: July 05, 2013 |
: Nitin kumar
: Torts Law
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| Nitin kumar
Nitin Kumar, a Law Graduate from Symbiosis Law School, Pune. During my graduation I was one of the fortunate member of the review committee for up-gradation of Nani Palkivala book, 'Our Constitution defaced and defiled'. Hence, I believe after being a part of the committee i realized the importance education holds in the life of an individual.
Confidentiality, An Emerging Tort In India
A Study Through Decisional Laws
The Black’s Law Dictionary defines confidentiality as secrecy or the state of having the dissemination of certain information restricted. Confidentiality may also refer to the relation between lawyer and client or guardian and ward, or between spouses, with regard to the trust that is placed in the one by the other. Breach of confidentiality, then, refers to the violation of this trust that has been placed in another in a fiduciary relationship, such as which exists between a doctor and his patient, or between spouses in a marriage, or between a lawyer and his clients or even between a bank and their customers.
Breach of confidence has been seen as an independent tort in the United Kingdom, where the Law Commission in 1981 suggested that provisions be made for recognition of breach of confidentiality as a statutory tort. Any information received by either an explicit or implicit (through the fiduciary nature of the relationship) responsibility of maintaining confidence on the part of the recipient of such information, if disclosed to others may give rise to the tort of breach of confidentiality. Confidentiality is widely seen as an equitable principle and therefore the remedies may include primarily injunctions, but also damages for the pecuniary or mental losses suffered by the person whose confidence has been violated. In case the breach of confidence has profited the violator in monetary terms, these profits may also be taken into account while deciding damages. Injunction may also be used as a remedy to forestall the publication of information that may be detrimental to the person whose confidence is breached. No injunction will be granted in case the information that is ‘disclosed’ is already freely available in the public sphere e.g. if a statement is made in a courtroom the information is deemed to be in the public sphere, but if the same statement is made in camera its disclosure would be a breach of confidence.
In India, there has been growing awareness about confidentiality in recent years. The tort of breach of confidentiality in India is based upon the violation of right to privacy. There is indeed a close, nebulous relationship between the violation of right to privacy and breach of confidence when the information in question is private personal information, such as information made available in the course of marital relationships.
Ø Origin Of Right To Privacy In India
The right to privacy is not a right guaranteed explicitly by the Constitution. This is not an unusual position of law. Indeed, the right to privacy is not granted as a specific constitutional right in any country in the world. It has been derived by the Supreme Court of India using the provisions of Articles 21, 19(1)(a) and 19(1)(g) given in the Constitution. The following cases are the seminal cases in determination of right of privacy in India.
Kharak Singh Vs. The State of U.P. and Others
The plaintiff in this case was arrested on charge of dacoity, but was released due to lack of evidence. After his release, however, the plaintiff was put under surveillance as a Class A ‘History Sheeter’ by the police. He claims that after this, he was routinely disturbed at night by policemen or chowkidars who would come to his house. He had to report his whereabouts to the police officers. In case he went to another village, the police in that village would be contacted and he would be put under surveillance in the other village too.
The state took the defence that the restrictions imposed by the policemen did not violate any freedoms of the plaintiff enshrined in the Constitution. They further argued that even if the restrictions infringed on the plaintiff’s freedoms, they were simply reasonable restrictions in public interest and welfare, keeping in mind that the plaintiff had been held to be a ‘History Sheeter’.
The Supreme Court held that if the State’s actions violated the Fundamental Rights then the only way to impose restrictions was through a valid law or statutory authority and that police regulations could not be held to be “law” so the second line of argument proposed by the State did not hold.
The next obvious issue to be decided was whether any of the activities the police officers did as a part of their surveillance program de facto violated the Fundamental Rights of the plaintiff.
Secret picketing of plaintiff’s house was put forward by the plaintiff as an example infringing his freedom to move or his personal liberty being violated, but the court held the rights were not violated as the action was being done simply to keep a record of where the plaintiff was and he was not restricted from going to any place. The court also held that picketing did not affect the plaintiff’s freedom to form associations for the same reasons.
Domiciliary visits by the police officers and chowkidars during which they entered the premises of the plaintiff and searched them were also not seen to restrict his freedom of movement. The court held that such actions might constitute a tort of trespass but not a violation of Fundamental Rights.
