TaxTMI 
TaxTMI 
2015 (5) TMI 194
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..... 3. Brief facts which are necessary for the purposes of deciding this petition are as under: "3.1 The petitioner No. 1 is a private limited company incorporated under the provisions of the Indian Companies Act, 1956. The petitioners Nos. 2 and 3 are its directors. The respondent No. 1 is a State Bank of India which is a nationalised bank. The petitioners have availed of credit facilities from the respondent bank from time to time. However, according to the petitioners, since April, 2013, they were not in a position to repay the amounts which were due and payable to the bank on account of recession in the market and due to the financial crunch faced by them." 4. A proposal for restructuring of the loan amount was given to the respondent by letter dated 4.9.2013 and the respondents were called upon to regularise the account in order to avoid the possibility of the account being declared as a NPA account. 5. Thereafter, the State Bank of India initiated proceedings in view of the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. On 1.10.2013, they also issued notices to the petitioners as well as the guarantors und....
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....gh Court of Madhya Pradesh in Kumari Archana Chauhan v State Bank of India. AIR 2007 MP 45 had held the validity of the publication of photographs of wilful defaulters holding that such publication is in public interest and is not violative of the light of privacy of a person under Article 226 of the Constitution of India. 8. On the other hand, Mr. Chinoy, the learned senior counsel appearing on behalf of the respondents, submitted that the State Bank of India was not resorting to publication of photographs in a routine manner in each and every case. It was submitted that, however, in the present case, the board which took a decision regarding publication of photograph had after taking into consideration the material which was placed before it had come to the conclusion that the petitioners had committed various acts of misfeasance and had tried to divert the fund which was received by them by accepting them in cash and diverting it to other parties. Learned senior counsel invited our attention to paragraph 32 of the affidavit in reply filed by the State Bank of India and submitted that, as per the policy of the State Bank of India only in case of wilful defaulters and those who a....
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....e said Act. Rule 8 of the said Rules merely permits and allows the bank to publish the names of the wilful defaulters. 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. (2) The possession notice as referred to in sub-rule (1) shall also be published in two leading newspaper one in vernacular language having sufficient circulation in that locality, by the authorised officer. (3) In the event of possession of immovable property is actually taken by the authorised officer, such property shall be kept in his own custody or in the custody of any person authorised or appointed by him, who shall take as much care of the property in his custody as a owner of ordinary prudence would, under the similar circumstances, take of such property. (4) The authorised officer shall take steps for preservation and protection of secured assets and insure th....
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....o the public at large and, secondly, it also tends to caution the prospective buyers who may be offered the property which is mortgaged by these defaulters with the bank. This being the primary objective for the publication of the notice, in our view, there would no impediment in publication of photographs of wilful defaulters and particularly those defaulters who have committed various acts of misfeasance. 12. In the affidavit in reply filed by the State Bank of India they have stated in paragraph 16 various acts of misfeasance purportedly committed by the petitioners therein. It is stated that the petitioners have failed to pay interest and the loan amounts and that they admitted their default in the letters which were addressed to the bank. Secondly, it is contended in the affidavit in reply that the conduct of the petitioners was not bona fide, fair and honest. The report which was received by the bank suggested that the petitioners had tried to divert the sale proceeds by (a) squaring off sales against purchases made by the company, (b) by collecting cash against sales realization from the debtors/buyer instead of routing the sales receipts through bank transaction. Thirdly, ....
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....ers power on the Central Board of Directors of the Bank to make regulations in order to provide for all matters for which provision is necessary or convenient for the purpose of giving effect to the provisions of the Act. It seems to us clear that it is not only convenient but manifestly necessary to provide for the service conditions of the Bank's staff in order to give effect to the provisions of the Act. The Act was passed in order to constitute a bank for achieving economic purposes of the highest national importance: regulating the issue of bank notes, keeping reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage. It is, in our view, not open to any question either on the basis of reason or authority that the power to provide for service conditions of the staff is at least incidental to the obligation to carry out the purposes for which the bank was constituted. As observed in Armour v Liverpool Corporation (1939) Ch. 422,434,435: To assist in removing from the minds of its employees the fear of an unprotected old age, to foster their happiness and contentment, and to procure th....