manager of the Reserve Bank of India in its entirety. The same reads as follows: &nb....