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Ujjal Kumar Das vs SBI decided on 03.05.13 by Calcutta High Court Writ Petition No – 10315 of 2013

Bench: Mr Justice Dipankar Datta

DRT Solutions Citation –  DRTS-021-Ujjal Kumar vs SBI-2013

We have now numbered the Judgments published on this web site as DRTS-00. Accordingly all the judgments published so far have been numbered. The judgment on this page is numbered as DRTS-021.

Comments by DRT Solutions

The above mentioned Calcutta High Court Judgment of 2013 lays down that Publication of Photographs of the Defaulting Borrowers in news papers is not permissible in terms of the Securitization Act or any other law

Utility of this Judgment – Whenever the banks threaten to publish the photographs of the borrowers, the law pronounced in this judgment be pointed out to the Banks and in case of disagreement, the matter be put up before the DRT. If there is any adverse decision, matter be taken up in higher courts based on this judgment.

Comments 

The full text of the judgment is given below which is self explanatory. Important portions have been marked in Red. Our comments are as under:-

(a)   Past several years, many of our clients have been facing the threat of the banks to pubish their photographs in the news papers. We have been advising them to file injunction suits in the court of law. In some instances, injunctions have been granted. In some cases when the courts have not granted such injunctions, the Reviews and Appeals have been filed.

(b)   Even two High Courts have delivered judgments against our contentions viz MP High Court in the matter of Archana Chauhan and Madras High Court in the matter of K.J. Doraisamy.

(c)   But now this judgment has supported our contentions.

(d)   Extract from the marked Red portions of the following judgment is reproduced below:-

(18) With the deepest of respect I have for the learned Judges who decided the writ petitions in Archana Chauhan (supra) and K. J. Doraisamy (supra), I have failed to persuade myself to agree with Their Lordships.

(20) In my humble view, the opinions recorded in the paragraph extracted supra are neither backed by any reason nor can be supported with reference to any provision of the SARFAESI Act or the rules framed thereunder.

(25) - - -There is little doubt that the SARFAESI Act confers wide powers on the secured creditors to enforce the security interest without judicial intervention up to the stage of taking measures under Section 13(4) thereof. Classification of a loan account as non-performing asset, computation of the quantum of dues and taking over possession of the secured asset upon rejection of the response to the notice under Section 13(2) are the various steps that are required to be taken for enforcing the security interest. In course thereof, the secured creditors may not ordinarily face interference by the courts, since the vires of the SARFAESI Act has been upheld. It is only at the stage of Section 17(1) thereof that there is scope for a judicial determination of the issues raised by a borrower/guarantor by the Debts Recovery Tribunal having jurisdiction. Till such time the Tribunal is approached and requested to consider a prayer for interim relief, it is a totally one-sided affair. The secured creditor unilaterally decides whether one is a defaulter or not and further as to whether the photograph of such defaulter ought to be published or not. By no stretch of reasoning can I conceive of the SARFAESI Act conferring on the secured creditor the unfettered power to act in such manner. If it were accepted that the secured creditor enjoys the unfettered power of publishing the photograph of a defaulting borrower/guarantor and does so even before the Tribunal under Section 17 of the SARFAESI Act could be approached, and quite some time thereafter the Tribunal under sub-section (3) of Section 17 holds that the secured creditor had acted contrary to the other provisions thereof while enforcing the security interest under sub-section (4) of Section 13 and ultimately directs restoration of possession, the damage that could be caused to the reputation and dignity of an honest borrower/guarantor by reason of publication of his photograph in the interregnum would be irretrievable. It may not be possible to compensate such damage by money, if a borrower/guarantor, who has been proceeded against contrary to law by the secured creditor and whose photograph is published, is unable to bear the ignominy and takes a drastic step. Since publication of photograph of a defaulting borrower/guarantor has the potential of exposing him to irreparable loss, injury and prejudice, publication of photograph cannot be resorted to in the absence of an express power or an agreed term in this behalf.

