Gujarat High Court
Monal Dineshbhai Chokshi & 2 vs State Bank Of India & on 22 April, 2015
Author: Rajesh H.Shukla
Bench: Rajesh H.Shukla
C/SCA/8323/2013 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 1661 of 2013
With
SPECIAL CIVIL APPLICATION NO. 8323 of 2013
With
SPECIAL CIVIL APPLICATION NO. 2260 of 2014
[On note for speaking to minutes of order dated 31/03/2015
in C/SCA/8323/2013 & C/SCA/1661/20136 & 2260/2014]
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MONAL DINESHBHAI CHOKSHI & 2....Petitioner(s)
Versus
STATE BANK OF INDIA & 1....Respondent(s)
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Appearance:
MS ANUJA S NANAVATI for the Petitioner(s) No. 1 3
MR NIKUNT K RAVAL for the Respondent(s) No. 2
MRS KALPANAK RAVAL for the Respondent(s) No. 2
RULE SERVED for the Respondent(s) No. 1 2
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CORAM: HONOURABLE MR.JUSTICE RAJESH H.SHUKLA
Date : 22/04/2015
ORAL ORDER
In view of the speaking to minutes, name of learned advocate, Shri P.A. Mehd may also be shown in the further order.
Office to make necessary correction in the said order.
Note for speaking to minutes stands disposed of.
(RAJESH H.SHUKLA, J.)
Gautam
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C/SCA/8323/2013 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 8323 of 2013
With
SPECIAL CIVIL APPLICATION NO. 1661 of 2013
With
SPECIAL CIVIL APPLICATION NO. 2260 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE RAJESH H.SHUKLA
================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ?
================================================================ MONAL DINESHBHAI CHOKSHI & 2....Petitioner(s) Versus STATE BANK OF INDIA & 1....Respondent(s) ================================================================ Appearance:
SPECIAL CIVIL APPLICATION No. 8323 of 2013 MR SI NANAVATI, SR. ADVOCATE, with MS ANUJA S NANAVATI, ADVOCATE for the Petitioner(s) No. 1 - 3 MR NIKUNT K RAVAL, ADVOCATE for the Respondent(s) No. 2 MRS DHARMISHTA RAVAL, for MRS KALPANA K RAVAL, ADVOCATE for the Respondent(s) No. 2 RULE SERVED for the Respondent(s) No. 1 - 2 Page 1 of 24 2 of 25 C/SCA/8323/2013 JUDGMENT SPECIAL CIVIL APPLICATION No. 1661 of 2013 MR PA MEHD , ADVOCATE for the Petitioner(s) No. 1 - 5 MR ANIP GANDHI, ADVOCATE for the Respondent(s) No. 1-2 SPECIAL CIVIL APPLICATION No. 2260 of 2014 MR AR GUPTA, ADVOCATE for the Petitioner(s) No. 1 MR ANIP GANDHI, ADVOCATE for the Respondent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE RAJESH H.SHUKLA Date : 31/03/2015 ORAL JUDGMENT The issue involved in this group of petitions is with regard to the powers of the bank in exercise of statutory powers under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'SARFAESI Act') to publish the name with photograph of the borrower who has been a defaulter in repayment of the outstanding dues of the bank.
2. It has many facets as canvassed by the respective counsels appearing for the petitioners-original borrowers, inter alia, that the banks have no power to publish photograph and they have referred to the provisions of SARFAESI Act read with the Security Interest (Enforcement) Rules, 2002 (for short 'the Rules') to contend that it only refers to the procedure with regard to issuance of notice before exercising the powers for possession and sale of the secured assets. It is also contended that since the provisions of the SARFAEI Act or the rules do Page 2 of 24 3 of 25 C/SCA/8323/2013 JUDGMENT not expressly provide for publication of photograph, it cannot be read that the bank can resort to such publication of photograph which cause prejudice to the reputation of the borrowers. It is also contended that it has to be considered in light of Art. 21 which refers to the Right to Life.
