2015 (3) TMI 438 - HC - Companies Law

Power of Banks to publish the photograph of loanees/defaulters in newspapers - Against the fundamental rights under Article 21 of the Constitution of India - Held that - The Supreme Court referring to the human dignity as an intrinsic value of every human being has held in M. Nagaraj case 2006 (10) TMI 420 - SUPREME COURT that The expression of 'life' in Article 21 does not connote merely physical or animal existence. The right to life includes right to live with human dignity. Also in case of S.Samuthiram 2015 (2) TMI 1021 - SUPREME COURT held that Every citizen in this country has the right to live with dignity and honour which is a fundamental right guaranteed under Article 21 of the Constitution of India .Even the right to privacy of the loanees enshrined under Article 21 of the Constitution of India is infringed to a certain extent as is evident by the following observations in Mr. X TOKUGHA YEPTHOMI 1998 (9) TMI 650 - SUPREME COURT . There is nothing immoral in being unable to repay the loans availed of owing to the floundering of business or due to some other unavoidable reason which can enable the bank to infringe the right to privacy of loanees. There is no compelling public interest warranting the publishing of the photographs of the loanees in newspapers in which case only the right to privacy has perhaps to give way. Some of the loanees may even be driven to commit suicide for fear of ignominy on publishing their photographs in newspapers at the instance of the bank and it will remain a permanent taboo for their family. The publishing of the photographs in newspapers for the inability to clear the loan arrears to the bank in time is clearly an affront to the right to live with dignity and honour as well as the right to privacy of the loanees. I have no hesitation to hold that publishing the photographs by the bank under such circumstances is violative of the rights guaranteed to the loanees under Article 21 of the Constitution of India. A writ of prohibition is therefore issued restraining the bank from publishing the photographs of the petitioners in the leading newspapers for failure to repay the debt within a specified date. This will not however disable the bank from surging ahead with the proceedings already initiated or anew for realisation of its dues from the petitioners in any manner sanctioned by law. -Decided in favour of appellants.

Summary

Issues Involved:
1. Propriety of the bank publishing photographs of loanees in newspapers.
2. Legislative sanction for the bank's proposed action.
3. Violation of fundamental rights under the Constitution of India.
4. Validity of the bank's reliance on loan agreements for publishing photographs.
5. Judicial precedents from other High Courts.

Detailed Analysis:

1. Propriety of the bank publishing photographs of loanees in newspapers:
The judgment begins by addressing the central issue of whether the bank's action of threatening to publish the photographs of loanees in newspapers, thereby affecting their dignity, is proper. The court emphasizes that every individual deserves a certain amount of dignity, irrespective of their financial status.

2. Legislative sanction for the bank's proposed action:
The court notes that while the bank is entitled to file suits or initiate proceedings under various acts such as the SARFAESI Act, 2002, and the Kerala Revenue Recovery Act, 1968, there is no provision in these enactments that allows the bank to threaten loanees with the publication of their photographs in newspapers. The judgment points out that such an action is not a measure permitted under Section 13(4) of the SARFAESI Act, and there is no legislative sanction for this practice.

3. Violation of fundamental rights under the Constitution of India:
The court extensively discusses the violation of fundamental rights guaranteed under Article 21 of the Constitution of India. It refers to several Supreme Court judgments to underline that the right to life includes the right to live with human dignity and that the right to privacy is an essential component of the right to life. The court concludes that publishing the photographs of loanees would infringe on their right to live with dignity and honor, as well as their right to privacy, and is therefore violative of Article 21.

4. Validity of the bank's reliance on loan agreements for publishing photographs:
The bank's reliance on specific clauses in the loan agreements to justify its proposed action is scrutinized. The court finds that the clauses in the loan agreements at best empower the bank to disclose information to Credit Information Companies but do not authorize the publication of photographs in newspapers. Furthermore, the court asserts that even if such a clause existed, it would not estop the loanees from challenging the bank's action on the grounds of violation of their fundamental rights.

5. Judicial precedents from other High Courts:
The judgment references decisions from the High Courts of Madras, Madhya Pradesh, and Kolkata. While the Madras and Madhya Pradesh High Courts had upheld the bank's right to publish photographs, the Kolkata High Court had disapproved of it. The court respectfully disagrees with the conclusions of the Madras and Madhya Pradesh High Courts and aligns with the Kolkata High Court's decision, albeit for different reasons. It emphasizes that shaming individuals in public for their financial incapacity is not acceptable in a civilized society.

Conclusion:
The judgment concludes with a writ of prohibition restraining the bank from publishing the photographs of the petitioners in newspapers. However, it clarifies that this does not prevent the bank from pursuing other lawful methods to recover its dues. The writ petitions are allowed, with no costs awarded.