Money & Banking

Publishing photographs of defaulters in newspapers illegal: Kerala High Court

Kochi | Updated on August 13, 2013 Published on August 13, 2013

The Kerala High Court has held as arbitrary and illegal the decision of the State Bank of India to publish the photographs of loan defaulters in newspapers.

Allowing writ petitions filed by two defaulters against the SBI notice, the court on Tuesday observed that the threat held out by banks to publish the photographs of defaulters in newspapers lacked legislative sanction.

Justice V. Chitambaresh said: “The practice of exhibiting a photograph of a person and shamming him in public for the sin of being in an impecunious condition cannot be encouraged in civilised societies like ours.”

The judge further observed that there was nothing immoral in their failure to repay the loans owing to a floundering business or other unavoidable reasons.

The court added that some of the borrowers might even be driven to commit suicide fearing ignominy on account of their photographs being published in newspapers. “It will remain a permanent taboo for their family,” the court observed.

The move was clearly an “affront to the right to live with dignity and honour as well as the right to privacy of the loanees”.

Such publication of photographs therefore, violates the rights guaranteed to the loanees under Article 21 of the Constitution of India, the court held.

SBI’s stand

However, the SBI justified its stand saying the terms and conditions of the loan agreements allowed them to publish defaulters’ photographs in newspapers.

But the court pointed out that the clause in the agreement at best empowered the bank to reveal only the names of borrowers in the print media or to disclose the information and details relating to the credit facility.

Even if there was such a permissive clause, the loanees would “not (be) stopped” from challenging the action of a bank “on the ground of violation of fundamental rights of loanees”, the court said.

The court also pointed out that there was no provision in the Security Interest (Enforcement) Rules (SARFAESI) that enables banks to threaten to publish photograph of defaulters.

Published on August 13, 2013
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