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IN THE HIGH COURT OF KERALA AT ERNAKULAM
MR. JUSTICE GOPINATH P., J
OJIN BAKES – Appellant
Versus
UNION OF INDIA – Respondent
JUDGMENT :
The petitioners are before this Court challenging the proceedings initiated under the provisions of theSecuritisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) for recovery of amounts due under credit facilities availed by the petitioners from the respondent bank. It is their specific case before this Court that they are registered as Micro, Small or Medium Enterprises (MSME) and therefore the proceedings under the SARFAESI Act could not be taken without following the guidelines issued by the Reserve Bank of India (RBI) read along with the notification issued by the Government of India in the Ministry of Micro, Small and Medium Enterprises in terms of the power conferred under Section 9 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as the ‘MSMED Act’) laying down the framework for revival and rehabilitation of MSMEs.
2. The learned counsel appearing for the respondent bank submits that the issue raised in these writ petitions is squarely covered against the petitioners by a Division Bench judgment of this Court in Krishnakumar P.K. v. IndusInd Bank ; 2024 (6) KLT 606, whe
MSMEs must raise their status before loan accounts are classified as NPAs; failure to do so precludes later claims for benefits under the SARFAESI Act.
MSMEs must timely assert their status to benefit from statutory protections under the SARFAESI Act; failure to do so precludes them from raising claims at a later stage.
Borrowers classified as MSMEs must assert their status timely to benefit from protective frameworks; failure to do so precludes relief under the SARFAESI Act.
Borrowers classified as MSMEs must assert their status before NPA classification to invoke benefits under the SARFAESI Act; failure to do so precludes subsequent claims.
A registered MSME must disclose its status before NPA classification to invoke protections under relevant frameworks; failure to do so precludes later challenges to recovery actions.
Borrowers classified as MSMEs must assert their status before NPA classification to invoke benefits under the SARFAESI Act; failure to do so precludes subsequent claims.
MSMEs must assert their status timely to claim protections under the MSMED Act; failure to do so prior to NPA classification precludes relief from SARFAESI proceedings.
The court upheld that simultaneous proceedings under the SARFAESI Act and the Recovery of Debts and Bankruptcy Act are permissible, and reiterated principles of res judicata and the responsibilities ....
Failure to assert MSME status prior to NPA classification precludes later claims for protection under the MSMED Act in SARFAESI proceedings.
A borrower classified as an MSME must promptly disclose their status to the banks to receive protective benefits, failing which they cannot contest recovery actions post their NPA classification.
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