The Kerala High Court while dismissing a petition said that the Kerala Co-operative Societies Act and Rules do not provide for the display or publication of photographs and other details of defaulting borrowers as a mode of recovery.
The Court held that the publication or display of photographs of defaulting borrowers will infringe upon their dignity and reputation, and violate their fundamental right to life, as guaranteed under Article 21 of the Constitution of India.
A Single Bench of Justice Murali Purushothaman passed this order while hearing a petition filed by the Management Committee of Chempazhanthy Agricultural Improvement Co-operative Society and Another.
Chempazhanthy Agricultural Improvement Co-operative Society and its Managing Committee have filed the petition challenging communication issued by the respondent, the Assistant Registrar of Co-operative Societies, directing the Secretary to remove the flex board displaying the names and photographs of defaulting borrowers in front of their head office.
It is stated that the Society has deposits amounting to Rs 28 crores, loan outstandings of Rs 12 crores, and an overdue of 59%. To recover the loan amount, the Society has filed 62 arbitration cases and execution petitions before the respondent. However, recovering the loans has proven to be highly challenging.
It is stated that, despite repeated demands made by the Society, including personal meetings with the borrowers, the Society, as a last resort, published a list of borrowers containing their names, photographs, the loan amounts due and other particulars of loan for the information of the loanees.
Since the publication, recovery efforts have been progressing, with the borrowers approaching the Society to close their loans, make partial payments, or renew their loans. Motivated by the positive response, another set is being prepared for publication in the premises of the Society.
In the meantime, the respondent issued communication directing removal of the flex board displaying the names and photographs of the defaulting borrowers. The communication stated that displaying a person’s photograph or information without their consent is illegal and informed the Secretary of the Society that the Secretary would be held legally responsible for any damages resulting from the said action.
It is contended that the Society has no funds of its own and the deposits received from members are utilized for the disbursement of loans. The loanees have a corresponding duty to repay the loan amounts on time; otherwise, the Society may collapse or be liquidated and it is the Society’s bounden duty to recover the loan, and the respondent cannot dictate terms that interfere with the recovery process if it is in accordance with the law.
It is further contended that if the “beat of tomtom” in the village, as per Rule 81 of the Kerala Cooperative Societies Rules, 1969, is permitted while the attachment and sale of immovable property, then there is nothing improper in displaying a board containing the details of the defaulting loanees. Therefore, the petitioners seek to set aside communication and to declare that the respondent has no authority to direct the Society to remove the board.
The Court noted that the board put up by the Society contains the names of 1,750 defaulting borrowers, along with the loan amounts due and their photographs. According to the petitioners, there is nothing illegal or improper in displaying a board containing the details of the defaulting loanees. Further, it is submitted that, following the display, recovery efforts have been progressing, with the borrowers approaching the Society to close their loans.
“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 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 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.
Regarding the contention based on the publication by “beat of tom-tom” under Rule 81 of the Kerala Co-operative Societies Rules, 1969, since I am not required to consider the validity of the said provision, I can only observe that the practice of tom-tomming is an outdated and primitive method that is no longer suitable for the modern era. I find no reason to interfere with communication,” the Court observed while dismissing the petition.