3. The learned counsels have, referring to the right to life under Art.
21, emphasised that it encompasses right to live with dignity and therefore the reputation or dignity of the borrower who has defaulted in repayment cannot be prejudiced. The learned counsels have therefore pointedly referred to these provisions including some guidelines by the bank and alternatively it has also been argued that even if the power is assumed, it cannot have any unfettered power or discretion and therefore the guideline known as the Bank Codes and the Standards Board of India refers to the standards which include the privacy and confidentiality of the borrower as a customer. Therefore, it has also been contended that the bank could not disclose or publish the photograph in view of such guidelines with regard to privacy and confidentiality as they cannot cause any harm to the reputation of the borrower by publishing information and the photograph of the borrower. It was emphasised that as it has been specifically stated in this Code that "your privacy would be respected"
would not justify any such publication of the photograph. The learned counsels have have tried to emphasise that even if it is assumed for the sake of argument that there is a power, still, it is subject to some mechanism or guideline and as there is no detailed guideline with regard to the same by RBI, the photograph could not be permitted to be published causing harm to the reputation of the borrower. The learned counsels have submitted that merely because the person may have committed a default in repayment he is not necessarily a person without Page 3 of 24 4 of 25 C/SCA/8323/2013 JUDGMENT reputation. In support of these submissions, they have referred to and relied upon the judgments of the Hon'ble Apex Court reported in AIR 1996 SC 2124 in the case of State of Manipur v. Thingujam Brojen Meetei, (1996) 11 SCC 399 in the case of Om Prakash Gargi v. State of Punjab and ors., (1985) 2 SCC 412 in the case of Chief of Army Staff and ors. v.
Major Dharam Pal Kukrety and (2009) 9 SCC 447 in the case of Y. Satyanarayan Reddy v. Mandal Revenue Officer, Andhra Pradesh and the judgment reported in 2014(1) DRTC 93 (Ker).
4. Per contra, the learned counsels appearing for the banks contended that there is no right, much less any fundamental right. It was submitted that the publication of such photograph along with the notice is in exercise of statutory right as provided under the provisions of SARFAESI Act. They have pointedly referred to the notice under sec.13(2) of SARFAESI Act read with the Rules and submitted that it clearly provides for taking action for recovery of the dues. Merely because it is not expressly stated about publication of notice with photograph it does not necessarily mean that every detail has to be provided in the statute itself about the mode or the manner of publication of the notice. The learned counsels have submitted that the notice may include the notice with photograph as in these days in many cases photograph is required to be affixed to the forms like the account opening form, etc. It was submitted that when the statute provides and it does not expressly prohibit it can hardly be said that there is any breach or violation of any right. The learned counsels have stated that therefore the manner and modalities of publication of notice cannot be an issue once the statute empowers the bank to publish such notice. It was submitted that it gives right to the bank, provides an opportunity to the borrower to comply with the notice and at the same time the published notice also puts the public at large to Page 4 of 24 5 of 25 C/SCA/8323/2013 JUDGMENT notice about the property in question which is involved and which is mortgaged to the bank as a security. It was therefore submitted that it is in public interest and so long as it is not offending or prohibited by any law or rules the exercise of statutory powers by the bank cannot be curtailed or regulated in exercise of discretion under Art. 226 by the court. The manner of publication of notice cannot be questioned before the court in exercise of discretion under Art. 226.
5. The learned counsels for the respondent banks have also referred to and relied upon the judgments reported in AIR 1995 SC 264 in the case of R. Rajagopal alias R.R. Gopal and anr. v. State of Tamil Nadu and ors., and AIR 2007 MP 45 in the case of Ku. Archana Chauhan v. State Bank of India, Jabalpur, which has referred to this very exercise of statutory power under the SARFAESI Act read with the Rules and submitted that, on the contrary, it is an exercise of statutory power under the Act which enables the bank to take steps for speedy recovery of the loans. They have also referred to and relied upon the judgment of the Bombay High Court in the case of D.J. Exim (India) Pvt. Ltd. & ors. v. State Bank of India & ors., being Writ Petition (L) No. 2808 of 2013 dated 28.11.2013 and also the judgment of the Madras High Court reported in (2006) 4 1877 in the case of K.J. Doraisamy v. State Bank of India. The learned counsels have stated that the SARFAESI Act has been enacted to expedite the recovery of outstanding dues of the bank and reduce the NPA.