 

IN THE HIGH COURT AT CALCUTTA

CONSTITUTIONAL WRIT JURISDICTION APPELLATE SIDE

Present : The Hon’ble Justice Dipankar Datta

W.P. 10315 (W) of 2013

Ujjal Kumar Das & Anr.

Versus

State Bank of India & Ors.

With

W.P. 9850 (W) of 2013

Messrs Allianz Convergence Private Limited & Ors.

Versus

The General Manager, State Bank of India & Anr.

For the petitioner in : Mr. Suddhasatva Banerjee, Advocate W.P. 10315(W) of 2013 Mr. Deboki Nandan Maity, Advocate For the petitioner in : Mr. M.S. Tiwari, Advocate W.P. 9850(W) of 2013 Mr. Sailendra Tiwari, Advocate Mr. Dharmendra Tiwari, Advocate

Mr. R.K. Pandey, Advocate

For the respondents in : Mr. Subrata Kumar Sinha, Advocate W.P. 10315(W) of 2013 Mr. Sudip Pal Chowdhury, Advocate For the respondents in : Mr. O.N. Rai, Advocate W.P. 9850(W) of 2013 Mr. P.K. Roy, Advocate Mr. D.K. Singh, Advocate

Hearing concluded on : April 9, 2013.

Judgment on : May 3, 2013.

1) 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 thephotograph(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, reported in AIR 2007 Madhya Pradesh 45 : Ku. Archana Chauhan v. State Bank of India, Jabalpur and [2007 136 Comp. Cas 568 (Mad) : Mr. K.J. Doraisamy v. the Assistant General Manager, State Bank of India, Erode Branch, 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 moneyfrom 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 : Ashok Kumar Pandey v. State of West Bengal. Taking a cue therefrom, he proceeded to submit that publication of photographs, names and addresses of the defaulting borrower(s)/guarantor(s) in the newspapers by public sector banks is really a step satisfying public interest and can be termed as an act for ‘public good’ for good reasons. India had a fairly well developed commercial banking system in existence at the time of independence in 1947. The RBI was established in 1935. While the RBI became a state owned institution from January 1, 1949, the Banking Regulation Act was enacted in 1949 providing a framework for regulation and supervision of commercial banking activity. The first step towards the nationalization of commercial banks was the result of a report (under the aegis of the RBI) by the Committee of Direction of All India Rural Credit Survey (1951), which till today is the locus classicus on the subject. The Committee recommended one strong integrated state partnered commercial banking institution to stimulate banking development in general and rural credit in particular. Thus, the Imperial Bank of India was taken over by the Government and renamed as the SBI on July 1, 1955 with the RBI acquiring overriding substantial holding of shares. A number of erstwhile banks owned by princely states were made subsidiaries of the SBI in 1959. Thus, the beginning of the plan era also saw the emergence of public ownership of one of the most prominent of the commercial banks. Political compulsion then partially attributed to inadequacies of the social control, led to the Government of India nationalizing 14 major scheduled commercial banks in 1969, which had deposits above a cut-off size. In a somewhat repeat of the same experience, eleven years after nationalization, the Government announced the nationalization of six more scheduled commercial banks above the cut-off size. The objective was to serve better the needs of development of the economy in conformity with national priorities. This very objective, according to him, is frustrated if public sector banks are compelled to have a stock pile of non-performing assets. He referred to the decision of the Supreme Court reported in AIR 2007 SC 712 : Transcore v. Union of India, wherein it was observed that non-performing asset is cost to the economy. It is, therefore, the duty of the public sector banks to reduce such cost by resorting to every possible legal means. The SARFAESI Act is one of such means, which provides effective and quicker procedure for recovery of the dues of the secured creditor in cases where the borrower’s account has been classified as non-performing asset.

