MSME Borrower cannot later use MSME status to challenge SARFAESI proceedings if MSME status was not initially raised – P.K. Krishnakuma and Anr. Vs. Induslnd Bank and Ors. – Kerala High Court
A Division Bench of Hon’ble Kerala High Court held that:
(i) In cases where a borrower who qualifies as MSME does not initially raise its status to challenge a bank’s recovery proceedings under the SARFAESI Act but instead participates fully in the process without objection, cannot later use their MSME status to argue that the proceedings were without jurisdiction.
(ii) When the Appellants, by their actions, accepted the Bank’s authority without objection, the High Court will refuse to exercise its writ jurisdiction to assist such Appellants, even if there are questions about the jurisdiction of the Bank.