6. The learned counsels have, therefore, stated that the grievance made with regard to privacy or the rules of natural justice is also misconceived as the rules of natural justice could not be attracted as there is no punishment or any order which can be said to have been passed which would require an opportunity of hearing. It was submitted that in Page 5 of 24 6 of 25 C/SCA/8323/2013 JUDGMENT fact the borrower having agreed and accepted at the time of taking the advances from the bank stated that the notice could be given in a particular manner with photograph now cannot challenge the powers of the bank as it is not open to approbate and reprobate challenging the powers of the bank to publish such notice with photograph in exercise of statutory powers. The learned counsels have stated that in fact the petitioners are estopped on the principle of promissory estoppel from raising such issues having got the advantage of finance and thereafter when they fail to repay the amount are trying to raise contentions about the authority or the power of the bank to publish the notice with photograph. It was therefore submitted that there is no justification and there may not be any violation of the rules of natural justice.
7. Similarly, it has been emphasised that the petitioners cannot make any grievance having themselves agreed under an agreement or undertaking that such a notice with photograph would be published. It was submitted that the right is exercised by the bank pursuant to such agreement or the undertaking between the parties de hors the statutory provision of SARFAESI Act and therefore there is no question of raising any contention about the power of the bank to publish such notice with photograph. It was also emphasised that the issue with regard to the right of privacy or reputation under Art. 21 are misconceived.
Special Civil Application No. 8323 of 2013
8. Learned Sr. Counsel Shri S.I. Nanavati appearing with learned advocate Ms. Anuja Nanavati has referred to the notice at Annexure-A and submitted that the submissions are two-fold. One one hand, he has tried to submit with regard to the very power or jurisdiction to publish Page 6 of 24 7 of 25 C/SCA/8323/2013 JUDGMENT such notice with photograph. However, learned Sr. Counsel Shri Nanavati submitted that assuming that there is such power the notice has already been published without photograph and the petitioners are ready and willing to offer the property secured by way of mortgage for the sale and therefore there is no justification to give any advertisement with photograph. He emphasised that it reflects the attitude of the bank to cause prejudice to the reputation of the petitioner. He submitted that it has to be seen what purpose it could now serve with publication of notice and the photograph. He submitted that the petitioner has not objected to the exercise of power by the bank for recovery of the amount by sale of mortgaged property. Therefore, it was submitted that the exercise of statutory power under the SARFAESI Act read with the Rules to recover the outstanding dues of the bank is not challenged or objected and they can proceed to recover the amount by resorting to such statutory provisions for sale of the secured property. However, it does not empower the bank to publish the photograph which has a tendency to cause prejudice to the reputation of the person.
9. Learned Sr. Counsel Shri Nanavati referred to the papers and pointedly referred to the Banking Codes and Standards Board of India (for short 'the Codes') which is produced on record and submitted that it also includes a clause/para regarding privacy and confidentiality. Learned Sr. Counsel Shri Nanavati has pointedly referred to this and submitted that the bank has evolved this guideline to protect the reputation of the borrower who has defaulted and it has been specifically observed, "Your privacy would be respected"
Page 7 of 248 of 25 C/SCA/8323/2013 JUDGMENT He, therefore, submitted that the 'Codes' provide for a broad code of conduct for both the bank as well as the borrower. He submitted that the clause regarding privacy and confidentiality would be meaningless if such notice with photograph is permitted to be published. He has referred to and relied upon the judgment of the Kerala High Court reported in [(2014) (1) DRTC 93 (Ker.)] in the case of Venu v. State Bank of India to emphasise the observation, "...The practice of exhibiting a photograph of a person and shaming him in public for the sin of being in an impecunious condition cannot be encouraged in a civilised society like ours."
He has also referred to other judgments and submitted that apart from the challenge to the power the court may also consider the alternative argument whether there is any justification to publish the notice with photograph.
