By LE Desk
Chennai, March 8: The Repatriates Cooperative Finance and Development Bank Ltd (REPCO Bank) cannot be regarded as a bank or a secured creditor within the meaning of the relevant word and expression in the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002, the Madras High Court has ruled.
A bench of Chief Justice Sanjib Banerjee and Justice Senthil Kumar Ramamurthy gave the ruling while allowing a writ petition from a loan defaulter.
“As a consequence, the respondent (Repco) cannot resort to any of the measures indicated in the Act, whether under Section 13 thereof or otherwise,” the bench said, news agency PTI reported.
One S P Ganesan had obtained credit facilities from REPCO. Upon the perceived failure on his part to repay the dues within the time,possession notice was issued against him on November 15, 2019 for taking possession of the secured assets.
The petitioner contended that REPCO was not a bank at all and could not be regarded as a secured creditor within the meaning of the relevant expression in the 2002 Act. All steps taken by Repco under the Act were void and completely without jurisdiction, he added. Allowing the petition, the bench observed that Repco had no recourse to the writ petitioner or to pursue a defaulting debtor. If it had obtained securities, it should have carried the claim to an appropriate forum, possibly a civil court and invoke the Code of Civil Procedure, 1908 that had recently gone out of fashion after bank claims had been parked with a tribunal and taken beyond the pale of the sovereign court system, the bench said.
It set aside the notice issued by Repco under the 2002 Act and all the steps purported to be taken under the statute.