|"Banker entitled to invent novel methods to recover dues"|
CHENNAI: There is no violation of any right or legal provision in a bank's threat to publish photographs of borrowers and surety for non-payment of loans, the Madras High Court has ruled.
Dismissing a writ petition from a borrower, urging the court to forbear the State Bank of India from publishing photographs of debtors in a newspaper or magazine, Justice V. Ramasubramanian pointed out that if borrowers could find newer and newer methods to avoid repayment, the banker was also entitled to invent novel methods to recover the dues.
The statutory rules themselves provided for a notice not merely to the defaulting borrower but also to the public in general. Therefore, the threat held out by the bank to publish the photograph of the borrower and the surety was also duly authorised like other statutory rules.
Mr. Justice Ramasubramanian, citing the laws of other countries, said that even the English law recognised that the duty of the bank to disclose information to the public or its interest requiring disclosure superseded the duty of secrecy.
With the advent of the Right to Information Act, 2005, the bank became obliged to disclose information to the public and the provision in the Act left no room for any doubt that the right to privacy would fade before the right to information and the larger public interest.
In the background of an increasing trend among borrowers to avail themselves of loan and then default, only to bargain later for the waiver of a portion of the interest, and a portion of the principal if possible, the banks and financial institutions were compelled to device an innovative method to secure their interests and recover the dues, the judge said.
The petitioner, K.J. Duraisamy of Erode, had borrowed a term loan of Rs. 6 lakh from the State Bank of India in May 2000. But, on default, the SBI issued a notice under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act in February 2006.
The bank also issued a notice in May 2006, threatening to recover the loan by enforcing the security and bringing it to sale by publishing property details as well as the photographs of the borrower and the surety in Tamil and English newspapers.
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