Special Civil Application No. 1661 of 2013
10. Learned advocate Shri P.A. Mehd adopted the submissions made by learned Sr. Counsel Shri S.I. Nanavati on the aspect of the power or authority of the bank to publish such notice with photograph and also the right to privacy under Art. 21 to emphasise that the right to life encompasses the right to live with dignity. He submitted that it affects the dignity and reputation of a person and therefore it is offending the fundamental right of the petitioner. He has also submitted that in any case when the petitioner has shown willingness to repay the amount such exercise of statutory power would not be justified. Learned advocate Shri Mehd also referred to the provisions of SARFAESI Act and submitted Page 8 of 24 9 of 25 C/SCA/8323/2013 JUDGMENT that in fact every outstanding due does not make the borrower a "willful defaulter". He submitted that "willful defaulter" has to be examined and thereafter the authority can take the decision. He submitted the authority is required to take action as per the law and it cannot go beyond the provisions of law. He submitted that it has to function within the provisions of law like the SARFAESI Act. Learned advocate Shri Mehd submitted that the provisions of SARFAESI Act or the Rules do not provide for such publication of photograph and therefore it cannot be read while publishing the notice under sec. 13(2) and sec. 13(4) of the SARFAESI Act that photograph also could be published. He has also referred to Appendix IV and rule 8 of the Rules. He submitted that the bank can publish the notice as per the provision of rule 8 and it refers to the immovable property and it is a possession notice with regard to the possession of immovable property to be taken over and it does not speak about the photograph. He submitted that this is the only statutory power for publication of any notice under the SARFAESI Act. Learned advocate Shri Mehd submitted that under the SARFAESI Act and the Rules the powers of the bank are restricted to publication of notice in the manner provided by the Act and the Rules. He emphasised that the provisions of SARFAESI Act read with the Rules do not expressly provide for such publication of photograph. He therefore submitted that the publication of photograph under SARFAESI Act is not contemplated.
11. Learned advocate Shri Mehd also submitted that there is no circular or notification by the RBI which provide for publication of photograph with the notice under the SARFAESI Act like sec. 13(2) of the SARFAESI Act. He therefore submitted that in fact for the purpose of statutory power under the SARFAESI Act it may also be examined as to who will bear the cost and the cost cannot be debited to the account of the Page 9 of 24 10 of 25 C/SCA/8323/2013 JUDGMENT borrower/defaulter. He submitted that the submission of the bank at the highest that they have the power to publish photograph with the notice can be made subject to the agreement which he has referred to produced on record. Learned advocate Shri Mehd therefore submitted that it affects the right of privacy of the petitioner. He submitted that the person has a right to life under Art. 21 which encompasses the right to live with dignity. He submitted that publication of such photograph will have a bearing on the reputation and prejudice could be caused to the reputation of a person which is not permissible. In support of this contention he has referred to and relied upon the judgment reported in AIR 1996 SC 2124 (para 9) and also the judgment reported in (1996) 11 SCC 399 (para 4).
Special Civil Application No. 2260 of 2014
12. Learned advocate Shri Gupta referred to the papers and submitted that he would adopt the submissions made by learned Sr. Counsel Shri Nanavati as well as learned advocate Shri Mehd. He also referred to the impugned notice at Annexure-A and submitted that the notice is without any power. He also submitted that in fact the notice is not as required by the statute inasmuch as the provisions of law empower a particular officer (Chief Manager) and the notice is given by the Asst. General Manager. Rule 2(a) defines the "authorised officer" and the notice is not by the authorised officer and therefore it is not as per the requirement of law. He submitted that the powers are given to the Chief Manager or the authorised officer and as the notice at Annexure-A is not given by such officer, it is not a valid notice. He submitted that there is nothing that suggests that the mind of the Chief Manager or the authorised officer has been applied before issuing the notice. Similarly, he referred to the provisions of the Rules and submitted that it provides for the borrower Page 10 of 24 11 of 25 C/SCA/8323/2013 JUDGMENT and when he could be said to be a willful defaulter. Learned advocate Shri Gupta emphasised that every borrower who commits default in repayment is not a willful defaulter. Learned advocate Shri Gupta also referred to the master circular of the RBI and submitted that none of the conditions for willful default as prescribed are fulfilled. Therefore, as the petitioner is not a willful defaulter it will not have any application.
13. Similarly, learned advocate Shri Gupta adopted the submissions with regard to the right to life under Art. 21 which includes the right to live with dignity and has adopted the submissions made by other learned advocates. He has also referred to and relied upon the judgment of the Hon'ble Apex Court reported in (2012) 5 SCC 1. It was submitted that if the Act requires it to be done in a particular manner it should be done by the authorised officer as per the law and not as prescribed subsequently by any instructions or circular. He therefore submitted that as the statute does not provide for publication of notice with the photograph, it cannot be read into it by the subsequent circular or instructions issued by the bank.
14. In view of these rival submissions, it is required to be considered whether the present petitions require consideration and whether the submissions made by the learned counsels for the petitioners raising objection regarding the power or authority of the respondent banks to publish photographs in the notice can be sustained.
