On Tuesday, 24th December, the Kerala High Court ruled that a bank has no right to publish photographs and details of defaulting borrowers, an act practised to coerce customers to repay bank loans. The Court stated that such practices dominate over a person’s right to live with dignity and reputation.
“The borrowers cannot be coerced to repay the loans by threatening to damage their reputation and privacy. The publication or display of photographs and other details of defaulting borrowers in public will invade the borrowers’ right to live with dignity and reputation. Such deprivation of life and personal liberty cannot be made except according to procedure established by law,” Justice Murali Purushothaman observed while hearing the petition filed by the Chempazhanthi Agricultural Improvement Co-operative Society.
As per the Live Law report, the society had a filed petition challenging the directions issued by the Assistant Registrar of Co-operative Societies which asked them to remove the flex exposing names, photos, and details of borrowers who failed to repay the loan. The flex boards were displayed at the head office of the society indicating that the named borrowers had not obeyed the bank policies regarding the loans.
Banks Cannot Coerce Defaulters To Pay By Publishing Their Photos, It Violates Right To Privacy & Reputation : Kerala High Courthttps://t.co/y5dnmxcQzA
— Live Law (@LiveLawIndia) December 24, 2024
In the petition, the bank claimed that they had contacted the defaulters and had repetitively asked them to repay their respective loans. Following this, the bank said it had no option but to resort to publishing a flex exposing their details in front of the head office.
The bank further also stated that after seeing the flex, some of the defaulters repaid their loans and that their practice had succeeded in a way. It also said that following its success, they were planning to put up a similar flex in the bank premises as well. “This is similar to the ‘beat of tom-tom’ mentioned in Rule 81 of the Kerala Co-operative Societies Rule, 1969 which is permitted during the attachment and sale of immovable properties,” the petition argued.
However, the court ruled that such acts invade individual rights under Article 21 of the Constitution. “This is not a mode of recovery mentioned in any Act or Rules. The practice of tom-tomming is an outdated and primitive method,” it added.
Reports suggest that the legal validity of the practice was not discussed by the court. However, it affirmed that banks cannot publish photographs and details of the defaulting borrowers, coercing them to repay the loans.
