Kerala High Court warns lawyer for recording court proceedings; moots contempt action

The Kerala High Court on Monday expressed serious concern about unauthorised recording and circulation of court proceedings and said that such actions could amount to contempt of court [MD Esthappan & anr v Reserve Bank of India & ors and connected cases]..Justice P Gopinath took strong exception to the fact that the proceedings in a case relating to Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) were recorded and circulated on WhatsApp groups, including those of borrowers and bank officials.When the petitioner's counsel Mathews J Nedumpara was confronted about this, he defended his actions stating that transparency in judicial proceedings was essential and that he had the right to record and circulate the proceedings.However, the Court rejected this argument citing the Electronic Video Linkage Rules for Courts (Kerala), 2021 and the Standard Operating Procedure (SOP) - Attending of Court Proceedings through Video Conferencing before the High Court of Kerala, which expressly prohibit such recordings.The Court made it clear that actions which interfere with court's administration of justice would result in the initiation of contempt proceedings."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," the Court said.It directed the registry to place the matter before the Chief Justice for further consideration, potentially for initiating contempt of court proceedings."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," the single-judge directed..The Court was hearing two writ petitions filed by borrowers challenging the recovery proceedings initiated by a bank under the SARFAESI Act.The petitioners, including a private limited company and a proprietary concern, had defaulted on loans availed from Dhanalaxmi Bank Ltd.They contended that as Micro, Small, and Medium Enterprises (MSMEs), they were entitled to the benefits of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), particularly the notification dated May 29, 2015, which mandates the formation of a Committee for Stressed MSMEs to implement corrective action plans, including restructuring, before recovery proceedings can commence.The petitioners argued that the bank’s failure to refer their cases to the Committee rendered the SARFAESI proceedings illegal..However, the Court rejected these arguments, relying on the Supreme Court’s judgment in Pro Knits v Canara Bank ((2024) 10 SCC 292) and a division bench ruling of the Kerala High Court in PK Krishnakumar v IndusInd Bank (2024 SCC OnLine Ker 6888).Both judgments emphasised that the framework for revival and rehabilitation of MSMEs must be invoked before an account is classified as a non-performing asset (NPA).In the present case, the petitioners had not raised their MSME status or sought restructuring until after their accounts were declared NPAs.The Court noted that the bank had even communicated to the petitioners that their accounts were in the Special Mention Account (SMA) category and requested a detailed action plan, but the petitioners failed to respond."It is not disputed before me that the claims presently raised have not been raised in any previous litigation and they have been raised for the first time only after the account was classified as 'NPA'. Therefore, in the light of the law laid down by the Supreme Court in Pro Knits (supra) and by the Division Bench of this Court in P.K. Krishnakumar (supra), the petitioners are not entitled to any relief," the Court stated.It reiterated that the SARFAESI Act, being a special statute, would prevail over the MSMED Act in matters of recovery, and the petitioners could not rely on the MSMED framework after their accounts had turned into NPAs.The Court also criticised the petitioners for filing multiple petitions across different forums including the Bombay High Court and the Debts Recovery Tribunal, without raising their MSME claims earlier. .The Court thus rejected the petitioner's contention that the Bank was obligated to refer their cases to the Committee and dismissed the petitions..Advocates Mathews J Nedumpara, Maria Nedumpara and Shameem Fayiz VP represented the petitioners.Advocate CK Karunakaran appeared for the bank..[Read Judgment]