15. As recorded hereinabove, there are divergent views by different High Courts. However, before referring to the same, while appreciating the submissions, the emphasis given by learned counsels Shri Nanavati, Page 11 of 24 12 of 25 C/SCA/8323/2013 JUDGMENT Shri Mehd and Shri Gupta referring to Appendix IV under Rule 8(1) is required to be considered. The submissions have been made at length that under the SARFAESI Act or the Rules the bank can publish the notice for auction or sale of the immovable property under rule 8, but it does not speak about the photograph. The emphasis has been made that what is required is the procedure for recovery of the amount by sale of the property, but it does not speak of publication of the photograph which may have an adverse impact on the reputation of the person. It was, therefore, submitted that the publication of photograph under the SARFAESI Act or the Rules is not contemplated, nor is there any rule or circular or guideline which permit the publication of photograph.
16. However, in order to appreciate these submissions, the Statement of Objects and Reasons of the SARFAESI Act is required to be kept in mind. The Statement of Objects and Reasons clearly focus on the need for such Act that there was no legal provision for facilitating securitisation of financial assets of banks and financial institutions. It was also felt that unlike international banks, the banks and financial institutions in India do not have power to take possession of securities and sell them. Therefore, in order to provide a legal framework to keep pace with the changing commercial practices and financial sector reforms the Act has been brought as suggested and recommended by the Narasimham Committee and Andhyarujina Committee constituted by the Central Government. One of the objects which was sought to be achieved, as referred to in the Bill which is highlighted is, "empowering the banks and financial institutions to take possession of the securities given for financial assistance and sell or lease the same or take over management in the event of default, i.e., classification of the borrower's account as non-performing asset in accordance with the directions given Page 12 of 24 13 of 25 C/SCA/8323/2013 JUDGMENT or guidelines issued by the Reserve Bank of India from time to time."
17. In this background, if the scheme of the Act is considered, Chapter III Sec. 13 refers to 'Enforcement of security interest' and detailed procedure has been provided. Section 13(2) provides that the secured creditor may require the borrower by notice to discharge his liabilities. Section 13(4) refers to the procedure where the borrower fails to discharge the liability and sec. 14 refers to taking over the possession. The notice as referred to in this group of matters, therefore, are issued in exercise of the statutory powers. Therefore, the only aspect is whether the notice could be with the photograph of the borrower who has defaulted.
18. Though the contentions have been raised, as submitted by the learned counsels for the respective banks, it is not only the provisions of the SARFAESI Act but it is also independently agreed and accepted by the borrower at the time of taking the advances by executing the writing or the agreement which empower and permit the bank to publish the notice with the photograph as agreed and accepted by the borrower at the time of taking the advance. Learned counsel Ms. Dharmishta Raval appearing for learned advocate Ms. Kalpana Raval for the respondent bank in SCA No. 8323 of 2013 and other learned advocates appearing for the banks have pointedly referred to this aspect and the undertaking or the agreement executed by the borrowers, who are the petitioners in the present cases. It has been emphasised that the petitioners-borrowers had at the time of taking the loan or advance have agreed and accepted, "Accordingly, we hereby agree and give consent for the disclosure by the SBI Consortium of all or any such Page 13 of 24 14 of 25 C/SCA/8323/2013 JUDGMENT
(a) information and date relating to us,
(b) the information or data relating to any credit facility availed of/to be availed by us, and
(c) default, if any, committed by us in discharge of our such obligation .......
I/We hereby further agree as precondition of the loan/advance given to me/us by the Bank that in case I/We commit default in repayment of the loan/advances or in the repayment of the interest thereon or any of the agreed installment of the loan on due date/s, the bank and/or the Reserve Bank of India will have an unequalled right to disclose or publish my/our name or the name of our company/firm/unit and its directors/partners, properties as defaulters in such manner and through such medium, as the Banks or Reserve Bank of India in their absolute discretion may think fit."
19. Thus, it has been agreed and accepted that the bank could publish the name in such a manner and through such a medium as per the discretion of the bank or the RBI. Therefore, the submission that though the notice could be given it should not be with the photograph and there is nothing in the provision of the SARFAESI Act or the Rules which provide for publication of the photograph cannot be accepted on two counts,
(a) that every detail need not be provided in the Act or the Rules once it refers to the publication of notice, meaning thereby, the underlying idea or the object is to give information to the public about the defaulter/borrower with regard to the transactions.