The plaintiff also argued that enquiries by the officers on his whereabouts violated his privacy but the Court held this was not so as the plaintiff had the option of remaining silent when he was asked questions.
The court held that regulation 236(b) of the U.P. Police Regulations which authorized domiciliary visits was violative of Art. 21 and since it was not a ‘law’ it could not impose any restrictions on the Fundamental Rights. The other provisions of regulation 236(b) were held to not be flawed as the Constitution did not grant the right to privacy.
While delivering the judgment on behalf of the six judge bench, Justice N. Rajgopala Ayyangar held that
‘As already pointed out, the right of privacy is not a guaranteed right under our Constitution and therefore the attempt to ascertain the movements of an individual which is merely a manner in which privacy is invaded is not an infringement of a fundamental right guaranteed by Part III.’ [emphasis added]
On the other hand, Justice K. Subba Rao dissented by saying that
“the right to personal liberty takes (is) not only a right to be free from restrictions placed on his movements, but also free from encroachments on his private life. It is true our Constitution does not expressly declare a right to privacy as a fundamental right, but the said right is an essential ingredient of personal liberty. (…) If physical restraints on a person's movements affect his personal liberty, physical encroachments on his private life would affect it in a larger degree. Indeed, nothing is more deleterious to a man's physical happiness and health than a calculated interference with his privacy.”
This minority dissent was the first time that an opinion was expressed in the Indian judicial system that right to privacy can be read into the Constitution. However, it was not until thirteen years later that this was finally actually pronounced as a right by the Court. In 1975 the next important case in development of right to privacy in India was decided.
Govind v. State of Madhya Pradesh and Others
The facts in this case are similar to those of Kharak Singh’s case. The plaintiff in this case too was a history sheeter who was being kept under surveillance and the plaintiff here too sought a remedy on the grounds that his Fundamental Rights under article 19 (1) (a) and Article 21 are being violated. In this case too, the police undertook secret picketing of his house, domiciliary visits and the plaintiff in this case, like Kharak Singh, had to report his whereabouts to the police officer. He added further being constantly publicly harassed by the police had led to his reputation being lowered among his neighbours.
In this case, the state took the defence that the plaintiff had been repeatedly convicted for various offences over a period of nearly a decade and so was a hardened criminal which justified his being put under surveillance.
The court held that ‘Privacy-dignity claims deserve to be examined with care and to be denied only when an important countervailing interest is shown to be superior.’ Justice Mathew, while writing the judgment, also quoted an American case, Griswold v. Connecticut where Justice Douglas, while writing for the majority opinion of five judges, said that ‘protection against all governmental invasions “of the sanctity of a man's home and the privacies of life” was fundamental’.
Granting that the right to privacy can be derived from the freedom to move freely throughout the territory of India, the freedom of speech and expression and the right to personal liberty guaranteed under the Constitution, the Court held that ‘Individual autonomy, perhaps the central concern of any system of limited Government, is protracted in part under our Constitution by explicit constitutional guarantees.’
The Court however also cautioned about providing too large a scope to a right that has only been inferred from the constitution but is not explicitly outlined in it anywhere. Like Kharak Singh’s case, it was held that the right to privacy was not an absolute right, but subject to restrictions in keeping with other rights and duties. They also asserted that the individual must be protected from unreasonable official interference in his life.
It was thus held that any surveillance of the individual that went beyond the regulations set out in the Madhya Pradesh Police Regulations could be held to be void on the grounds of their unconstitutionality.
These cases which formed the very foundation of the right to privacy in India see privacy as the constitutional right that is a part of the right to life, the freedom to move freely throughout the territory of India and the freedom of speech. The tort of breach of confidence can be seen to stem from the tortuous law for protection of privacy which offers action for damages if privacy is violated. The right to privacy has not been granted as an absolute right, but comes with certain caveats such as that an individual’s right to privacy or to “be let alone” will have to be curtailed in accordance with public benefit. Though privacy and confidentiality are closely related legal concepts, they are distinct in the sense that the right to privacy is an inherent right all men have but confidentiality only exists in certain specific fiduciary relationships. Moreover, in India, confidentiality has not been given a lot of historical accord.
