Rosy Sequeira, TNN Nov 29, 2013, 06.53AM IST | Times of India
MUMBAI: The Bombay high court on Thursday upheld State Bank of India’s move to publish photos of two directors of a company that defaulted on repaying nearly Rs 53 crore.
The HC said it was satisfied the bank’s action was not routine and was taken again-st willful defaulters who committed acts of malfeasance.
A division bench of Justices V M Kanade and M S Sonak dismissed a plea by a garment manufacturer and two directors to quash SBI’s October 10 letter intimating them that if they fail to regularize their account within 10 days, it would publish their photos in leading newspapers.
On October 31, SBI told the vacation court it would stay its hands.
The directors’ petition said between 2011-13 they had taken loans of Rs 49.31 crore and repaid Rs 14 crore with interest. But due to power cuts in Tirupur, Tamil Nadu, their manufacturing capacity was hampered and they faced a financial crunch. SBI recalled the amount and invoked the Securitization Act.
The petitioners’ advocates, Narayan Swamy and Jyoti Chavan, said under the Act there was no provision to publish photos of defaulters and the move was highhanded, unconstitutional and violated their right of privacy. They relied on two judgments of the Calcutta and Kerala HCs which restrained banks from publishing photos. “If the photos are published nobody will help us. Our image will be spoilt. Personal life will totally collapse,” said Swamy.
SBI’s senior counsel Aspi Chinoy said appeals were pending against those HC orders but the MP and Madras HCs had upheld publication of photos. He said SBI had non-performing assets of nearly Rs 50,000 crore.
“It is not that we publish in each and every case. Shame is not from photos but the act itself,” he said, adding that the decision was taken looking into acts of malfeasance, including where the petitioners had tried to divert sale proceeds, collected cash from buyers instead of routing sale proceeds to bank accounts and availed loans from other banks without SBI’s consent.
Observing that there is no legal bar, the judges said Securitization Rules permit revealing names and addresses of willful defaulters to the public and to caution unwary buyers from buying property mortgaged by defaulters to the bank. SBI said it would not act for three weeks to give the petitioners a chance to move the Supreme Court.
Source : http://goo.gl/W9yC3w