Recently, the Kerala High Court recently stayed a possession notice issued by Repatriates Cooperative Finance and Development Bank Limited (REPCO) under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act, 2002 .
The court stayed the possession notice issued by REPCO for a period of six months.
In the light of a recent judgment of the Madras High Court, the order was passed which had held that REPCO is not a ‘bank’ or a ‘secured creditor’ eligible to invoke the provisions of SARFAESI Act.
A plea was made by the borrower basis on which the order was passed which stated that the petitioner failed to repay his dues to REPCO, in view of which REPCO had issued notices for repayment and later for taking possession of his secured assets under Section 13 of the SARFAESI Act.
In December 2020, the petitioner had approached the High Court where he was allowed to pay off his dues in ten equal monthly instalments. But unfortunately due to pandemic he suffered Financial crisis and he failed to do the same.
In March 2021, the Madras High Court passed the said order in SP Ganesh v. The Authorised Officer, REPCO and quashed the notices issued by REPCO under the SARFAESI Act.
Taking into account the said juadgement the petitioner in the instant case filed a securitisation application before the Debts Recovery Tribunal (DRT)-2, Ernakulam to set aside the notices and to permanently restrain REPCO from proceeding further under the said notices.
The petitioner apprehended that there might be significant delay in new appointments to the post as the post of Presiding Officer of DRT Ernakulam continued to be vacant, so he approached the High Court to quash the notices issued to him.
Considering, the judgement Madras High Court, the Kerala High Court saw it fit to issue an interim order staying the notices for six months.