Ø Breach Of Confidence Regarding Original Ideas
Zee Telefilms Limited and Another Vs. Sundial Communications Private Limited and Others
This suit has been brought by the plaintiffs against the defendants for breach of copyright and misuse of confidential information. The plaintiff is a company engaged in the business of television programming, video programming, multimedia programming and feature films, television serial production etc. They come up with various creative concepts for television programme which are then registered with the Film Writers’ Association. The plaintiffs worked on various concepts and came up with a concept titled ‘Kanhaiyya’.
The concept was thereafter worked on with the title changed from ‘Kanhaiyya’ to ‘Krish Kanhaiyya’ and a detailed concept note, character sketches, detailed plot of first episode and ten episodic plots were sent to the defendant. The plaintiffs met the defendants and certain price negotiations took place after which they didn’t hear from the defendants. Then they pursued this same concept with Sony Entertainment Television who declined to produce this because the defendants had started work on the concept. The plaintiffs contended that the defendants’ fringing copy is distinctly similar to that of the original work of the plaintiffs in all material ways with a few superficial changes. It was further contended that there is clear breach of confidentiality by the defendants since plaintiffs’ work was disclosed to the defendants in confidence on the understanding that the defendants should not use it in any way except through the plaintiffs.
The court emphasizes that the law of breach of confidence is different from the law of copyright as the law of confidentiality also includes an unpublished idea that may have simply been disclosed in a relationship of trust. This case according to the court definitely lies under breach of confidentiality as there are certain similarities between the plaintiff’s concept and the concept of the television programme which was to be produced by the defendants. This is a landmark judgement as it enunciates the principle of breach of confidentiality very explicitly in the case of copying of a concept or creative idea.
Urmi Juvekar Chiang, Indian Inhabitant, Mumbai Vs. (1) Global Broadcast News Limited, Uttar Pradesh; (2) Network 18 Fincap Private Limited, Uttar Pradesh
The plaintiff in this case claimed to be a scriptwriter and she wrote a concept of a certain programme. The plaintiff asserts that the programme would follow the chosen protagonists through the quagmire of bureaucracy and conflicting interests and destructive attitudes as they tried to solve a civic problem of their choice. The plaintiff sent her concept to a certain Mrs. Rasika Tyagi of the defendants. She and a person who agreed to act as her producer, Mr. Arjun Gauirsaria, both had a detailed discussion with the defendants about the concept that the plaintiff had written. The defendants after some discussion with the plaintiff did not follow up on the negotiations. However, the plaintiff was shocked to see that a television programme with a similar concept to that of the plaintiff’s idea was being telecast by the defendants’ channel.
The plaintiff asserted that this had been done with dishonest and fraudulent intention and that the plaintiff had not granted any license to the defendants to make any television programme using her concept note. The grievances of the plaintiff against the defendants are Breach of Confidentiality by the defendants and infringement of copyright of the plaintiff.
The plaintiff demanded breach of confidentiality not on the case of public woes but in the case of her specific ‘concept’. In the present case, the grievance of the Plaintiff is not confined to exploitation of her concept or idea of staging a television reality show to highlight the woes of a common man in respect of civic problem, but also in relation to the format, the treatment, the problems and the production plan articulated by the Plaintiff in the original concept note and further developed concept notes and production plan for the programme.
The court held that as in the Zee Telefilms case, confidentiality can be claimed for a concept or an idea. The court also talks about the reasons for such a position saying that if nothing like it exists in the television sector then any broadcaster might illegitimately use some individual’s idea. So the defendant was held liable for breaching the confidentiality of the plaintiff and the court agreed to give the plaintiff ad-interim relief.
Mr. Anil Gupta and Another. Vs. Mr. Kunal Dasgupta and Others
In this case the plaintiff conceived the idea of producing a reality television programme revolving around the process of match making to the point of actual spouse selection in which real everyday ordinary persons would participate before a TV audience. The plaintiff decided to name the concept 'Swayamvar' knowing that a large number of people would associate the name with the idea of a woman selecting a groom in a public forum and that would create the necessary instantaneous recall and recognition of mythological Swayamvar in the minds of a large number of people and give the program a head-start. This concept was registered under the Copyright Act. Then the plaintiff then developed the idea under his production house. He then went to the defendants explaining his concept and gave various details about his concept such as a vibrant anchorwoman, marriage related games, rituals etc.
