There is no legal bar for Banks to publish the Photographs of wilful defaulters : Madhya Pradesh HC [Read Order]

There are conflicting Judgments of various High Courts in this issue

The High Court of Madhya Pradesh in M/S Prakash Granite Industries vs. The Punjab National Bank, has reiterated that, it is within the propriety of the Bank to publish a photograph of defaulter in newspaper in the event of failure on the part of such borrowers.

Justice Sanjay Yadav dismissed a Writ petition holding that it is within the powers of the Bank to take such action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Court followed its decision in Ku. Archana Chauhan vs. State Bank of India AIR 2007 MP 45.

The court observed: “This Court is in respectful agreement with the view taken by the Division Bench of Bombay High Court in D.J. Exim (India) Pvt. Ltd. (supra) that it is within the discretion of the Bank to publish the photograph of defaulter in the newspaper. However, there being a difference between defaulter and wilful defaulter, this Court has no manner of doubt that the respondent-Bank exercises the discretion judiciously and objectively by taking into consideration the respective individual borrower(s).”

The Division Bench of Bombay High Court in D.J Exim case had held as follows: “Rule 8 specifically authorised the bank to publish the names and addresses of the wilful defaulters. There is no legal bar either in the said rule or under any provisions of the Act which expressly prohibits the bank from publication of photographs and therefore the action of the bank in publishing the photographs cannot be held to be ultravires.”

But Calcutta High Court in Ujjal Kumar Das and Another v. State Bank of India held that publishing the photographs of loanees is not a mode contemplated under the SARFAESI Act. Kerala.

Following the Calcutta Judgment Justice V.Chitambaresh of Kerala High Court in Venu. P.R Vs. SBI [2013(3) KLT 691] held that practice of exhibiting a photograph of a person and shaming him in public for the sin of being in an impecunious condition cannot be encouraged in a civilised society like ours.

Read the order here.