The
borrowers defaulted in repayment of loan. The bank initiated action under
Sarfaesi Act (Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act) 2002. The Bank issued notice under Section 13(2) of said
Act. The Bank then issued further notice that if the account is not regularized
within 10 days, the bank would publish the photographs of the directors and
Guarantors of the borrower company in the newspapers.
The borrowers challenged this
letter of the bank by way of a writ petition WPL No. 2808/2013 in the Bombay
High Court. The High Court referred to Rule 8 of the Sarfaesi Rules and noticed
that the said Rule permit the bank to publish the names and addresses of the
defaulters . The Division Bench of the High Court observed that such
publication of names serve two purposes – firstly that these persons are
willful defaulters is made known to the public at large and secondly, it
tends to caution the prospective buyers who may be offered the
property which may be mortgaged by these defaulters with the bank.
After so observing, the High
court held that that being the primary objective for publication of notice,
there would be no impediment in publishing the photographs of such willful
defaulters and particularly those defaulters who have committed various acts of
misfeasance. The High Court however cautioned that banks should not publish the
photographs of willful defaulters in a routine manner. Only after examining the
facts and circumstances of each case, the bank should consider whether the
photographs should be published.
Having said so, in peculiar facts
of said case, the High court (Justice V.M.Kanade and Justice M.S.Sonak) did not
find any fault with the proposed action of the bank to publish the photographs
of directors and guarantors of the defaulter borrower company and dismissed the
writ petition.
The borrower company and its directors / guarantors challenged the said decision dated 28th November 2013 of Bombay High Court in the Supreme Court of India. The Supreme Court (Justice F.M.I. Kalifulla and Justice Shiva Kirti Singh) by its order dated 14th July 2014 dismissed the said SLP No. 37726/2013 and thus the judgment given by Bombay High Court was upheld.
The borrower company and its directors / guarantors challenged the said decision dated 28th November 2013 of Bombay High Court in the Supreme Court of India. The Supreme Court (Justice F.M.I. Kalifulla and Justice Shiva Kirti Singh) by its order dated 14th July 2014 dismissed the said SLP No. 37726/2013 and thus the judgment given by Bombay High Court was upheld.
