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2018 Supreme(Mad) 974
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S. MANIKUMAR, V. BHAVANI SUBBAROYAN, JJ.
M. Aruvi – Petitioner
Versus
Reserve Bank of India Chennai & Another – Respondents
W.P. No. 35085 of 2014 & M.P. Nos. 1 & 2 of 2014
Decided On : 12-04-2018
For the Respondent:J. Senthil Kumar, Advocate.
The main legal point established in the judgment is that the right to privacy is not absolute and can be superseded by the duty of banks to maintain secrecy and larger public interest, as well as the statutory authorization for banks to publish the photographs of defaulters.
Headnote:
Right to Privacy - Banking - SARFAESI Act, 2002, Rule 8 - The court discussed the right to privacy in the context of banking and the authority of banks to publish the photographs of defaulters. The court referred to various judgments and legal provisions, including the SARFAESI Act, 2002, and the Right to Information Act, 2005, to conclude that the right to privacy is not absolute and can be superseded by the duty of banks to maintain secrecy under certain circumstances. The court also highlighted the statutory authorization for banks to publish the photographs of defaulters and emphasized the larger public interest in such cases.
Fact of the Case:
The Jammu & Kashmir Bank Limited sent a recall notice to a borrower and guarantors, threatening legal action for misutilization of funds. The borrower filed a writ petition seeking a declaration that the bank is not authorized to publish their name and photographs in newspapers, citing violation of Article 21 of the Constitution of India.
Finding of the Court:
The court dismissed the writ petition, stating that the right to privacy is not absolute and can be superseded by the duty of banks to maintain secrecy and larger public interest. The court also emphasized the statutory authorization for banks to publish the photographs of defaulters.
Issues: The main issue was whether the bank is authorized to publish the name and photographs of defaulters in newspapers, and whether such publication violates the right to privacy under Article 21 of the Constitution of India.
Ratio Decidendi: The court held that the right to privacy is not absolute and can be superseded by the duty of banks to maintain secrecy and larger public interest. The court also emphasized the statutory authorization for banks to publish the photographs of defaulters.
Final Decision: The writ petition was dismissed, and the court held that the bank is authorized to publish the name and photographs of defaulters in newspapers, emphasizing the larger public interest in such cases.
S. Manikumar, J
On 07.12.2014, the Jammu & Kashmir Bank Limited has sent a letter to M/s.Orchid Foundation, Chennai, the borrower and the guarantors, which is extracted hereunder
"Dear Sir,
Re: Recall Notice.
Refer to our various reminders, telephonic conversation; we have repeatedly and regularly advising you to regularize the account as it is showing the unwanted and undesirable signs.
On your request, the bank of 15.02.2013 sanctioned a cash credit facility of Rs.120.00 lacs in the name of M/s.Orchid Foundation (Proprietorship concern of Mrs.Aruvi) to meet the working capital requirements. But, surprisingly after availing the credit facility, the conduct of the account not remained satisfactory. The sales have not been routed through this account in spite of repeated reminders.
Since the inception the conduct of the account has remained unsatisfactory and you are even defaulting in servicing of interest. And it is evident that you have misutilized the funds of the bank, amounting to gross violation of law.
Now you are once again advised in your own interest to regularize the account without further delay, failing which the bank shall be constrained to initiate legal action against you as well as your guarantors for misutilization of funds.
----Sd----
Branch Head.
The Guarantors and Charted Accountant are also responsible for Misutilization of Funds and we are also planning action against them in consultation with senior advocates as well as other agencies handling such cases, besides publication in local as well as national papers. As such one last chance is being given to them to get this account regularized by Friday i.e. 12th of December 2014.
----Sd----
Branch Head.
2. Apprehending that the photographs of the borrower and others would be published in newspapers and contending inter alia that such publication would be violative of Article 21 of the Constitution of India, instant writ petition has been filed for a declaration, declaring that the respondents are not authorized to publish the name, photographs of the Loanee viz., the petitioner herein in any Newspapers both Local Newspapers as well as National Newspapers and that such publication will be in violative of Article 21 of the Constitution of India.
3. The issue as to whether Banks are empowered to publish the photographs of the borrowers/guarantors, who have defaulted in making payments, in dailies and electronic media, is no longer res integra.
4. After considering a catena of judgments relating to right to privacy, constitutional provisions, Universal Declaration of Human rights, dealing with privacy, the bankers obligation to maintain secrecy qua its customer, decided in Shankarlal Agarwalla Vs. State bank of India (AIR 1987 Calcutta 29) and other decisions, in K.J.Doraisamy Vs. The Assistant General Manager, State Bank of India, Erode branch and another {2006 (5) CTC - 829}, a learned Single Judge of this Court, at paragraph Nos.25 to 32, held as follows:
“25. Once it is seen that the right to privacy is not an absolute or inviolable right, then the next question that falls for consideration is as to whether the Bank, with whom the customer has a fiduciary relationship, is entitled to disclose or publicise the information in their possession, resulting in a breach of the duty of secrecy and confidentiality. Dealing with the duty of the Bank to maintain secrecy qua its customer, it was held in Shankarlal Agarwalla -vs.- State Bank of India (AIR 1987 Calcutta 29), as follows:
“10. The Banker is under an obligation to secrecy. According to Lord Halsbury's Laws of England 4th Edn. Vol.3 p.72 Article 97.
"It is an implied term of the contract between a banker and his customer that the banker will not divulge to third person without the express or implied consent of the customer either the state of the customer's account or any of his transactions with the bank or any information s relating to the customer acquired through the keeping of his account unless the banker is c