The counsel for the plaintiff contends that this meeting was done in utmost confidentiality. After that the defendants did not follow up in the meetings that were held later despite expressing interest in the concept. Then the plaintiff was surprised to see that the defendants had started doing promotional publicity for a programme ‘Shubh Vivah’ which was based on the same concept of a reality show based on arranging marriage. The counsel contended that this resulted in a breach of copyright and confidentiality.
In the words in the judgement, “the counsel has also contended that breach of trust or confidence give a broader right then breach of copyright. Ideas and information which has been acquired by the defendants under confidentiality and if the defendant acts and makes a reality show on the basis of the concept and format supplied by the plaintiff, in such circumstances it would be a breach of good faith on the part of the defendant to exhibit or telecast any show and defendants cannot take recourse of any pretext or excuse for doing so and in such eventuality the Court may restrain the defendants by granting an injunction.”
On the other hand, the counsel for the defendants has argued that there is no breach of confidence or copyright if the object in question is under public domain. It was contended that what was given to the defendants was a very vague and rough preliminary note which neither can amount to any work nor original work and certainly no presentation was given to the defendants.
The court however found that it cannot be said that the defendants were under no obligation to maintain confidentiality in view of the fact that a concept note was seen by the defendants. The court thus restrained the defendants from transmitting or enabling the transmission by television of the programme entitled 'Shubh Vivah' or any other programme or transmission whatsoever having its subject or theme of match making for a period of four months from the date of the order. After that, the court decreed that if no television programme named ‘Swayamvar’ was broadcasted by the plaintiffs within four months then the defendants were free to broadcast whatever they wanted.
The researchers have analyzed three cases on confidentiality in the case of intellectual property rights namely Urmi Juvekar Chiang case , Zee Telefilms case and Anil Gupta vs. Kunal Dasgupta case. The facts of the cases are similar, namely that in all three the plaintiffs are companies or people who have made the creative concept of a television programme and they have shown the concept to a certain television channel which after first rejecting the ideas has started broadcasting programmes based on their concepts without their permission. The plaintiffs alleged that the defendants had thus committed breach of confidentiality which was reposed in them by the plaintiff upon the plaintiff confiding the creative ideas in the defendants. In all three cases as all facts pointed towards the borrowing of a concept or an idea the court, decided in the plaintiff’s favour.
The court’s position on these kind of cases is that borrowing of an idea or concept without permission constitutes breach of confidentiality. The court, using has said that this right to confidentiality is vested in the right to privacy in the constitution. In our view this represents a very positive development as it explicitly stops somebody using somebody else’s creative idea based on the right of confidentiality. This is a positive social development because if any individual approaches somebody with a creative idea and his ‘confidence’ is violated then the individual is given a way to beget justice which is the actual aim of the tort, to ensure that victim gets compensation for a loss which can only happen if a legal injury exists.
Ø Breach Of Confidentiality Of Data
The position in India on confidentiality of data including details of clients of a company, and other trade secrets that may have been learnt during the course of employment is elucidated in the following cases.
Burlington Home Shopping Pvt. Ltd. Vs. Rajnish Chibber
The plaintiff Burlington home Shopping Pvt. Ltd. was a mail order service provider that retails directly to its customers by sending them mail order catalogues. A list of customers was maintained for the same reason. This list had been prepared by the plaintiffs over a period of three years.
The defendant was an employee of the plaintiffs’ during the period of compilation of the database, but was not involved with the actual compilation of data. The plaintiffs contend that the defendant, who after quitting his job with the plaintiffs established his own mail order service, used their database, a copy of which he had taken from the premises of the plaintiff, to set up his own clientele. The defendant denies using the list and affirms that he is using data he has collected himself.
However, upon investigation by the court it was found that there were remarkable similarities between the original list and the list used by the defendant, including errors in spellings at the same places. It was held that a mail order catalogue can be considered a trade secret and so the defendant breached confidentiality when he took the data collected by his former employers out of their office for his personal use. The court granted an interim injunction preventing the defendant from utilizing the data while the suit was going on.