8) It was further submitted by Mr. Rai that the other means to reduce such cost is dissemination of information as regards willfully defaulting borrowers to other banks and financial Institutions so that they may get alert and refrain from extending credit facilities to the defaulting borrowers. The RBI has already felt and recognized the need for such dissemination of information as regards willfully defaulting borrowers to other banks and financial institutions and has put in place a mechanism therefor by directing the banks and financial institutions to forward information as regards willfully defaulting borrowers to Credit Information Bureau of India Limited. Such being the situation, publication of information (photographs, names and addresses) of defaulting borrowers in the newspapers by public sector banks would only quicken the process of dissemination of information, which cannot be said to be illegal; more so, since such act of publication has not been prohibited by any of the legislations relating to recovery of the secured creditor’s dues.

9) Furthermore, such publication of information (photographs, names and addresses) of defaulting borrowers in the newspapers by public sector banks would act as a deterrent for would be borrowers seeking financial assistance with the evil intention to evade repayment and keep them away from the national financial system. Such deterrent measures to stave/fend off potentially defaulting borrowers from the national financial system are the need of the hour inasmuch as the Indian economy continues to be challenged by the ongoing financial crisis which started as a result of debt fuelled consumption.

10) The prohibition contained in the general law of contract and the penal law, it was submitted, is thus inapplicable to the facts of the present case or such similar cases.

11) The next point, which according to Mr. Rai deserves consideration, is that the banks share a fiduciary relation with their customers and are, therefore, obliged to maintain secrecy of the customer’s accounts. The duty to maintain secrecy as aforesaid which arises from the contract between the bank and its customer is, however, not absolute but is a qualified one subject to reasonable exceptions. One of such exceptions is a case where a duty higher than the private duty is involved. Referring to the decision reported in AIR 1987 Calcutta 29 : Shankarlal Agarwalla v. State Bank of India, it was submitted that this Court approved of such exception. Moreover, in its decision reported in AIR 1992 Kerala 351 : Kattabomman Transport Corporation Ltd. v. State Bank of Travancore, the Kerala High Court also observed that in cases where public fund is involved, the bank’s public duty would prevail over its private duty to the customer.

12) Finally, it was submitted that information about loan defaulters would have the impact of alerting the citizens not only about those who are defaulting on repayments but also about the fact that a willful defaulter would be similarly treated. It could thus lead to safeguarding economic and moral interests of the nation. The benefits accruing to the economic and moral fibre of the country far outweighs any damage to the fiduciary relationship of bankers and their customers.

13) The writ petition, Mr. Rai urged, should therefore be dismissed.

14) I have heard the parties and perused the decisions cited at the bar.

15) The reasons assigned by the learned Judges of the Madhya Pradesh and the Madras High Courts ought to be noticed at this stage, for, if I agree therewith, the writ petitions would merit dismissal in limine.

16) In Archana Chauhan (supra), the learned Judge observed as follows:

2. With respect to the photographs, in the opinion of this Court publication of photographs of the borrowers cannot be said to be impermissible mode. Action cannot be said to be arbitrary or illegal in any manner. It cannot be said to be defamatory publication made, hence I find no ground to quash the publication (P-3).

17) The learned Judge of the Madras High Court in K.J. Doraisamy (supra) examined the issue from the angle of the right to privacy that every individual is entitled to claim as well as information that one could seek under the Right to Information Act, 2005 (hereafter the RTI Act). The relevant passages from the decision read as follows:

29. The above discussion makes it clear that from the point of view of the individual, his right to privacy is not absolute and from the point of view of the Bank, the duty to maintain secrecy is superceded by a larger public interest as well as by the Bank’s own interest under certain circumstances.

