Madras High Court
T.Vellaiyan vs The Chief Judicial Magistrate on 20 April, 2021
W.P.No.20304 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 20.04.2021
CORAM :
The Hon'ble Mr.SANJIB BANERJEE, THE CHIEF JUSTICE
AND
The Hon'ble Mr.JUSTICE SENTHILKUMAR RAMAMOORTHY
W.P.No.20304 of 2020
and W.M.P.Nos.25083, 25086 and 25087 of 2020
T.Vellaiyan .. Petitioner
-vs-
1.The Chief Judicial Magistrate,
Salem District.
2.The Branch Manager,
REPCO Home Finance Limited,
(Promoted by Repco Bank – Govt. of
India Enterprise) No.1/5, Shanthi Plaza,
Brindavan Road, Opp to Ponnusamy Gounder,
Kalyana Mandapam, Near S.K.S.Hospital,
Salem 636 004.
3.V.Sumathi
4.T.Madhu
5.M.Sumathi
6.K.Karthik .. Respondents
Petition filed under Article 226 of the Constitution of India
praying for issue of Writ of Certiorarified Mandamus to call for the
records relating to the order of the 1st Respondent made in
Page 1 of 8
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W.P.No.20304 of 2020
Crl.M.P.No.106 of 2020 dated 09.07.2020 and quash the same as
illegal and consequently direct the respondents not to take possession
or auction or evict the petitioner without following due process law for
the property situated in S.No.5/3 C1 measuring to an extent of Acer
0.12 cents, S.No. 5/5 measuring to an extent of acer 0.04 cents,
S.No. 47/2 measuring to an extent of Acer 0.06 cents, S.No.48/1A1
measuring to an extent of Acer 0.12 cents comprised in
Kattuveppilaipatty village and R.C.C. Building their in bearing Door No.
1/100 and comprised 17 Rooms with Electricity Connection, Water
Connection, Electric Motor, lights, fans, bureau, chairs, tables and all
other apparatus connected thereto within the limit Kattuveppilaipatty
Panchayat and Valapady Panchayat Union and within the limits of Sub
Registration District of Valapady and Registration District of Salem-
East.
For Petitioner : Mr.Vijayan
For Respondents : Mr.A.Ilangovan for R-2
ORDER
(Made by The Hon'ble Chief Justice)
This is a complete misconceived petition and the desperation of
the petitioner is evident from the utterly frivolous case sought to be
made out.
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W.P.No.20304 of 2020
2. The essence of the challenge pertains to the status of the
second respondent secured creditor and the permissibility of the
second respondent to invoke the provisions of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002.
3. The petition or the further continuation thereof appears to be
inspired by a recent judgment of this Court declaring REPCO Bank to
not be a bank or financial institution to be entitled to claim itself as a
secured creditor to invoke the provisions of the said Act of 2002.
However, REPCO Home Finance Limited, even if it may be a subsidiary
of REPCO Bank or otherwise associated with REPCO Bank or promoted
by REPCO Bank, is a juristic entity on its own. There is no dispute that
by a notification dated November 10, 2003 the Central Government
has notified REPCO Home Finance Company as a financial institution
and, as such, entitled to invoke the provisions of the said Act of 2002.
The issue has been dealt with in at least two previous judgments of
this Court, but, in view of the contentions raised by the petitioner, the
same has to be reiterated.
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W.P.No.20304 of 2020
4. Section 2(1)(m) of the Act of 2002 defines a financial
institution. Sub-clause (iv) under such provision permits any other
institution or non-banking financial company as defined in Section 45-I
(f) of the Reserve Bank of India Act, 1934 to be notified by the Central
Government as a financial institution for the purpose of the Act of
2002. Such notification has been published and has remained
unchallenged from 2003.
5. The petitioner seeks to contend that though REPCO Home
Finance Limited has indicated in its counter-affidavit that it is
registered with the National Housing Bank and has been notified by the
Central Government to be a financial institution, REPCO Home Finance
Limited may not be a company to be qualified to be notified under the
relevant provision.
6. Such contention is unacceptable. REPCO Home Finance
Limited appears to be a company in the very use of the word “Limited”
as part of its name which is a requirement under the Companies Act
and is a warning to the rest of the world to be aware that the
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W.P.No.20304 of 2020
shareholders of such juristic entity have limited liability towards the
creditors of such juristic entity. It is only in special circumstances that
the word “Limited” may be dropped from the name of a company,
upon special permission in such regard being obtained.
7. There is no doubt that the petitioner is a debtor who has failed
to discharge the repayment obligations in respect of credit facilities
obtained from the REPCO Home Finance Limited. The petitioner seeks
to challenge the request made by the secured creditor to an
appropriate authority under Section 14 of the Act of 2002. Even such
aspect of the challenge is utterly misconceived once it is seen that the
creditor is a secured creditor within the meaning of the definition of
such expression in the Act of 2002.
8. Under Section 14 of the Act of 2002 a secured creditor as
defined in the said Act may approach such of the executive
functionaries as indicated in the relevant provision for assistance to
take possession of the secured asset for the sale or the like thereof.
Such provision, as has been repeated in several orders passed by this
Court, does not conceive of any process of adjudication. The
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W.P.No.20304 of 2020
provision is for administrative assistance to be extended to a secured
creditor to obtain the secured asset. The secured creditor has to
furnish certain declarations and once the declarations have been
furnished, the authority approached with the request under Section 14
of the Act has to accept the contents of the declarations at face value
and proceed to extend the assistance sought in accordance with law
within the time-frame mentioned in the provision. At any rate, Section
14 does not conceive of any notice being issued to the borrower or any
other person who may be interested in the secured asset.
9. The remedy of this petitioner was before the appropriate
Debts Recovery Tribunal. However, borrowers who failed to repay do
not choose to approach the Debts Recovery Tribunal since borrowers
are usually required to make a deposit of the amount claimed by the
secured creditor before being permitted any say. There is no doubt
that it is for such reason that this petitioner approached the Writ
Court.
10. Since there was an efficacious alternative remedy available
to the petitioner and since it is evident that the principal ground urged
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W.P.No.20304 of 2020
that REPCO Home Finance Limited is not a secured creditor within the
meaning of the relevant expression in the Act of 2002 is without basis,
W.P.No.20304 of 2020 is dismissed. Consequently, W.M.P.Nos.25083,
25086 and 25087 of 2020 are closed. There will be no order as to
costs.
(S.B., CJ.) (S.K.R., J.)
20.04.2021
Index : Yes/No
sra
To
1.The Chief Judicial Magistrate,
Salem District.
https://www.mhc.tn.gov.in/judis/
W.P.No.20304 of 2020
The Hon'ble Chief Justice
and
Senthilkumar Ramamoorthy, J.
(sra)
W.P.No.20304 of 2020
20.04.2021
https://www.mhc.tn.gov.in/judis/