American Express Bank Ltd.Vs. Ms. Priya Puri
The plaintiff is a banking company and the defendant had worked with them as the head of their wealth management program for Northern Region. The plaintiffs alleged that the defendant, who had at the time the suit was filed quit her job with them and taken up employment with a competitor bank, was using data collected from clients of the plaintiff in order to induce those clients to shift to the competitor bank. Plaintiff sought permanent injunction to prevent defendant from using data of customers of plaintiff’s bank (of which defendant was an erstwhile employee) particularly data related to customers’ wealth management plans in order to solicit those customers. They alleged her actions constituted breach of confidentiality term included in her letter of employment and breached their code of conduct concerning customer privacy policies.
The defendant held that working as a relationship manager, she had gotten to know the clients in question quite well and her usage of their names and phone numbers did not constitute any breach of confidence, particularly since these names and phone numbers were not confidential information gathered by the bank as they were freely available in the public sphere. She submitted that she had obtained the data from the directories of various organizations to solicit customers for the plaintiffs while working for them.
The court further observed that by simply having the names and phone numbers of clients the defendant could not have induce the clients to switch to competitor banks, and therefore the defendant probably had not obtained any data from the plaintiffs as alleged. The court held that it was the prerogative of the customers to decide which bank they wished to associate themselves with, observing,
“The option of the customers/clients to bank with any one can not be curtailed on the plea of confidentiality of their details with any particular bank. Creating a data base of the clients/customers and then claiming confidentiality about it, will not permit such bank to create a monopoly about such customers that even such customers can not be approached”
The perpetual injunction demanded by the plaintiffs was not granted.
Mr. Diljeet Titus, Advocate Vs. Mr. Alfred A. Adebare and Others AND Ms. Seema Ahluwalia Jhingan and Others Vs. Titus and Co. and Others
The plaintiff ran a law firm and he claimed the defendants had been his employees. When they decided to leave the plaintiff’s law firm and start another law firm of their own the defendants allegedly took with them data concerning firstly, a list of clients and secondly the legal advice and opinions the clients were offered at the firm. Mr. Adebare also took with him 3,000 visiting cards from the plaintiff’s office before leaving.
It was argued that since the Bar Council of India Rules assert that all advocates must abide by Section 126 of the Indian Evidence Act which prohibits them from making any disclosures pertaining to communications between the attorney and client during the course of the attorney’s professional employment, subject to the certain exceptions outlined in the Act, the plaintiff is duty-bound to safeguard the confidentiality of his clients. The confidential nature of the information contained in the documents in question was heightened since it pertained to legal advice given to client companies seeking to enter the Indian market. The judge held that
“there can be little doubt that the information between a client and his advocate has the necessary quality of confidence and when it is imparted there is an obligation of confidence. The defendants have not worked for the clients but for the plaintiff and thus when they take away the duplicate information, there is unauthorized use of information”
Thus taking this data breached confidentiality in two manners – as a breach of confidence towards the clients whose cases were discussed in the data, and breach towards the plaintiff since the data concerned confidential information pertaining to his firm, the court finally restrained the defendants from making use of the material obtained by them from the plaintiff or disseminating it in any form. Reaffirming the fundamental need for viewing breach of confidence as a tort, the judge said,
“If the defendants are permitted to do what they have done it would shake the very confidence of relationship between the advocates and the trust imposed by clients in their advocates”
In the second case of American Express Ltd. Vs. Ms. Priya Puri, the defendant had utilized information freely available to provide benefits to the competitor bank and simply because the plaintiffs lost their customers it did not constitute a violation of any legal right vested in them. The situation, thus is clearly one of damnum sine injuria, and the plaintiff can avail of no remedy under tort law.
In the first case of Burlington Home Shopping Pvt. Ltd. Vs. Rajnish Chibber, unlike in American Express Bank Limited v Priya Puri, the information concerning the clients of the plaintiff was deemed to have been not such as is freely available in the public domain but in fact it is an original literary work since it was accumulated by the plaintiff. It was not simply a collection of phone numbers and addresses but a list of regular customers of the plaintiff’s mail order service, compiling which would require considerably greater judgment and skill. Moreover, in American Express Bank Limited v Priya Puri the plaintiffs failed to prove the existence of any documents in possession of the defendant as were alleged whereas in this case the defendant was found to possess a copy of the plaintiff’s database which he had removed from the offices of the plaintiffs, thus constituting a breach of the confidence reposed in him by his former employers.
