SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

2025 Supreme(Ker) 2338

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

Advocates:
Advocate Appeared:
For the Petitioner: Sri. Mathews J. Nedumpara (Sr), Smt. Maria Nedumpara, Shri.Shameem Fayiz V.P.
For the Respondent: Sri. C.K. Karunakaran, Counsel, Smt. O. M. Shalina, Dsgi, Smt. Nisha Bose, Sr. Gp, Sri. Ajith Krishnan, Sc, Sri. Abel Tom Benny, Sc, M. U. Vijayalakshmi, Sc

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.

Headnote:(A) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Review petitions filed against the judgment dismissing writ appeals challenging proceedings initiated under the SARFAESI Act - Court found no merit in the review petitions, stating that the appellants had not raised claims at an earlier stage and were precluded from doing so post-classification as NPA. (Paras 1-2, 4-5, 10-11, 19-20)

(B) Review Jurisdiction - The court reiterated that review is not an appeal in disguise and can only correct patent errors, not rehear matters on merits. The grounds raised did not meet the criteria for review under Order XLVII Rule 1 of the CPC. (Paras 17-19)

Facts of the case:
The appellants, a company and its sole proprietor, challenged the classification of their loan accounts as Non-Performing Assets (NPA) by Dhanlaxmi Bank Ltd. under the SARFAESI Act, claiming violations of notifications under the MSMED Act. The learned Single Judge dismissed their writ petitions, leading to these review petitions.

Findings of Court:
The court found that the appellants had failed to raise the MSME status before the classification of their accounts as NPA and that the learned Single Judge's decision was consistent with the law laid down by the Supreme Court.

Issues: The main issues included whether the appellants could raise the MSME status after the classification of accounts as NPA and the appropriateness of the learned Single Judge's dismissal of the writ petitions.

Ratio Decidendi: The court ruled that borrowers must notify the bank of their MSME status before the classification of accounts as NPA and that the review jurisdiction cannot be used to challenge the merits of a decision.

Result: Review petitions dismissed.

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

Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top