1992 (4) TMI 249 - HC - Income Tax

Summary

Issues Involved:
1. Validity of Ext. P4 letter dated 10-9-1991.
2. Obligation of the bank to maintain confidentiality under Section 52 of the State Bank of India (Subsidiary Banks) Act, 1959.
3. Applicability of Section 6 of the Bankers' Books Evidence Act, 1891.
4. Public interest and duty of the bank to disclose information.

Detailed Analysis:

1. Validity of Ext. P4 Letter Dated 10-9-1991:
The appellant, a public sector undertaking, challenged the Ext. P4 letter from the State Bank of Travancore, which refused to disclose details of the third respondent's account, citing statutory obligations to maintain secrecy. The court examined whether the bank's refusal was justified under the law. The judgment concluded that the bank's reliance on Section 52 of the State Bank of India (Subsidiary Banks) Act, 1959, did not provide absolute protection, thus quashing Ext. P4 and directing the bank to furnish the requested details.

2. Obligation of the Bank to Maintain Confidentiality:
The court analyzed Section 52 of the State Bank of India (Subsidiary Banks) Act, 1959, which imposes a duty of fidelity and secrecy on the bank, with exceptions for disclosures required by law or customary banking practices. It was noted that the duty of secrecy is not absolute and is subject to exceptions like legal compulsion, public duty, bank's interest, and customer consent. The court highlighted that public interest in the proper use of public funds supersedes the private duty of confidentiality.

3. Applicability of Section 6 of the Bankers' Books Evidence Act, 1891:
The court addressed whether the appellant's request for account details could be accommodated under Section 6 of the Bankers' Books Evidence Act, 1891, which allows inspection of bank books for legal proceedings. The court concluded that the current case did not fall within the scope of Section 6 as there was no main proceeding pending that necessitated such inspection. However, the court recognized the appellant's need for information to comply with a High Court judgment, thus justifying the request outside the typical application of Section 6.

4. Public Interest and Duty of the Bank to Disclose Information:
The court emphasized that the appellant, a public sector undertaking, was dealing with public funds, and ensuring these funds were not misused was a matter of public interest. The court held that public interest in recovering potentially misused funds justified overriding the bank's duty of confidentiality. The court also recognized the appellant's obligation to comply with a High Court judgment, which necessitated obtaining the requested information.

Conclusion:
The court allowed the writ appeal, setting aside the learned single judge's judgment, and quashing Ext. P4. The court directed the bank to provide details of the third respondent's account, emphasizing the public interest in ensuring proper use of public funds and the appellant's need to comply with judicial directives. The appeal was allowed without any order as to costs.