This position of law was upheld once again in Mr. Diljeet Titus, Advocate Vs. Mr. Alfred A. Adebare and Others when the court upheld that the information which was taken by the defendants was confidential information that the clients had revealed to their lawyers only in good faith that the information would be kept confidential and the employer had, in turn, revealed the same information to his employees keeping in mind that it would be kept private. The courts recognized in these cases that breach of confidentiality causes legal injury to the persons whose confidentiality is violated and such persons have the right to approach the courts for remedies under tort law.
Ø Breach Of Confidence Of Patients
Mr. X vs. Hospital Z
In this case the plaintiff was going to marry a certain Ms. Y but the marriage was called off on the grounds of a blood test conducted at a certain hospital Y which purported that the plaintiff was HIV ve. The plaintiff then approached the National Consumer Disputes Redressal Commission for damages against the defendants, on the ground that the information which was required to be kept secret under medical ethics was disclosed illegally and, therefore, the defendants were liable to pay damages. The counsel for the plaintiff had contended that the principle of ‘duty of care’, as applicable to persons in the medical profession, includes the duty to maintain confidentiality and since this duty was violated by the respondents, they are liable in damages to the appellant.
A Code of Medical Ethics has been made by the Indian Medical Council which, provides as under ‘Do not disclose the secrets of a patient that have been learnt in the exercise of your profession. Those may be disclosed only in a court of law under orders of the Presiding Judge.’ The plaintiff’s counsel thus argued that the defendants were under a duty to maintain confidentiality on account of the code of medical ethics. However the court held that the proposed marriage carried with it the health risk to an identifiable person who had to be protected from being infected with the communicable disease from which the plaintiff suffered.
The court also uses what the General Medical Council of Britain says about HIV infection, “When diagnosis has been made by a specialist and the patient after appropriate counselling, still refuses permission for the general practitioner to be informed of the result, that request for privacy should be respected. The only exception would be when failure to disclose would put the health of the health-care team at serious risk. All people receiving such information must consider themselves to be under the same obligations of confidentiality as the doctor principally responsible for the patient's care. Occasionally the doctor may wish to disclose a diagnosis to a third party other than a health-care professional. The Council think that the only grounds for this are when there is a serious and identifiable risk to a specific person, who, if not so informed would be exposed to infection .... A doctor may consider it a duty to ensure that any sexual partner is informed regardless of the patient's own wishes.”
This an explicitly clear guideline helping the court make a decision in the defendant’s favour.
The right to confidentiality, if any, vested in the plaintiff was not enforceable in that situation. As the right to confidentiality in India is because of the right to privacy under Article 21 and the cases of Kharak Singh vs. State of U.P and Govind vs. State of M.P. the court held that like all other rights this right is not absolute and subject to reasonable restrictions.
The court held that if the marriage had proceeded in due course, then Ms. Y would surely have been infected with the deadly disease AIDS and then her ‘right to life’ that is, the right to lead a healthy life would be violated. Thus in the interest of public morality the court decided that the appeal of the plaintiff is without merit.
Doctor patient confidentiality is held to be one of the sacrosanct rights according to the Hippocratic Oath and it is codified in India in the form of the Code of Medical Ethics by the Indian Medical Council under the Indian Medical Council Act, 1956. This bases itself on the International Code of Medical Ethics. That right is that a doctor can not divulge details of the patients being treated by him even after his death except in a court of law. According to the researchers this right is extremely important as it gives legal remedy to people wronged by medical practitioners who have violated such an important right.
In India the most important case is X vs. Hospital Z as it showcases an exception to action against breach of confidentiality. It says that the right to confidentiality has some exceptions associated with it. In that case the judge states, “Circumstances in which the public interest would override the duty of confidentiality could, for example, be the investigation and prosecution of serious crime or where there is an immediate or future (but not a past and remote) health risk to others”. Here we understand that in the interests of the public override that of the specific person whose confidentiality was breached. In our view this is desirable as ‘blind enforcement’ of rights without taking into consideration public welfare does not help anybody. So the courts’ position is that this right is important and justifiable except in various situations such as in cases of public morality.
Ø Breach Of Customers’ Confidence By Banks
Kattabomman Transport Corporation Limited Vs. State Bank of Travancore, Trivendrum and Others
In this case, the appellant approached the defendant’s bank to ask them to furnish the bank records of one of their employees.
