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Demonstration By Bank Officials In Front Of Defaulter’s House Violates His Right To Privacy: Kerala HC

Banks have to take recourse to legal remedies for recovery of loan arrears. They cannot carry out “halla bol” or similar demonstrations in front of the house of a borrower. This observation was made by the High Court of Kerala in a petition which challenged such ‘innovative’ methods adopted by banks.

The petition was filed by one Anil Kumar, who had availed a ‘Mudra Sishu Loan’ of Rs.50,000/- from the Corporation Bank. According to him, an amount of Rs.25,105/- was outstanding in the account, including accrued interest. He alleged that the Chief Manager of the Bank along with a group of nearly 10 employees marched to his house, holding placards “refund public money”. He was deeply aggrieved by such public protests, and wrote a letter to the bank complaining about it. However, the bank maintained that it had the right to do, and declared that it will hold “halla bol” protests at frequent intervals until arrears are cleared.

When the petition came for admission, Justice Dama Seshadri Naidu passed the following order :

“The bank can still have its legal methods of recovery. The Court does not come in the way. But its officials cannot conduct any sort of “halla bol” demonstration in front of the petitioner’s house. Prima facie, it affects petitioners right to privacy – a most cherished fundamental, though unenumerarted right”.

Earlier, the High Court of Kerala had held that banks cannot “name and shame” a loan defaulter by publishing his photographs, as per a judgment given by Justice V Chitambaresh(Venu P.R v. SBI 2013(3) KLT 691). However, the Madhya Pradesh High Court has taken a contrary view, and  held that there was no bar in publishing photographs of defaulters.

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  • Narendra Kumar Sahoo says:

    In most cases bank never follows the RBI Guidelibes for recovery of loan, bank engage private mussle man for recovery of loan in violation of direction of Hon’ble Supreme Court, bank do not follow proceedure for hand holding stage, bank do not take timely step for declaring account to NPA, bank do not inform OTS rules and detail benifits or exemptions and regarding interest waive as per OTS scheme, most important and unfortunate to say that bank officials threat and humiliate the public for recovery of public money as the loanee is also public, hence bank officials should keep regular visit to the loanee and in the event of default should inform regarding OTS scheme or should follow the hand holding stage proceedure of bank which compells the loanee to approach the court of law. It is often seen that bank tries to recover loan at the cost of life of a loanee for which there are several examples of suiside by loanee for default of loan. In above premises if any one differs with any of above fact may contact me, I can give complite proof of above facts.

  • Abc says:

    It means Banks have made a blunder by highlighting the name of Vijay Mallya and Neerav Modi, afterall they are also citizens of India and having the Right of Privacy. But it seems that there are always the decision of Individual judge, one is saying it ” right of privacy” and another is saying “there is nothing wrong in even publishing the photograph of defaulters”.

    But in all this, Being a taxpayer and also a Citizen of India, I have also have a fundamental right that someone who is not paying and due to which I am paying a higher Interest Rate on the advances I have availed. I should also the right to get the details of the defaulters as well as to initiate legal action against these defaulters.