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C/SCA/8323/2013 JUDGMENT
(b) Further, de hors the provisions of the SARFAESI Act and the Rules, as rightly submitted, it is pursuant to the independent agreement/writing agreed and accepted by the borrower at the time of taking the advance which empower the bank pursuant to such mutual agreement between the parties the publication of the notice with photograph is sought to be made.
20. As stated above, it has been accepted that the bank will have unqualified discretion to publish in such a manner and through such a medium as may be decided by the bank. Therefore, what is emphasised is publication of the name and it does not necessarily confine to the manner of publication that the notice may be published but the photograph could not be published. As it is submitted, what is relevant is publication with the discretion of the bank which may in turn include "with photograph". It is a commonly accepted norm that even for filling up of the form for opening of an account, the photograph of the applicant is required to be affixed. In the same way, the notice could be with the photograph as may be decided by the bank in its discretion which cannot be questioned. As stated above, there is no question of lack of authority or power with the bank in publishing such notice with photograph both by virtue of the provisions of the SARFAESI Act which provide for publication of notice coupled with the fact that when the borrower/defaulter like the petitioners having agreed and accepted by way of agreement or writing at the time of taking advance giving absolute discretion to the bank to publish the details in the mode and the manner at the discretion of the bank, now it can hardly be questioned. In fact, it would otherwise amount to wriggling out of the contractual obligation or the undertaking which is not permissible. It is well accepted that a person Page 15 of 24 16 of 25 C/SCA/8323/2013 JUDGMENT has to accept the agreement with all its obligations and cannot be permitted to approbate and reprobate and say that it will only take the advantages under the contract but will not fulfill the obligations agreed and accepted under the same agreement. In other words, once the publication of the notice is justified and permissible under the law as well as by an agreement between the parties, the Court would decline to interfere in exercise of discretion under Art. 226 as it is a matter of policy for the bank to have recourse to enforcement of the security for recovery of the amount either under the provisions of the SARFAESI Act or de hors such provision under a mutual agreement executed by the borrower at the time of availing the advance.
21. Another facet of the submissions which have been canvassed very forcefully referring to Art. 21 with much emphasis is the right to life which include the right to privacy or the right to reputation etc. It must be stated that by the judicial interpretation, the scope and meaning of Art. 21 has been expanded and they have added facets to the right to life incorporated under Art. 21 of the Constitution. Therefore, there is no quarrel with regard to the multifaceted meaning with different shades given to right to life under the Constitution with the interpretative process by the higher courts including the Hon'ble Apex Court. However, at the same time, it has also been well accepted that such a right cannot be claimed as an absolute right.
22. There are divergent views on this issue with regard to publication of photograph and the powers of the bank to publish notice with photograph. The Kerala High Court has decided that it is not permissible as it entrenches upon the right to life under Art. 21 as it has an impact on the reputation of the borrower, whereas the Hon'ble High Courts of Page 16 of 24 17 of 25 C/SCA/8323/2013 JUDGMENT Madras and Madhya Pradesh have taken different views with specific observations referring to this very aspect. The High Court of Bombay in a judgment in the case of D.J. Exim (India) Pvt Ltd. & ors. (supra) has focused on this very issue with reference to Art. 21 and right to reputation or right to privacy.
23. In such circumstances, there may be conflicting claims which need to be balanced. On one hand person's right to privacy or "right to be let alone" with another person's "right to be informed" has to be considered. The bank as a public body subject to control by RBI is obliged to have certain information which may have to be made public in public interest. Therefore, the right of privacy is an essential component of right to life as envisaged by Art. 21. However, the Hon'ble Apex Court in a judgment reported in (1998) 8 SCC 296 in the case Mr. 'X' v. Hospital 'Z', has made clear that the right to privacy is not an absolute right. It has observed.
"the right, however, is not absolute and may be lawfully restricted for the prevention of crime, disorder or protection of health or morals or protection of rights and freedom of others."
Similarly, in another judgment in the case of People's Union for Civil Liberties v. Union of India, reported in (2003) 4 SCC 399, arising out of a challenge to the constitutional validity of the Representation of People (Amendment) Ordinance, 2002 dealing with the disclosure of information by a candidate, the Hon'ble Apex Court held, "by declaration of a fact, which is a matter of public record, that a candidate was involved in various criminal cases, there is no question of infringement of any right of privacy."
24. Similarly, it has been observed that declaration with regard to the Page 17 of 24 18 of 25 C/SCA/8323/2013 JUDGMENT assets or the income no such right could be claimed and it has to be considered with reference to the right to information by the people.
