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SATISH CHANDRA SHARMA, SUBRAMONIUM PRASAD
Satpal Singh Kohli – Appellant
Versus
Canara Bank – Respondent
JUDGMENT
Satish Chandra Sharma, C.J. (Oral)
CM APPL. 16120/2023
1. Exemption allowed, subject to all just exceptions.
2. The application stands disposed of.
LPA 225/2023 & CM APPL. 16119/2023
3. The present Letters Patent Appeal (LPA) is arising out of judgment dated 22.02.2023 delivered by learned Single Judge of this Court in W.P.(C.) No. 13530/2022 titled Satpal Singh Kohli & Another Vs. Canara Bank.
4. The facts of the case reveal that the Appellants have availed various loans/cash credit facilities from Respondent/Canara Bank since 2013. In total, six loan accounts were being operated with the Respondent Bank. Out of the six loan accounts, four were in respect of cash credit facilities, working capital. The remaining two housing loans were in the joint name of the Appellants.
5. It has been stated by the Appellants that on account of financial crisis from 01.04.2022, the accounts in respect of M/s Pal Enterprises became irregular, and finally, they were classified as Non-Performing Asset (NPA). The Appellants before this Court, being aggrieved by declaration of accounts as NPA and against the action of the bank under Section 13(2) of the Securitisation and Reconstruction of
Borrowers have remedies under Section 13(3A) and Section 17 of the SARFAESI Act, 2002 to challenge NPA classification and appeal actions taken by the bank.
The High Court should not adjudicate on the classification of NPA, and recovery proceedings should not be halted by exercising power under Article 226 of the Constitution of India.
The statutory scheme of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act, 2002) does not provide for a legal remedy until the Section 13(4....
The classification of loan accounts as NPAs and the subsequent actions taken by the bank are not justiciable at the writ stage, and the petitioners should avail the remedy under Section 17 of the SAR....
The classification of a borrower's account as NPA under the SARFAESI Act is not justiciable in writ jurisdiction until measures under section 13(4) are invoked, necessitating the exhaustion of statut....
The legislative intent to prevent judicial or quasi-judicial intervention at the stage of issuance of demand notice under Section 13(2) of the SARFAESI Act.
Classification of an account as NPA under SARFAESI Act is not subject to judicial review and requires the borrower to seek recourse through statutory appeal under Section 17.
Civil courts lack jurisdiction over matters already proceeding under SARFAESI Act, reaffirming that disputes on NPA classifications must be resolved within DRT as per Sections 17 and 34 of the Act.
The SARFAESI Act prevails over the MSME Act, and the classification of accounts as NPA is not justiciable at the stage of objection rejection under Section 13(3A).
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