Recording Court Proceedings & Circulating On WhatsApp Can Constitute Contempt Of Court: Kerala High Court
The Kerala High Court made such an observation while considering Petitions filed against the proceedings initiated by the Bank under the SARFAESI Act.
While considering the petitions filed against the proceedings initiated by a Bank under the SARFAESI Act, the Kerala High Court noted that the proceedings of the Court were recorded and circulated in various WhatsApp groups. The High Court held that such actions constituted contempt and also asked the Registry to place the matter before the Chief Justice to decide whether action could be taken against Advocate Mathews J. Nedumpara for the alleged circulation.
The Petitioners filed the Writ Petitions on the ground that the proceedings initiated by the respondent Bank under the SARFAESI Act without following the procedure contemplated by the notification issued by the Ministry of Micro, Small and Medium Enterprises May 29, 2015, in the exercise of the powers conferred by Section 9 of the MSMED Act, cannot be sustained in law.
The Single Bench of Justice Gopinath P. said, “I am prima facie of the opinion that the recording of proceedings of this Court and circulating it in the manner indicated above constitute contempt of court as it amounts to interference with the administration of justice and lowers the dignity of this Court especially when the Rules of this Court prohibit recording of the proceedings of this Court.”
Advocate Maria Nedumpara represented the Petitioners, while Advocate C.K. Karunakaran represented the Respondents.
Factual Background
The first petitioner, a proprietary concern, described as 'M/s. M.D. Esthappan and the second petitioner stated to be the sole proprietor of the first petitioner had availed credit facilities from the Dhanlaxmi Bank Ltd. (Bank). On default being committed, proceedings were initiated against them under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).
The Writ Petitions before the High Court were filed seeking various reliefs principally on the contention that the borrowers are ‘Micro, Small or Medium Enterprises’ (MSME) as the term is understood under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) and the proceedings initiated by the respondent Bank under the SARFAESI Act cannot be sustained in law.
Arguments
It was submitted that when a unit is registered as MSME, it is required that the loan account shall be referred to a committee known as the Committee for Stressed Micro, Small and Medium Enterprises for implementation of a corrective action plan which may include rectification and restructuring and only when rectification or restructuring is not possible, can the Bank proceed for recovery.
On the aspect of recording of the Court proceedings, the Counsel for the Petitioner, Advocate Nedumpara, submitted that it is his right to record the proceedings of this Court and circulate it in any manner that he deems fit.
Reasoning
The Bench noted that the petitioners/borrowers did not appear to have raised any claim for the benefit of the MSME Notification framework and Udyog Aadhaar Registration Certificate guidelines issued by the RBI at any earlier stage before this Court. It was also noticed that the Bank had informed the petitioners that their accounts are in SMA category and called upon them to submit proposals. However, no proposals were submitted by the petitioners. The Bench mentioned that when the petitioners received e-mails issued by the bank, they should have sought a reference to the committee
As per the Bench, the Notification had been issued in the exercise of the power conferred by Section 9 of the MSMED Act. The High concurred with its view in Abdul Nazer v. Union Bank of India (2023), wherein it has been held that only an optional framework is available to the bank and the borrower under the MSME Act. The said framework in the notification cannot prevail over the statutory provisions of the SARFAESI Act in the matter of recovery of loans.
Reference was also made to the guidelines issued by the RBI, which says that the restructuring of loan accounts with exposure of above Rs.25 crore will continue to be governed by the extant guidelines on Corporate Debt Restructuring (CDR) / Joint Lender’s Forum (JLF) mechanism. Noting that the liability in the loan account in the present case was over Rs.25 crore, the Bench held that the petitioners were not entitled to the benefit of the guidelines or the Notification framework. Thus, the Petitions were dismissed by the Bench.
While concluding the matter, the Bench noticed that the proceedings of the Court in these cases have been recorded and circulated in various WhatsApp groups, including WhatsApp groups of borrowers, law officers of various banks, etc.
“The ‘Electronic Video Linkage Rules for Courts (Kerala), 2021’, as also the ‘Standard Operating Procedure (SOP) - Attending of Court Proceedings through Video Conferencing before the High Court of Kerala’ expressly prohibit the recording of the proceedings of the Court in any manner and therefore the fact that the Lawyers are permitted to enter the proceedings through video conferencing does not mean that the proceedings can be recorded and circulated”, the Bench asserted.
Stating that the recording of proceedings of this Court and circulating it in the manner indicated above constitute contempt of court, the Bench ordered, “Therefore, I direct the Registry to place this judgment before Hon’ble the Chief Justice to consider whether this issue should be taken up on the judicial side by a Bench to be nominated by Hon’ble the Chief Justice.”
Cause Title: M/s. M.D. Esthappan v. Reserve Bank of India & Ors. (Neutral Citation: 2025:KER:20437)
Appearance:
Petitioners: Advocates Mathews J. Nedumpara, Maria Nedumpara, Shameem Fayiz V.P.
Respondents: Advocates C.K. Karunakaran, S. Mohammed Al Rafi, Abel Tom Benny, Shifna Muhammed Shukkur, Lekshmi P. Nair, Krishna Suresh, K.V. Krishnakumar, Mekha Manoj, D. Prem Kamath, Tom Thomas (Kakkuzhiyil)