25. It is in this background, as stated above, the banks have, pursuant to the RBI circular or their own circular, evolved a mechanism by which every defaulter's name is not published with photograph and it is only after proper scrutiny at the higher level and with the approval of the Chief Manager, such publication of notice with photograph is permitted. Therefore, it cannot be said to be violative of Art. 21, particularly when it is required to be balanced between the right of an individual like the defaulter and the right of the bank or the public in general.
26. Again, while considering the right to privacy it is required to be stated that the Hon'ble Apex Court in a judgment in case of R. Rajagopal alias R.R. Gopal and anr. v. State of Tamil Nadu and ors., reported in (1994) 6 SCC 632 : AIR 1995 SC 264 has succinctly considered this aspect that the right to privacy as an independent and distinctive concept originated in the field of Tort law which has now been recognized as an absolute right to life under Art. 21. Therefore, the right has two aspects or are two faces of the same coin, (1) the general law of privacy which affords a tort action for damages resulting from an unlawful invasion of privacy, and (2) the constitutional recognition given to the right to privacy which protects personal privacy against unlawful Governmental invasion.
27. Therefore, what we are concerned with is the second facet of the right where constitutional recognition is sought to be given to such right Page 18 of 24 19 of 25 C/SCA/8323/2013 JUDGMENT of privacy. Though the right to privacy is not enumerated as a fundamental right in our Constitution, it has been inferred from Art. 21 with the interpretative process by various pronouncements of the Hon'ble Apex Court for which a useful reference can also be made to the judgment of the Apex Court reported in AIR 1975 SC 1378 in the case of Gobind v. State of M.P. and AIR 1963 SC 1295 in the case of Kharak Singh v. State of U.P and ors.. The Hon'ble Apex Court in the case of R. Rajagopal (supra) has clearly observed laying down broad guidelines, (1) the right to privacy is implicit in the right to life and liberty guaranteed to the citizens of this country by Article 21. It is a "right to be let alone." A citizen has a right to safeguard the privacy of his own, his family, marriage, procreation, motherhood, child bearing and education among other matters. None can publish anything concerning the above matters without his consent - whether truthful or otherwise and whether laudatory or critical. If he does so, he would be violating the right to privacy of the person concerned and would be liable in an action for damages. Position may, however be different, if a person voluntarily thrusts himself into controversy or voluntarily invites or raises a controversy.
(2) The rule aforesaid is subject to the exception, that any publication concerning the aforesaid aspects becomes unobjectionable if such publication is based upon public records including Court records. This is for the reason that once a matter becomes a matter of public record, the right to privacy no longer subsists and it becomes a legitimate subject for comment by press and media among others. We are, however, of the opinion that in the interest of decency (Article 19(2)) an exception must be carved out to this rule, viz., a female who is the victim of a sexual assault, kidnap, abduction or a like offense should not further be subjected to the indignity of her name and the incident being published in press/media.
(3) There is yet another exception to the Rule in (1) above - indeed, this is not an exception but an independent rule. In the case of public officials, it is obvious, right to privacy, or for that matter, the remedy of action for damages is simply not available with respect Page 19 of 24 20 of 25 C/SCA/8323/2013 JUDGMENT to their acts and conduct relevant to the discharge of their official duties. This is so even where the publication is based upon facts and statements which are not true, unless the official establishes that the publication was made (by the defendant) with reckless disregard for truth. In such a case, it would be enough for the dependent (member of the press or media) to prove that he acted after a reasonable verification of the facts; it is not necessary for him to prove that what he has written is true. Of course, where the publications is proved to be false and actuated by malice or personal animosity, the defendant would have no defence and would be liable for damages. It is equally obvious that in matters not relevant to the discharge of his duties, the public official enjoys the same protection as any other citizen, as explained in (1) and (2) above. It needs no reiteration that judiciary, which is protected by the power to punish for contempt of Court and the Parliament and Legislatures protected as their privileges are by Articles 105 and 104 respectively of the Constitution of India, represent exceptions to this rule.
(4) So far as the Government, local authority and other organs and institutions exercising Governmental power are concerned, they cannot maintain a suit for damages for defaming them.
(5) Rules 3 and 4 do not, however, mean that Official Secrets Act, 1923, or any similar enactment or provision having the force of law does not bind the press or media.
