Sec 80 CPC & order 7 rule 11 CPC

 Supreme Court in a decision title Govt of Kerala v Sudhir kumar sharma case number civil appeal nimber 7364 of 2013 decided by division bench on dt 02/09/2013  interpreted the priority & applicability of provision of 80 CPC & order 7 rule 11 CPC  and upheld that application under sec 80 (2) CPC  without any order can’t be presumed as heard as in the case , the   suit was filed without complying provision of 80(1) CPC and cannot be said to filed justifiable 

The apex court perused the consequences if this irregularities continues and if  the application upon 80(2) cPC rejected then suit was to be returned and after then application under order 7 rule 11 CPC to be accepted 

Thus the rejection of application under order 7 rule 11 CPC by trial court without deciding application under sec 80(2) CPC  was against the procedure and irregularities continues , and trial court should decide first an application of sec 80(2) and thereafter application under order 7 rule 11 CPC to be heard and  Supreme Court quashed the order of high court which was confirming order of trial court with regard to rejection of application under order 7 rule 11 and appeal was accepted  by Supreme Court 

MSME Act , Restructuring and sarfacie proceedings

 Number of writs t filed before Bombay high court against financial institutions including NBFC , as the benifit of restructuring NPA defaulting unit was not given and  Sarfaesi    proceedings started 

Number  of  appeal raised the similar question in SLP filed against the order of Bombay high court when order of Bombay high court was against the borrower  and it was held by Bombay high court that bank is not obliged to have a process of sec 9 of MSMED ACT & RBI Notifications issued under sec 21 & 35A

In the judgement case title   M/s Pro knits v/s directors of canara bank  & others       Appeal number SLP  7898/2024 decided on 1:/8/2024 by division bench   It was held that  after NPA of account MSME  borrower may  apply for restructuring of account  but this benefit would not run when sarfaesi proceedings started 

Thus the delaying tactics do not help to borrower when after   Declaration  of NPA of the account  , surfciec proceedings began 

As per MSME act : it is mandatory to classify stress account in three sub categories to resolve it , MSMED Act 2006 and Notification of RBI 2015 and  2016 was matter in issue but banks not followed the mandatory provision and declared  accounts NPA 

It was argued by appellant that non compliance of mandatory provision of MSMED Act and notification of 2015 & 2016 rendered the surfacei proceedings illegal & void ab initio 

It was also argued by Banks that provisions of Sarfaesi    act are not override by the MSMED act 

In essence SLP allowed and held

That provisions of MSMED and RBI notifications has statutory force under sec 9 of MSMED Act & notifications issued under Sec 35 A& 21 of RBI act 

The provisions are mandatory

There is no applicability of MSMED Act 2006 & RBI circular 2015 & 2016 upon regional rural banks 

It