The plaintiffs had, in a previous case, been ordered by a division bench of the Madras high court to pay the same employee a sum of money as wages for the period of six years that he had been out of service i.e. between the date of dismissal and the date of reinstatement. However, the order carried a caveat that the employee would have to repay the money reimbursed to him by the plaintiff if it was found that he was employed for any duration during the course he is purported to have been ‘out of service’.
The bank received information that during the period he claimed to be ‘out of service’ the employee had, in fact, been working as a driver at the Doha International Airport, earning a respectable salary and had been sending money back home to the State Bank of Travancore branch in Kanyakumari to an account he jointly held with his wife.
The plaintiffs then sought to gain details of the transactions carried out by the employee in that account to prove that he had been gainfully employed elsewhere during the period for which reimbursement had been sought. The bank declined to give the details of the employee’s bank account, saying that they had to maintain confidentiality of their customers. The single judge in the high court of kerala held that the provisions of Section 52 of the State Bank of India (Subsidiary Banks) Act, 1959 imposed a duty of confidentiality upon the bank. The plaintiffs preferred a writ appeal against this holding.
It was observed that Section 6 of the Bankers' Books Evidence Act, 1891 states that the bank may be required to show its books to a party in a legal proceedings in case their inspection was required in legal proceedings provided that the facts of the case make the inspection necessary for such proceeding. In the case of Shankarlal agarwalla v state bank of India the Calcutta high court held that the bank did owe a duty of confidence to its customers, the violation of which could give rise to a claim for damages. However, this duty was held to be qualified and subject to certain restrictions, including the case wherein a higher duty, namely the duty towards the public could prevail over the private duty of secrecy the bank owed its customers as their agent. The court held that since the plaintiff company had been held to be a state corporation, if they were made to compensate an employee on a fraudulent claim that would amount to misuse of public funds and thus the bank was under a duty to the public to ensure that public funds were not misused. Also, the plaintiffs required the information from the bank in order to fulfill an order given to them by a court of law and so they further require the assistance of the bank in carrying out their public duty.
Keeping the points mentioned above in mind, the Court ordered the defendants to furnish the details of the remittances made by the employer during his period of stay outside the country.
District Registrar and Collector, Hyderabad and Another Vs. Canara Bank Etc
Section 73 of the Indian Stamp Act, 1899 as incorporated by Andhra Pradesh Act No. 17 of 1986, by amending the Central Act in its application to the State, had been struck down by the High Court of Andhra Pradesh as against the provisions of the Indian Stamp Act as also of Article 14 of the Constitution. That Section 73 basically purported that any public officer who has in his custody any registers, books, records, papers, documents or proceedings which have any public purpose such as discovery of fraud etc. shall allow anybody authorized for that purpose by the Collector to inspect the same at any reasonable time without charging any fee. The amended Section 73 however held that the same person who inspects those documents can ask for payment for proper stamp duty if the documents are not duly stamped records, papers, documents or proceedings.
There were writ petitions filed by many banks and other companies challenging amendment of Section 73 on ground that it empowered any person authorized in writing by collector to have access to documents in private custody or custody of a public officer without regard to fact whether documents were sought to be used before any authority competent to receive evidence. The plaintiffs also contested that the law was unconstitutional as it interfered with personal liberty of citizens as it allowed intrusion into privacy and property of citizens.
An element also given by the prosecution was confidentiality in the case of bank records. This case talks about the fact that can the Collector authorize ‘any person’ to examine the bank records. The right to privacy of the customers of the bank is thus violated here as well.
The court held that the Karnataka government should revert the law back to its original state as the law is unconstitutional and as held in the Kharak Singh case there exists a certain right to privacy which would be violated by this law.
Mr. K.J. Doraisamy Vs. The Assistant General Manager, State Bank of India, Erode Branch and The Chief Manager (PBD), State Bank of India, Erode Branch
The plaintiff in this case had taken a loan of Rupees six lakhs only from the State Bank of India. After he defaulted on his monthly payments and did not respond to notices, the bank warned the plaintiff that they would recover the loan by selling off the security and that they would also print the particulars of the properties and photographs of the plaintiff and the surety in English newspapers as well as the local Tamil newspapers.
