Bank can publish defaulter's photo in papers: High Court

Written by PTI | Mumbai | Updated: Nov 29 2013, 03:08am hrs
Supreme CourtState Bank of India, on?October 10, had issued the firm a?letter warning that if it did not repay loan amount,?photographs of the directors. Reuters
Bombay High Court today refused tostop publication of photographs of a defaulter firm innewspapers, saying that it was in larger public interest.

The division bench of Justices V M Kanade and M S Sonakrefused to grant relief to the firm D J Exim and itsdirectors.

State Bank of India, onOctober 10, had issued the firm aletter warning that if it did not repay loan amount,photographs of the directors would be published in nationalnewspapers.

The company moved the High Court against this saying norule permits banks to publish photos.

"They cannot embarrass the defaulters like this.According to the rule only name and address can be published,"the firm's lawyers argued.

However SBI counsel Aspi Chinoy pointed out that thecompany had defaulted on repayment of Rs 53 crores.

"This is not disputed. They are admitted defaulters. Weare only stating this fact to the public," he argued, and saidthe bank "does not resort to such stringent measures" in eachand every case.

Accepting this argument, High Court observed thatpublishing of photographs serves the purpose of creatingawareness and cautioning prospective clients.

"In our view, there would be no impediment to publicationof photos of the defaulters. There is no legal bar whichexpressly prohibits the bank from publishing photos.

"However, the decision to resort to such measures shouldbe taken by a very senior level official not below the rank ofGeneral Manager of the bank. In this case, due process wasfollowed and the decision cannot be faulted," the court said.

It, however, said that SBI's earlier undertaking that itwould not publish the photos pending hearing of the petitionwould remain in effect for three more weeks, to enable thepetitioner company to appeal in the apex court.