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2021 DIGILAW 1525 (MAD)

Jesima Banu v. Union of India

2021-04-28

SANJIB BANERJEE, SENTHILKUMAR RAMAMOORTHY

body2021
JUDGMENT : Sanjib Banerjee, C.J. 1. The only issue raised by the petitioner has been covered in several orders of this Court. The petitioner contends that the third respondent, REPCO Home Finance Limited, is not entitled to invoke the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. 2. The petitioner is aggrieved by the measures taken by the third respondent under the provisions of the said Act of 2002. The petitioner says that since the third respondent is not a secured creditor within the meaning of the definition in the relevant statute, the entire action taken by the third respondent is without jurisdiction. The petitioner says that in such circumstances, this extraordinary jurisdiction has been invoked in preference to the usual remedy available under Section 17 of the Act. In support of the petitioner's contention, the petitioner refers to a judgment of this Court rendered on March 3, 2021 pertaining to REPCO Bank. The petitioner says that since REPCO Bank is the holding entity of REPCO Home Finance Limited, the same rule as applicable to REPCO Bank would, ipso facto, apply to REPCO Home Finance Limited. 3. The contention is flawed and exceptionable. It has been noticed in several previous judgments that by a notification dated November 10, 2003, the REPCO Home Finance Limited has been recognised as a financial institution by the Central Government. In at least one of the matters dealt with by this Court, the relevant notification has been referred to on the basis of a copy thereof that was appended to the papers filed by the REPCO Home Finance Limited. 4. Section 2(1)(zd) of the Act of 2002 defines a "secured creditor". Under sub-clause (i) of Section 2(1)(zd), any bank or or financial institution or any consortium or group of banks or financial institutions holding any right, title or interest upon any tangible asset or intangible asset as specified in clause (1) of sub-section (1) of section 2 of the Act would be reckoned to be a secured creditor Section 2(1)(m) defines a "financial institution". Sub-clause (ii) in Section 2(1)(m) provides for any institution to be specified by the Central Government under Section 2(h)(ii) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. Such notification has been issued as noticed above. Sub-clause (ii) in Section 2(1)(m) provides for any institution to be specified by the Central Government under Section 2(h)(ii) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. Such notification has been issued as noticed above. As a consequence, REPCO Home Finance Limited has to be regarded as a financial institution within the meaning of Section 2(1)(m) of the Act of 2002. Since REPCO Home Finance Limited has proceeded against the security, REPCO Home Finance Limited has also to be regarded as a secured creditor within the meaning of Section 2(1)(zd) of the Act. As such, notwithstanding that the holding entity of REPCO Home Finance Limited may not qualify as a secured creditor within the meaning of the Act of 2002, REPCO Home Finance Limited eminently qualifies thereunder. 5. Since the principal ground as to jurisdiction urged on behalf of the petitioners is completely without basis and REPCO Home Finance Limited is a financial institution and, consequently, a secured creditor as defined in the Act of 2002, W.P. Nos. 10574, 10577, 10586 and 10580 of 2021 are dismissed. 6. The status of the petitioner as described in the present case is with reference to W.P. No. 10574 of 2021. However, it matters little as to whether the petitioner is a borrower or a guarantor or any other person aggrieved by any measure adopted by REPCO Home Finance Limited. For the purpose of the present discussion, REPCO Home Finance Limited has to be regarded as a financial institution and, upon a financial institution holding any security, it qualifies to be regarded as a secured creditor within the meaning of the definition in the Act of 2002. Consequently, W.M.P. Nos. 11168, 11170, 11175, 11180, 11190, 11191, 11183 and 11184 of 2021 are closed. There will be no order as to costs.