30. Coming to the authority of law, by which the Bank may be allowed to publish the photograph of the defaulter, it is seen that Section 13(4) of the Sarfaesi Act authorizes the Bank to take possession of the secured asset and sell it. The procedure for such sale is prescribed under Rule 8 of the Security Interest (Enforcement) Rules, 2002. Sub-rule (1) of Rule 8 reads as under:

’8. Sale of immovable secured assets. – (1) Where the secured asset is an immovable property, the authorised officer shall take or cause to be taken possession, by delivering a possession notice prepared as nearly as possible in Appendix IV to these rules, to the borrower and by affixing the possession notice on the outer door or at such conspicuous place of the property. Appendix IV to the said Rules which contains the Form in which the Possession Notice is to be issued by the Bank, steers clear any doubt that one may have. Para 2 and 3 of the Format of Notice under Appendix IV reads as follows:

The borrower having failed to repay the amount, notice is hereby given to the borrower and the public in general that the under signed has taken possession of the property described herein below in exercise of powers conferred on him/her under Section 13(4) of the said Ordinance read with rule 9 of the said Rules on this …. day …of the year ….. The borrower in particular and the public in general is hereby cautioned not to deal with the property and any dealings with the property will be subject to the change of the … (name of the Institution) for an amount Rs…. and interest thereon.’

Thus the statutory rules themselves provide 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, is also authorized by the statutory rules.

31. Lastly, with the advent of the Right to Information Act, 2005, the Bank has become obliged to disclose information to the public. Section 3 of the said Act entitles all citizens to a right to information. Section 4(2) of the said Act provides as follows:

’2. It shall be a constant endeavour of every public authority to take steps in accordance with the requirements of Clause (b) of Sub-section (1) to provide as much information suo moto to the public at regular intervals through various means of communications, including internet, so that the public have minimum resort to the use of this Act to obtain information.’

Public Authority is defined under Section 2(h) of the Act to include ‘any body owned, controlled or substantially financed’. Therefore, the respondent Bank is a Public Authority within the meaning of the Act and they owe a duty to disseminate information even suo moto.

Certain exemptions are listed out under Section 8 of the Right to Information Act, 2005, two of which are of significance and they read as follows:

’8. Exemption from disclosure of information:

1) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen – a) …..

b) …..

c) ……

d) ……

e) information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information;

f) ………

g) …..

h) ….

i) ….

j) Information which relates to personal information the disclosure of which has no relationship to any public activity or interest  or which would cause unwarranted invasion of the privacy of the individual unless the Central Public Information Officer or State Public Information Officer or the appellate authority as the case may be, is satisfied that the larger public interest justifies the disclosure of such information.’ Thus the aforesaid provision leaves no room for any doubt that the ‘Right to Privacy’ fades out in front of the ‘Right to Information’ and ‘larger public interest’.

32. If borrowers could find newer and newer methods to avoid repayment of the loans, the Banks are also entitled to invent novel methods to recover their dues. Moreover, the petitioner is not entitled to seek the relief of a writ of mandamus for the flowing reasons also:

(a) It is a fundamental principle of the Law of Writs that a Writ of Mandamus can be issued only to compel the performance of a statutory or public duty. But the prayer made in the present writ petition is to prevent the Bank from the performance of its public duty.

(b) What is challenged in the present writ petition, is a notice under Section 13 of the Sarfaesi Act.

The petitioner has a statutory remedy of appeal under Section 17 of the Act, without exhausting which, he is not entitled to invoke the writ jurisdiction of this Court.

Hence I find no violation of any right or legal provision in the threat held out by the respondent Bank to publish the photographs of the borrower and the surety for the non repayment of the loan. Consequently the writ petition fails and is dismissed. No costs. Consequently, connected miscellaneous petitions are also dismissed.”

18) With the deepest of respect I have for the learned Judges who decided the writ petitions in Archana Chauhan (supra) and K. J. Doraisamy (supra), I have failed to persuade myself to agree with Their Lordships.

19) The learned Judge deciding Archana Chauhan (supra) was of the opinion that publication of photographs is not an impermissible mode. It is neither arbitrary or illegal nor defamatory.