(6) There is no law empowering the State or its officials to prohibit, or to impose a prior restraint upon the press/media."
28. Thus, the right to privacy is implicit in the right to life and liberty guaranteed to the citizens of this country by Article 21. It is a "right to be let alone." A citizen has a right to safeguard the privacy of his own, his family, marriage, procreation, motherhood, child bearing and education among other matters. None can publish anything concerning the above matters without his consent - whether truthful or otherwise and whether laudatory or critical. If he does so, he would be violating the right to privacy of the person concerned and would be liable in an action for Page 20 of 24 21 of 25 C/SCA/8323/2013 JUDGMENT damages. Position may, however be different, if a person voluntarily thrusts himself into controversy or voluntarily invites or raises a controversy. The Hon'ble Apex Court has also referred to the exception this rule. It is very evident that when such publication is made by the State or the authority or other organ exercising governmental powers the suit for damages cannot be maintained. In fact, as the person has consented or invited such publication voluntarily out of free will as a part of mutual obligation under an agreement it would stare in the face and no such claim for violation of right to privacy or reputation an be claimed by any such person.
29. It is required to be mentioned that the fact that the publication of notice with photograph has a social impact and perhaps that is the reason the defaulters/borrowers like the petitioners are more concerned which in turn is indication of the fact that it is a more effective measure for recovery as the person would like to have his reputation protected and therefore would clear the outstanding dues and would not make the default. Therefore, though the submissions have been made that it is arm- twisting it could not be readily accepted. In fact, it is rather an effective remedy as it has a reference to some kind of social impact. It is required to be mentioned at this stage that even for criminal justice system the theory of reformation or deterrence have advocated about social impact or social sanction being imposed which could be more effective.
30. A useful reference can be made to the observations made by the Hon'ble Apex Court in the case of R. Rajagopal (supra) and relied upon in the case of Phoolan Devi v. Shekhar Kapoor, reported in (1995) 57 DLT 154 : (1995) 32 DRJ 142.
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31. It is also required to be considered with reference to the right of the bank or financial institution to protect its outstanding dues and also as a public body having a public duty of passing information to the general public with regard to the financial transaction of the defaulters like the petitioners. In fact, the Right to Information Act has been made for granting more information to the public at large. In the facts of the case, such information may not be given individually but when the bank in exercise of its statutory powers or under an agreement is obliged to give a notice it cannot be interpreted narrowly that it has a right to publish the notice but it does not necessarily mean with photograph. In fact, it is one of the modes of publication and the public notice with or without photograph is a matter which is better left to the institution rather than the court intervening.
32. One more aspect which is required to be considered is, as rightly submitted by learned advocate Ms. Raval, that the RBI is having a master circular by way of guideline which provides for internal mechanism to have some scrutiny before such publication. It has been pointed out that it is not that in case of every defaulter it is published with photographs and care has been taken so that it does not affect the reputation of a person though he is a borrower who has defaulted. It provides that the papers would be placed and only with the approval of Chief Manager it could be published and there is a committee also which would scrutinize the papers. This itself suggests that even the exercise of discretion under an agreement is guided by some norms or mechanism. In other words, even though the borrower has agreed unconditionally and the bank having unqualified right to give publication of notice with photograph that there have to be in place some mechanism so that it is not exercised in every case. Therefore, it is in this background the court would not be Page 22 of 24 23 of 25 C/SCA/8323/2013 JUDGMENT justified to interfere with such discretion in exercise of discretion under Art. 226.
33. The scope of judicial review in exercise of discretion under Art.226 is well defined and broad guidelines have been laid down by the Hon'ble Apex Court in this regard. Though the concept of judicial review refers to the exercise of such power or judicial review with care and circumspection, meaning thereby, it is not a case of lack of jurisdiction but rather a caution and self-imposed limitation before exercising such discretion.
34. Therefore, in light of the discussion made hereinabove, the present petitions cannot be entertained and deserve to be dismissed and accordingly stand dismissed. Interim relief, if any, shall stand vacated. Rule discharged. No order as to costs.
(RAJESH H.SHUKLA, J.) (hn) FURTHER ORDER After the order was pronounced, learned advocate Shri Saurabh Mehta for the petitioner has requested for stay of the operation of the order for four weeks to enable the petitioner to have recourse to higher forum. The request is granted. The operation of the order is stayed till 30th April 2015.
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