By giving the ruling on the matter, a bench headed by justice Fakkir Mohamed Ibrahim Kalifulla upheld the Bombay High Courts November 2013 order that allowed State Bank of India (SBI) to publish names and photographs of directors and guarantors of Mumbai-based defaulter firm DJ Exim (India) in newspapers on the grounds that Rule 8 framed under the Securitisation Act specifically authorised the banks to publish the names and addresses of wilful defaulters and there is also no legal bar that prohibits them from publishing such information. The SC accepted the banks stand that the move does not violate the defaulters right to privacy as the same is not absolute. From the banks point of view, the duty to maintain secrecy is superseded by a larger public interest as well as by the banks own interest under certain circumstances, it held.
In the past, while the Bombay, Madras and Madhya Pradesh HCs had allowed banks to publish the names and photographs of defaulters, the Calcutta and Kerala HCs held such moves as unconstitutional and impermissible in law while ruling on some cases.
In the matter under review, DJ Exim had failed to pay SBI more than Rs 53.18 crore with interest despite repeated requests. The bank in October last year warned the company that if it failed to pay, names and photographs of its directors and guarantors would be published in national newspapers and action would be taken under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
The company moved the high court stating that the SBI letter was highly coercive in nature and no rule permitted banks to publish photos to embarrass the defaulters.