20) In my humble view, the opinions recorded in the paragraph extracted supra are neither backed by any reason nor can be supported with reference to any provision of the SARFAESI Act or the rules framed thereunder. It is settled law that broadly, every judgment of a superior courts has three segments, viz. (i) the facts and the point at issue; (ii) the reasons for the decision; and (iii) the final order containing the decision. The principle on the basis whereof a legal issue is answered forms the ratio decidendi of a judgment. It is the ratio decidendi of a judgment and not the conclusion that operates as a precedent. The principle, on the basis of which His Lordship reached the opinions as recorded, is conspicuous by its absence. Opinions, without anything more, cannot be of much persuasive value and hence I am left with no other option but to decline to be ad idem with the same.

21) The learned Judge while deciding K. J. Doraisamy (supra) was of the view that right to privacy is not absolute and that intrusion into privacy may be made by legislative provisions. For tracing the legislative provision that intrudes into the right of privacy, the learned Judge referred to Rule 8 of the Security Interest (Enforcement) Rules, 2002 (hereafter the Rules) and the contents of Appendix IV, being the form in which the notice of possession is required to be given. The learned Judge appears to be right in his observation that Rule 8 read with Appendix IV provides for a notice not merely to the defaulting borrower but also to the public in general, but fell in error in observing that the threat of the bank to publish the photograph of the borrower is also authorized by the statutory rules. Reading the relevant statutory rules as they presently stand, I am of the considered view that publication of photograph of a borrower is neither allowed by express provision nor by necessary implication. The public may be notified in terms of the statutory rules by issuance of notices in newspapers/magazines etc. giving the details of the borrower, the loan account, the location of the secured asset, its measurement, the quantum of secured debt, etc. but there is no provision in the SARFAESI Act or the rules framed thereunder authorizing the secured creditor to publish photographs of the defaulting borrowers.

22) Reliance placed by the learned Judge on the RTI Act, for concluding that it was the public duty of the secured creditor in that case to disseminate information regarding the defaulting borrowers, appears to be misplaced. While not disagreeing with the learned Judge that information relating to the defaulting borrowers could be made available to the public by a secured creditor, if it were a public authority within the meaning of Section 2(h) of the RTI Act, His Lordship appears to have missed the woods for the tree. A secured creditor, being a public authority, can make public so much of the information that it is authorized in terms of the SARFAESI Act. If the SARFAESI Act does not permit it to publish the photograph of a defaulting borrower, a fortiorari, such photograph cannot be published by taking aid of the RTI Act.

23) Lastly, the observations made in paragraph 32 extracted supra appear to me to be based on a misconception of statutory powers that are exercisable by a public authority. While a natural person has the liberty of indulging in any act of his choice unless such act is forbidden by law, for a public authority it is the other way round. It has no power to act in a particular manner unless it is authorized by law. The observation that the secured creditors are entitled to invent novel methods to recover their dues, because the borrowers are finding newer and newer methods to defraud the secured creditors, can never be countenanced. Should the Court allow the secured creditors to subvert the rule of law? If the observation is allowed to represent the correct position of law, a secured creditor on being resisted to take possession of the secured asset in terms of Section 13(4) of the SARFAESI Act read with Rule 8 of the Rules need not take recourse to Section 14 thereof and would be encouraged to use musclemen to overpower the borrower and take possession.

24) Law is well settled that the State or its executive officers cannot interfere with the rights of its subjects unless they could point to some specific rule of law authorizing the act of interference. It is also well settled principle of law that when a stature requires a thing to be done in a particular manner, it should be done in that manner alone or not at all. I proceed to hold on the said principle that a secured creditor is not free to take any action it wishes for enforcing its security interest; it is empowered and authorized to take such action that the statute permits it. There is absolute lack of legislative sanction in relation to publication of photographs of defaulting borrower(s)/guarantor(s). The SARFAESI Act and the rules framed thereunder not having conferred any power on the secured creditors to publish their photographs, they cannot resort to such action on the ground that publication of photograph is not prohibited. For the secured creditors, the test is not as to whether publication is prohibited by the statute but whether such publication is permitted by it. Prohibition has to be inferred in the absence of express authorization. If the arguments advanced by the respective learned counsel for the secured creditors were accepted, the secured creditors would have the carte blanche to invent any method for recovery of their secured debt throwing asunder the provisions of the SARFAESI Act.

