IMPORTANT POINT
SARFAESI Act and rules framed thereunder not having conferred any power on secured creditors to publish photographs of defaulting borrower(s)/guarantor(s).

Dipankar Datta, J.—Whether or not a secured creditor, which has initiated action for enforcement of its security interest in terms of the provisions of the Securitisation and Reconstruction of Financial Asset and Enforcement of Security Interest Act, 2002 (hereafter the SARFAESI Act), is entitled to publish the photograph(s) of the defaulting borrower (s)/guarantor(s) in newspapers/magazines etc. is the common question that arises for an answer on these two writ petitions. In view thereof, these two writ petitions were heard one after the other and shall stand disposed of by this common judgment and order.

2. Mr. Banerjee and Mr. Tiwari, learned advocates representing the two sets of petitioners contended that publication of photograph(s) of the defaulting borrower(s) and guarantor(s) as a measure for recovery of the secured debt does not enjoy legislative sanction and, therefore, the secured creditors may be permanently restrained from proceeding in that direction.

3. Mr. Sinha, learned advocate representing the secured creditor in W.P. 10315(W) of 2013 relied on the decisions of the Madhya Pradesh and Madras High Courts in Ku. Archana Chauhan v. State Bank of India, Jabalpur1 and Mr. K.J. Doraisamy v. the Assistant General Manager, State Bank of India, Erode Branch2, respectively to urge that the point raised by the petitioners in these two writ petitions is no longer res integra. Both the Courts have, in unambiguous terms, held that publication of photographs of the defaulting borrowers is not prohibited by the SARFAESI Act and, therefore, cannot be held to be impermissible.

4. It is also submitted by him, by inviting reference to a letter of the Deputy General Manager, Reserve Bank of India (hereafter the RBI) dated July 12, 2007 addressed to the Chairman, State Bank of India (hereafter the SBI), that publication of photographs of defaulting borrowers have been permitted and, therefore, there is no infirmity in the impugned action whereby the petitioners have been threatened with publication of their photographs, should they fail to repay the loan within the time fixed by the bank.

5. He, accordingly, prayed for dismissal of the writ petition.

6. Mr. Rai, learned advocate for the secured creditor in W.P. 9850(W) of 2013, also relied on the decisions in Archana Chauhan (supra) and K.J. Doraisamy (supra) in support of the impugned action.

7. Additionally, he contended that the first ground on which the impugned act of threatening to publish photographs, names and addresses of the defaulting borrowers in the newspapers could be faulted is that it is coercive. Referring to Section 15 of the Contract Act, 1872 defining coercion, he contended that the act complained has to fall within any of the mischief mentioned therein. The expression “any act forbidden by the Indian Penal Code” (hereafter the IPC) would require consideration of the provisions thereof and the only forbidden act that could be relevant for the present case or could be complained of as having been committed by the secured creditor in the given fact situation is ‘defamation’. One has therefore to look to Section 499 of the IPC. According to him, publication of photograph clearly falls within the first exception provided in Section 499 of the IPC and, therefore, it cannot be said to be a defamatory act. The petitioners having borrowed money from the secured creditor and they having defaulted in repayment thereof leading to classification of their loan account (cash credit) as non-performing asset, the publication, if made, would therefore be a true account of the situation. To bolster his contention that it is for the ‘public good’, Mr. Rai submitted that although the expression ‘public good’ has not been defined in the IPC, the Supreme Court defined the expression ‘public interest’ relying on the definition/meaning of the expression given in Stroud’s Judicial Dictionary and Black’s Law Dictionary while pronouncing its decision reported in (2004) 3 SCC 349