IN THE HIGH COURT OF KERALA AT ERNAKULAM
Anil K. Narendran, Muralee Krishna S., JJ.
M/S. M.D. Esthappan Infrastructure Pvt. Ltd - Petitioner
Versus
Reserve Bank Of India Represented By Its Governor And Ors. – Respondents
RP NO.797 OF 2025, RP NO.799 OF 2025
Decided On : 28-07-2025
| Table of Content |
|---|
| 1. factual background of the case. (Para 1 , 2 , 3 , 4) |
| 2. arguments presented by the review petitioners. (Para 5 , 7 , 8 , 9) |
| 3. court's reasoning and observations. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18) |
| 4. final dismissal of review petitions. (Para 19) |
ORDER :
Anil K. Narendran, J.
The appellants in W.A.Nos.481 of 2025 and 484 of 2025 have filed these review petitions, invoking the provisions under Order XLVII Rule 1 read with Section 114 of the Code of Civil Procedure, 1908, seeking review of the judgment of this Court dated 24.06.2025 in W.A.Nos.481 of 2025 and 484 of 2025.
2. The 1st appellant in W.A.No.481 of 2025, arising out of W.P.(C)No.45166 of 2024, is M/s.M.D. Esthappan, a sole proprietorship concern, and the 2nd appellant M.D. Esthappan is the sole proprietor of the said concern. The 1st appellant in W.A.No.484 of 2025, arising out of W.P.(C)No.46514 of 2024, is M/s.M.D. Esthappan Infrastructure Pvt. Ltd., a company incorporated under the Companies Act, 1956, and the 2nd appellant M.D. Esthappan is the Managing Director of the said company. The writ petitions were filed challenging the proceedings initiated by the 3rd respondent Dhanlaxmi Bank Ltd. under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), seeking various reliefs. After considering the rival contentions, the learned Single Judge, by a common judgment dated 11.03.2025, dismissed W.P.(C)Nos.45166 of 2024 and 46514 of 2024 on the ground that the writ petitioners have not made out any case for the grant of the reliefs sought for in the writ petitions.
3. Challenging the judgment dated 11.03.2025 of the learned Single Judge in W.P.(C)No.45166 of 2024, the appellants- writ petitioners filed W.A.No.481 of 2025. The judgment in W.P.(C)No.46514 of 2024 was under challenge in W.A.No.484 of 2025. After considering the rival contentions, this Court by a common judgment dated 24.06.2025 dismissed both the writ appeals on a finding that the learned Single Judge cannot be found fault with in not entertaining the writ petitions for the reasons stated in the common judgment dated 11.03.2025.
4. Seeking review of the common judgment dated 24.06.2025, in W.A.Nos.481 of 2025 and 484 of 2025, the appellants in those writ appeals have filed these review petitions.
5. On 04.07.2025, when these review petitions came up for consideration, we heard arguments of the learned counsel for the petitioners. Since the learned counsel for the petitioners sought adjournment, the review petitions were ordered to be listed on 11.07.2025 for further arguments. On 11.07.2025, we heard further arguments of the learned counsel for the review petitioners and also the arguments of the learned Standing Counsel for Dhanlaxmi Bank Ltd. for respondents 3 and 4. During the course of arguments, the learned Standing Counsel for Dhanlaxmi Bank Ltd. pointed out that SLP(C)No.17263 of 2025 filed by the petitioners in R.P.No.797 of 2025 against the judgment of this Court dated 24.06.2025 in W.A.No.484 of 2025 ended in dismissal by the order of the Apex Court dated 09.07.2025.
6. The grounds raised by the review petitioners in R.P.No.797 of 2025 for seeking review of the judgment of this Court dated 24.06.2025 in W.A.No.484 of 2025 read thus;
“A. The impugned judgement suffers from factual and legal errors apparent on the face of the judgement, that a review of the same is warranted.
B. As per the interpretative rule of plain and literal interpretation, Ext.P2/notification does not permit this Hon’ble Court’s interpretation that only if the MSME- borrower brings it to the notice of the creditor, prior to the classification of its account/s as an NPA, that it is an MSME entitled to the benefits of Ext.P2/notification, the MSME- borrower can rely on Ext.P2, or that Ext.P2 does not have applicability if the MSME-borrower does not bring to the notice of the secured creditor of its MSME-status.
C. Ext.P2 mand
Review jurisdiction under Order XLVII Rule 1 of the CPC is limited to correcting patent errors; it does not allow for rehearing of matters on merits.
The classification of accounts as Non-Performing Assets (NPA) under the SARFAESI Act is valid if MSMEs do not timely assert their status, failing to invoke protections under the MSMED Act's revival f....
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.
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 ....
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.
The High Court should not exercise jurisdiction under Article 226 in matters governed by the SARFAESI Act where effective remedies exist, and classification of accounts as NPAs is not subject to judi....
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 raise their status before loan accounts are classified as NPAs; failure to do so precludes later claims for benefits under the SARFAESI Act.
Failure to assert MSME status prior to NPA classification precludes later claims for protection under the MSMED Act in SARFAESI proceedings.
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.
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