25) That apart, the problem could be looked at and answered from a different angle. There is little doubt that the SARFAESI Act confers wide powers on the secured creditors to enforce the security interest without judicial intervention up to the stage of taking measures under Section 13(4) thereof. Classification of a loan account as non-performing asset, computation of the quantum of dues and taking over possession of the secured asset upon rejection of the response to the notice under Section 13(2) are the various steps that are required to be taken for enforcing the security interest. In course thereof, the secured creditors may not ordinarily face interference by the courts, since the vires of the SARFAESI Act has been upheld. It is only at the stage of Section 17(1) thereof that there is scope for a judicial determination of the issues raised by a borrower/guarantor by the Debts Recovery Tribunal having jurisdiction. Till such time the Tribunal is approached and requested to consider a prayer for interim relief, it is a totally one-sided affair. The secured creditor unilaterally decides whether one is a defaulter or not and further as to whether the photograph of such defaulter ought to be published or not. By no stretch of reasoning can I conceive of the SARFAESI Act conferring on the secured creditor the unfettered power to act in such manner. If it were accepted that the secured creditor enjoys the unfettered power of publishing the photograph of a defaulting borrower/guarantor and does so even before the Tribunal under Section 17 of the SARFAESI Act could be approached, and quite some time thereafter the Tribunal under sub-section (3) of Section 17 holds that the secured creditor had acted contrary to the other provisions thereof while enforcing the security interest under sub-section (4) of Section 13 and ultimately directs restoration of possession, the damage that could be caused to the reputation and dignity of an honest borrower/guarantor by reason of publication of his photograph in the interregnum would be irretrievable. It may not be possible to compensate such damage by money, if a borrower/guarantor, who has been proceeded against contrary to law by the secured creditor and whose photograph is published, is unable to bear the ignominy and takes a drastic step. Since publication of photograph of a defaulting borrower/guarantor has the potential of exposing him to irreparable loss, injury and prejudice, publication of photograph cannot be resorted to in the absence of an express power or an agreed term in this behalf.

26) The learned Judge’s further observation in K.J. Doraisamy (supra) that a writ of mandamus can be issued only to compel the performance of a statutory or public duty and not to prohibit performance of a public duty does not appear to me to be legally sound, in the given circumstances. It is not the public duty of a secured creditor to publish photograph of a defaulting borrower and, therefore, a writ of mandamus may well issue restraining it from indulging in an act which is manifestly unauthorized.

27) For the reasons aforesaid, I hold that the decisions in Archana Chauhan (supra) and K. J. Doraisamy (supra) are not persuasive precedents.

28) Since legislative sanction is absent, it would be an academic exercise to examine the other issue as to whether publication of photograph, even if it were authorized by the statute, would offend Article 21 of the Constitution or not. I allow the issue to rest here.

29) Adverting to the letter issued by the Reserve Bank of India, it appears that the decisions in Archana Chauhan (supra) and K. J. Doraisamy (supra) were duly noticed. It is considered necessary to reproduce the letter of the Deputy General Manager of the Reserve Bank of India in its entirety. The same reads as follows:

Wilful Defaulters – Publication of Photographs

Please refer to your letter No. CPP/KKK/120 dated June 06, 207 on the captioned subject.

2. In this connection, we advise that on a reference made to IBA, we have been advised by IBA vide their letter dated June 09, 2007 (copy enclosed) that publishing of photographs of defaulter borrowers had been challenged in two High Courts (Madras and Madhya Pradesh) in the recent past and in both cases the courts had upheld the action of banks. Banks resort to newspaper advertisement (giving known address, photographs etc.) only when their efforts to serve notices under the Act fail and communications sent to known postal addresses are returned undelivered.