The plaintiff alleged that publication would violate his right to privacy granted to him under Article 21 and sought the writ of Mandamus to refrain defendants from publishing the details and photographs. Plaintiff also alleged that the bank owes a duty of secrecy and confidentiality to its customers, in this case the plaintiff, to not disclose their confidential information.
However the court held that the bank’s duty of confidence could be surpassed by larger public interest and in some cases the interest of the bank. The bank contended that their actions were in the best of public interests because loan defaulters must be strongly discouraged. The court held that since the Right to Information Act 2005 was in force, public authorites ( such as the bank ) were obliged to disclose information to the public suo moto, and this would include even confidential information supplied by one party to another in a fiduciary relationship so long as the information is in the larger public interest. It was also held that no legal right of the plaintiff is being violated by the defendant’s threat of publishing his details and photographs on the papers.
The court thus dismissed the plaintiff’s plea for a writ petition.
Since there is no legal right vested in the plaintiff that would prevent the bank from making the disclosures that were held to be in larger public benefit, this is a case of damnum sine injuria and the defendant cannot be held liable.
The position of courts in India in the case of confidentiality of bank records is that a bank holds a duty of confidence to its customers about the records that it has of the customers. The researchers have analyzed three cases to show where this duty applies and where their is an exception.
In the case of K.J Doraisamy the issue was about the publication of a photograph of a loan defaulter which was supposed to violate the right to privacy of the plaintiff. But the court held that as bank’s duty of confidence was surpassed by public interest and the bank’s interest. This shows that an exception applies to this confidentiality whenever anything of public interest comes up as is similar in many other confidentiality related tort action.
In the case of Kattabomman the plaintiffs wanted the details of bank transactions from a bank because they needed the details to check whether they needed to pay a certain sum of money to his employer according to a court order. The court held that the duty of confidence that the bank owed to its customers was subject to certain restrictions because they owed a higher duty to the public. This case also applies an exception to the right to confidentiality in the interest of public good. Another reason given was that this information was required because the employer required this information to fulfil an order given by court. This case also shows how certain exceptions apply to this bank customer confidentiality.
The case of Canara Bank vs. District Collector is about a certain legislation that the Andhra Pradesh government had amended. The legislation apart from violating the right to privacy, was also against the right of the confidentiality of bank records as any person authorized by the collector could examine those records. This case called the amendment unconstitutional and upheld the principle of confidentiality in the case of bank records.
Thus the conclusion is that in the case of breach of confidence in case of bank records the view of law is that barring a special case of public morality or public interest the court holds that the bank owes a duty to its customers not to reveal its records to anyone.
In the present article, it has been the endeavour of the author to project the formation of confidentiality as a tort in India. This has been done by studying various decisional laws.
After examination of various case laws in different fields of law relating to confidentiality the researchers have found that the tort has emerged from the right to privacy enshrined in our constitution in Article 21 which talks about the right to life. It is the dynamism of the judicial system of India which has recognised the relevance of the tort concerned and encompassed many liberties given to the people in a constitutional article which just talks about the right to life and personal liberty. We think that this is an extremely positive development as it addresses the issue of tort law’s main function, which is to compensate a party which has suffered damage. It also addresses the concept of law of ‘tort’ over law of ‘torts’ as law of ‘tort’ is formed whenever there exists an injury which deserves damages.
The researchers believe that there is a social need for this right to confidentiality in the case of commercial activities as a lot of them can get jeopardized and socially, this right would guard the right of privacy of all individuals and groups.
In India, there are various different kinds of cases where breach of confidentiality has emerged as a tort namely, data confidentiality between employer and employee, doctor patient confidentiality, creative concept confidentiality, bank customer confidentiality etc. The researchers have found a common thread of decisions between the cases of all these types. Mostly, the court recognizes that there exists a case of breach of confidentiality in normal conditions. Under cases of public morality or public interest the right to confidentiality is often revoked. In some cases, the court has held that in fact there was no breach of duty.
However, with all respect, it is suggested that Indian courts start recognizing the right to confidentiality separately as in various other countries because it would also include cases which are not a part of right to privacy and deserve damages due to breach of confidentiality alone.
Corporate reorganization and corporate restructuring are interchangeable terms. There are various manners in which a corporate reorganization could take place but let us first look into the reasons as to why a corporation would go for such a change. One reason could be to reduce the risks involved on business and others could be to deal with the tough competition in the market.
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