REPCO's notice has been stayed by the Kerala High Court, citing a Madras High Court judgement. REPCO is not a "bank" or a "secured creditor" as defined under the SARFAESI Act, according to the Madras High Court. A possession notice issued by Repatriates Cooperative Finance and Development Bank Limited (REPCO) under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act, 2002 was recently stayed by the Kerala High Court (Brijith M Raj v. Union of India & Ors.) REPCO's possession notice was postponed for six months by a single judge, Justice Bechu Kurian Thomas. The order was issued in light of a recent Madras High Court ruling that REPCO is not a "bank" or a "secured creditor" qualified to utilise the SARFAESI Act's provisions.
The judgement was based on a borrower's claim that the petitioner had failed to settle REPCO's debts, prompting REPCO to issue notifications for repayment and, later, to take control of his secured assets under Section 13 of the SARFAESI Act. In December 2020, the petitioner went to the High Court and was granted permission to settle his debts in 10 equal monthly instalments. The petitioner, however, was unable to do so owing to a serious financial problem, which was exacerbated by the impact of the epidemic on his firm. The Madras High Court, however, decided in SP Ganesh v. The Authorised Officer, REPCO in March 2021 that REPCO is not a "bank" or a "secured creditor" qualified to enforce the SARFAESI Act's provisions.
As a result, the Madras High Court dismissed REPCO's notifications issued under the SARFAESI Act. However, at the same time, in Kerala Fashion Jewellery v. Union of India, the Kerala High Court issued an order prohibiting the Presiding Officer, DRT Bangalore, from serving as the Presiding Officer in Additional Charge of DRT-2 Ernakulam. The petitioner moved the High Court to have the notices issued to him quashed since the job of Presiding Officer of DRT-2 remained empty and he believed there would be a considerable delay in a fresh appointment to the office. The Kerala High Court decided to grant an interim injunction suspending the notices for six months, based on the Madras High Court's decision.
Tags : #Madras High Court #Kerala High Court #SARFEASI Act #Justice Bechu Kurian Thomas #REPCO