3. Further, they have opined that banks exercise utmost care while dealing with this sensitive issue. While publishing photos of borrowers along with notices issued under SARFAESI Act of wilful defaulters/fraudsters etc. could be justified, it may not be desirable to consider publishing photographs of defaulter borrowers merely for the reason that dues are outstanding and as a matter of routine.

4. It may be added that the SARFAESI Act, 2002 does not mention about publication of photographs of defaulters. The Possession Notice provides for description of the immovable property more as a caution to the public at large not to deal with the property and any such dealings with the property will be subject to the charge of the Secured Creditor.

5. We, therefore, concur with the views of IBA in the matter that publishing of photographs of defaulters should not be resorted to as a matter of routine and utmost care is to be exercised while dealing with this sensitive issue.

You are requested to take necessary action in this regard.

30) The RBI was conscious, despite the decisions in Archana Chauhan (supra) and K. J. Doraisamy (supra), that the SARFAESI Act does not permit publication of photograph of a defaulting borrower. The letter at best can be regarded as an advice rather than expressing any direction or order, having the force of law. In fact, what the letter observes is to deal with the sensitive issue with utmost care. The same thus cannot also come to the rescue of Mr. Sinha.

31) Turning to the contentions raised by Mr. Rai, I record my appreciation for his valiant effort to defend the indefensible. The purpose(s) which the secured creditor(s) could achieve by publication of photograph(s) are no doubt laudable but as submitted by him, resort to legal means would only be permissible to cut down the losses suffered by the public sector banks and other financial institutions because of the newer and newer methods adopted by the borrower(s)/guarantor(s) to deceive. As of now, publication of photograph(s) of defaulting borrower(s)/guarantor(s) by the secured creditor has to be viewed as taking recourse not to legal but to extra-legal means.

32) The decisions cited by Mr. Rai lay down principles of law, which are not in doubt. But the principles do not apply here because of want of legal authority of the secured creditors to act in the manner they have threatened to act.

33) For the reasons aforesaid, the petitioners’ challenge restricted to the threat of publication of their photographs is upheld. Publication of photographs in newspapers, magazines etc. neither being permissible in terms of the SARFAESI Act or the rules framed thereunder nor under any other rule/notification/guideline having binding effect, I further hold that the threat to publish photographs borders on extra-legal means to recover the dues. The secured creditors are, accordingly, restrained by a prohibitory order from taking such recourse.

34) Insofar as the other reliefs claimed in the writ petitions are concerned, I am inclined to keep my hands off. Should there be failure on the part of the defaulting borrowers/guarantors to repay the loan advanced by the secured creditors, the latter shall be free to proceed against the former strictly in accordance with law for recovery of the secured debt.

35) The writ petitions stand disposed of, without costs.

36) Photocopy of this order, duly counter-signed by the Assistant Court Officer, shall be retained with the records of W.P. 9850(W) of 2013. Urgent photostat certified copy of this judgment and order, if applied for, may be furnished to the applicant at an early date.

(DIPANKAR DATTA, J.)

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(2) We have created a separate web site www.usindolegal.com which deals exclusively with our US joint venture enterprise for activities like BPO, legal BPO, DRT etc. This site has started appearing in the search results of Google, Mamma, Alexa and Yahoo.

Application of Law of Torts in claiming Damages from Municipal Corporations for demolition of structures, closure of shops etc:- In many parts of the country, the Municipal Corporations are demolishing structures like shops and houses which existed for number of years. The shops existing for number of years are proposed to be shut down. The affected persons should claim Damages under the Law of Torts, which would be substantial. It is learnt that in Delhi itself about 5 lac shops are to be closed down and about 25 lac persons would be out of jobs. All these persons should file damage suits in the civil court. Since the damages would be substantial, the suits may be filed as Indigent Persons. Since the damages would attract interest, the usual delay by the civil courts will not affect the final outcome. The affected shop owners may discuss the details with us on phone.

