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CALCUTTA HIGH COURT
Krishna Rao, J
Bizitza Retail Ventures Private Limited – Appellant
Versus
Central Bank of India – Respondent
| Table of Content |
|---|
| 1. framework for loan management for msmes. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8) |
| 2. parties' arguments on framework application. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16) |
| 3. court's analysis on procedural adherence. (Para 17 , 20 , 21 , 22 , 23 , 24) |
| 4. obligations of banks and borrowers under framework. (Para 18 , 19 , 25) |
| 5. writ application disposition ordered. (Para 26) |
JUDGMENT :
Krishna Rao, J.
1. The petitioners have filed the present writ application praying for a Mandamus upon the respondent nos. 1, 2 and 3 to act in terms of the Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises dated 29th May, 2015 and 17th March, 2016 and the Master Direction for Lending to Micro, Small and Medium Enterprises Sector dated 21st July, 2016.
2. The petitioner no.1 is a registered Micro Enterprises, having Registration No. UDYAM-WB-10-0023419. The petitioner no. 1 has availed Cash Credit Facilities of Rs. 4,95,00,000/- from the respondent no.1 bank. The petitioner nos. 4 and 5 are guarantors of the petitioner no.1 of the said Cash Credit Facilities.
3. By a notice dated 24th June, 2025, the respondent no.1 has informed the petitioner no.1 that the cash
Banks must adhere to the Framework for Revival and Rehabilitation of MSMEs before classifying accounts as non-performing assets, obligating both banks and MSMEs to fulfill their respective duties.
The court ruled that the borrower’s failure to timely assert its MSME status and follow regulatory guidelines allowed the bank to declare the loan account as NPA and pursue recovery without further o....
Instructions/Directions issued by Central Government under Section 9 of MSMED Act and by RBI under Sections 21 and 35A of Banking Regulation Act, 1949 have statutory force and are binding to all Bank....
Banks must follow MSME Notification procedures to identify stress in accounts before classifying them as NPAs. Failure to do so legitimizes subsequent enforcement measures under the SARFAESI Act.
Borrowers classified as MSMEs must assert their status before NPA classification to invoke benefits under the SARFAESI Act; failure to do so precludes subsequent claims.
Borrowers classified as MSMEs must assert their status before NPA classification to invoke benefits under the SARFAESI Act; failure to do so precludes subsequent claims.
The classification of accounts as Non-Performing Assets (NPA) under the SARFAESI Act is valid if MSMEs do not timely assert their status, failing to invoke protections under the MSMED Act's revival f....
MSMEs must assert their status timely to avail benefits under relevant frameworks; failing to notify the bank before NPA classification precludes belated claims.
Petitioners did not establish MSME status prior to loan classification as NPA; statutory remedies under SARFAESI Act must be availed instead of writ jurisdiction.
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