Demonstration By Bank Officials In Front Of Defaulter's House Violates His Right To Privacy: Kerala HC

Banks have to take recourse to legal remedies for recovery of loan arrears. They cannot carry out "halla bol" or similar demonstrations in front of the house of a borrower. This observation was made by the High Court of Kerala in a petition which challenged such 'innovative' methods adopted by banks.

The petition was filed by one Anil Kumar, who had availed a 'Mudra Sishu Loan' of Rs.50,000/- from the Corporation Bank. According to him, an amount of Rs.25,105/- was outstanding in the account, including accrued interest. He alleged that the Chief Manager of the Bank along with a group of nearly 10 employees marched to his house, holding placards "refund public money". He was deeply aggrieved by such public protests, and wrote a letter to the bank complaining about it. However, the bank maintained that it had the right to do, and declared that it will hold "halla bol" protests at frequent intervals until arrears are cleared.

When the petition came for admission, Justice Dama Seshadri Naidu passed the following order :

"The bank can still have its legal methods of recovery. The Court does not come in the way. But its officials cannot conduct any sort of "halla bol" demonstration in front of the petitioner's house. Prima facie, it affects petitioners right to privacy - a most cherished fundamental, though unenumerarted right".

Earlier, the High Court of Kerala had held that banks cannot "name and shame" a loan defaulter by publishing his photographs, as per a judgment given by Justice V Chitambaresh(Venu P.R v. SBI 2013(3) KLT 691). However, the Madhya Pradesh High Court has taken a contrary view, and  held that there was no bar in publishing photographs of defaulters.