Our Articles for Borrowers and Guarantors:- Our articles on DRT matters have been published in the Financial Express. The All India Manufacturers Organisation in its famous web site www.aimoindia.org has reproduced copies of our four articles. These original articles can be searched in the archive of the Financial Express in its web site www.financialexpress.com Two of these articles have been reproduced in other pages of this web site. 

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About Us in Brief :-  (1) We specialize in DRT (Debt Recovery Tribunal) and NCLT (National Company Law Tribunal) matters. As a whole you may approach us for all DRT Problems and Solutions as well as matters connected with ARCIL i.e. Asset Reconstruction Company (India) Limited,  We have a Joint Venture with an America based law firm for various activities like BPO, legal BPO and DRT. The details of the said American firm and the joint venture may be seen at the page - Our US Joint Venture with Anand Ahuja Associates or in www.usindolegal.com (2) For your all problems including those in DRT, please phone us or send e-mail. Please give your contact details along with your problems in brief. As a whole you may approach us for all DRT Problems and Solutions.  (2) With our Legal Opinion, you need not worry about the Securitisation Act or other DRT matters or NCLT. Please visit the page Products & Services and Frequently Asked Questions (3) On account of our expertise in the Law of Torts and Banking and experience past 15 years, we can help you to submit suitable defence with winning strategy in DRT cases, Securitisation Act, Guarantors' defence etc.  (4) We need only copies of all available documents  to render our expert 'Legal Opinion' which will be quite useful and valuable to you particularly in DRT i.e. Debt recovery Tribunal. (5) We have also handled assignments for preparation of damage claims against Electricity Boards, Insurance Companies, Municipal Corporations etc. all on the basis of the Law of Torts.  (6) The DRT counterclaims is to be prepared well in advance so that it could be raised at proper time in DRT or other forum to safeguard the securities and assets. (7) Several DRT counterclaims drafted by us are being handled by different advocates at DRT Mumbai, DRT Delhi, DRT Jabalpur etc. Thus DRT advocates are available in these cities. Cases in other Debt Recovery Tribunals are under process. (8) This site is updated monthly mostly on every first Monday of the month or for urgent release on any day with latest material. (9) For further details about us, please visit the page About Us-DRT Solutions As a whole you may approach us for all DRT Problems and Solutions. We hail from the place to which Maharishi Mahesh Yogi and Acharya Rajnish belong and hence this site is dedicated to them.

Our this web site is dedicated to Yoga Rishi Baba Ramdev Ji Maharaj:- Our this web site is respectfully dedicated to Yoga Rishi Baba Ramdev Ji Maharaj whose method of Pranayam has cured even incurable diseases and thus has revolutionized modern medical science. For further details please visit our special page by clicking here Baba Ramdev Ji Maharaj, Yoga Guru, Cure for All Diseases, Medical Science Revolution

Site also dedicated to:-   (1) Swami Ramdevji, Acharya Balkishan and their Guru Pradumn Maharaj.

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                                           (3) Shri Hira Ratan Manek (HRM) for his pioneering work on Solar healing vide his web site www.solarhealing.com and forum at www.lifemysteries.com                                    

We regularly practice TM and SCI of Maharishi Mahesh Yogi. We also regularly practice Hath Yoga including Pranayam based on Baba Ramdev Ji  Maharaj. We daily watch his global TV program on Astha Channel from 05:30 AM to 8AM and 8PM to 9PM Indian Standards Time. On Sanskar channel, we daily view the discourse of Pradumn Maharaj from 4 AM to 5:30 AM. Many chronic diseases such as Cancer, Parkinsons' disease, Polio, Asthma, Hypertension, diabetes etc. have been cured by the said method of Pranayam which can be learnt even by watching his program on TV. Since 30th March '06, we have started practicing Sun Gazing as prescribed by HRM.

                                    (3) Shri Satyanarayan Morya alias 'Babaji' for his praiseworthy service to our nation. Please visit his site www.artistbaba.com 

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