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Rahul D (Executive )     21 June 2013

Can bank make photo publication before proceeding with 13(4)



The bank has issued a 13(2) notice around 1 year back. It has filed a case in DRT under section 19 against the guarantors but still not proceeded with 13(4). In the meantime, it has given notice to guarantors for their photo publication in newspapers. Is the bank allowed to do the same before finalization of DRT proceedings and also that 13(4) has not been started? What remedies are available to the guarantors in this case?




 7 Replies

MANOJ HARIT (LAWYER)     23 June 2013

Yes the Bank can publish the photographs. Moving ahead with 13(4) is not a precondition. In fact publishing photo is not part of Sarfaesi proceedings. Both are separate actions. If u r vary, u may preempt the action of the Bank by issueing them legal notice on valid grounds. Though it may not be able to stop the Bank. It may create some grounds for u to defend b4 DRT.

Rahul D (Executive )     24 June 2013

Mr. Manoj, thank you for your inputs. Can we approach the civil court if the bank publishes photo? Or are we still bound by the DRT?

narendra.s.p (Chief Manager(Law))     25 June 2013

 In S.T. Tamil Selvi Vs. SBI,SARB,Chennai[ W.P.No.199 of 2012- M.P.No.1 of 2012]

 The Hon’ble Court held that the mode of publication of photograph of default borrower adopted by the Bank cannot be called as a coercive mode. The Hon’ble Court observed that if at all, taking into consideration that the loan is granted in 2006 and till 2012, it is not settled and having now only called upon to pay and only thereafter if she fails to do so, intend publishing, cannot be stated as coercive step to collect the loan. Accordingly, the Hon’ble High Court dismissed the Writ Petition

The right of privacy of borrowers’ vis-à-vis the right of the Bank’s/FI’s to recovery public money were discussed in detail by the Hon’ble High Court of Chennai in Mr.K.J.Doraisamy vs The Assistant General Manager, SBI34. The Hon’ble Lordship held that from the point of view of the individual, his right to privacy is not absolute and from the point of view of the Bank, the duty to maintain secrecy is superceded by a larger public interest as well as by the Bank’s own interest under certain circumstances. The Hon’ble Court further held that if borrowers could find newer and newer methods to avoid repayment of the loans, the Banks are also entitled to invent novel methods to recover their dues.

Rahul D (Executive )     25 June 2013

Dear Mr. Narendra, 


Thanks for your valuable inputs. Appreciate the same. In that case, what about the damage caused to genuine borrowers due to such publishing activity by bank? The borrower's genuineness has not yet been proved as the DRT case is in pendancy or as above not even started.



Nadeem Qureshi (Advocate/ nadeemqureshi1@gmail.com)     25 June 2013

Dear Rahul

Civil court have no jurisdiction to entertain any application/suit/petition in sarfaesi matters or metters pending in DRT.

Rahul D (Executive )     27 June 2013

Dear Mr. Nadeem, 


Thanks for your input. As such, what is the best possible action for the genuine borrower to safeguard his privacy? I also learn that the BCSBI requires the bank to respect the borrowers privacy while collecting overdues (section 6 g iii of BCSBI). Can this be enforced in case of companies or guarantors?



Attached File : 380198588 codeofbanks aug09.pdf downloaded: 90 times

c.p.s. ramachary (1500)     23 July 2013

Neither RDDB & FI Act nor SARFAESI Act contemplate publishing of photos of defaulting borrowers. Madras High Court in the case cited supra approved such action as there is no bar to do so.However as a part of recovery effort the banks can publish photographs. Whether it is prior to 13(2) or (4) of SARFAESI Act does not give you any cause of action to choose any forum. To challenge validity of action under Sec.13(4) you have to invoke Sec.17 of SARFAESI Act. But publishing photograph is not a ground under Sec.17 of the Act to challenge the validity of Sec.13(4). Civil courts have no jurisdiction to grant you any relief if the action is taken with or without publishing photographs. Customers privacy is protected but not the privacy of loan defaulters. Best solution is to resolve the issue with the bank and get the account upgraded to performing asset by paying the defaulted dues before the action crosses the stage of Sec,13(4)

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