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Synopsis

The Kerala High Court has held that a lender cannot resort to publishing photographs and details of defaulting borrowers as a coercive method to secure loan repayment. The court emphasised that such actions infringe borrowers’ dignity and privacy, and cannot be justified under existing legal provisions.

A Single judge bench of Justice Murali Purushothaman, observed: “The publication or display of photographs and other details of defaulting borrowers in public will be an invasion on the right of the borrowers to live with dignity and reputation. Such deprivation of life and personal liberty cannot be made except according to procedure established by law. The publication or display of the photographs of defaulting borrower will infringe upon their dignity and reputation, and violate their fundamental right to life, as guaranteed under Article 21 of the Constitution of India.”

The court made the observation while hearing a writ petition filed by the Chempazhanthi Agricultural Improvement Co-operative Society and its Managing Committee, challenging an order by the Assistant Registrar of Co-operative Societies. This order directed the removal of a flex board placed outside the Society's head office, which displayed the names, photographs, and loan details of 1,750 defaulting borrowers.

The petitioner- society argued that the flex board was a last resort after repeated recovery attempts failed. Following the board's installation, the petitioner claimed, several borrowers approached the Society to settle their debts or restructure their loans. Motivated by this response, the Society began preparing another set of such displays to continue recovery efforts. The society justified their actions comparing the display to the “beat of tom-tom”, a practice permitted under Rule 81 of the Kerala Co-operative Societies Rules, 1969. The Assistant Registrar, however, deemed the display illegal, citing a lack of borrower consent and potential legal consequences for damages arising from this public exposure.

The State, represented by Government Pleader Resmi Thomas, defended the Assistant Registrar’s directive, asserting that the Society had no legal authority to resort to such methods for loan recovery. The respondents emphasised that publishing personal details or photographs without consent breaches privacy and damages reputation, thus contravening constitutional rights.

The court dismissed the Society's justifications, categorically stating that such public displays are not a permissible method of loan recovery under the Kerala Co-operative Societies Act or its Rules. “The Kerala Co-operative Societies Act and Rules provides for various modes of recovery of debts due to the Co-operative Societies, execution of orders and awards including attachment and sale. The Act and the Rules do not provide for the display or publication of photographs and other details of defaulting borrowers as a mode of recovery. The borrowers cannot be coerced to repay the loans by threatening to damage their reputation and privacy,” the court noted.

While addressing the analogy to “beat of tom-tom,” the court described it as an “outdated and primitive method that is no longer suitable for the modern era.” However, it refrained from deciding the validity of the practice, as it was not directly challenged in the case.

In conclusion, the court dismissed the writ petition and upheld the Assistant Registrar’s communication directing the removal of the flex board.

 

Cause Title: The Management Committee of Chempazhanthi Agricultural Improvement Co-operative Society & Another v. The Assistant Registrar of Co-operative Societies [WP(C) No. 45919 of 2024]

Advocates P. N. Mohanan, C. P. Sabari, Amrutha Suresh, Gilroy Rozario appeared for the Petitioners.