Timely assertion of MSME status is essential to invoke protections against loan enforcement actions; delays may bar legal recourse.

JUDGMENT :

DHARMESH SHARMA, J.

CM APPL. 54730/2024 - (EXMP)

1. Allowed, subject to all just exceptions.

2. The application stands disposed of.

CM APPL. 54731/2024

3. This application has been moved on behalf of the petitioners seeking permission to file lengthy list of dates and synopsis.

4. For the reasons stated in the application, the application is allowed.

5. The application stands disposed of.

W.P. (C) 13094/2024 & CM APPL. 54729/2024

6. The petitioner No.1 is a partnership firm, which along with its partners, who are arraigned as petitioners No. 2 to 4, hereinafter referred to as the petitioners, invoke the writ jurisdiction of this Court under Article 226 of the Constitution of India, 1950 for directions to the respondents not to curtail the fundamental rights of the petitioners under Articles 19(1)(g), 21 and 300A of the Constitution of India.

7. Learned counsel for the respondents No.1 and 2/Indian Bank as well as learned counsel for respondent No.5 are present on advance notice.

8. It is the case of the petitioners that it is registered as an MSME [Micro, Small and Medium Enterprises]. Shorn of unnecessary details, the petitioners availed a loan facility from the respondent No.2/Indian Bank but was unable to make repayment of the said loan amount, consequent to which, proceedings have been initiated by the Secured Creditor i.e. the respondent No.1/Indian bank under SARFAESI Act [The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002] so as to seek possession of the property mortgaged with the latter.

9. It is claimed by the petitioners that they challenged the action initiated by the respondents No.1 and 2/Indian Bank before the DRT-II [Debt Recovery Tribunal] Delhi, which application was withdrawn on 25.07.2024 with liberty to file afresh as and when need arises, based upon assurance by the respondent no.1/Indian Bank that they will release the property documents for sale for which the petitioners have arranged a buyer.

10. Mr. Saurabh Kripal, learned Senior Advocate for the petitioners has heavily relied upon decision by the Supreme Court in the case of Pro Knits v. Board of Directors of Canara Bank , 2024 SCC OnLine SC 1864 wherein the Supreme Court explained the very object and purpose of the MSMED Act [Micro, Small and Medium Enterprises Development Act, 2006] which is to provide for facilitating the promotion, development and enhancing the competitiveness of Micro, Small and Medium Enterprises; and it was held that the notification dated 29.05.2015 issued under Section 9 of the MSMED Act was mandatory and binding on all the scheduled banks.

11. The grievance of the petitioners is that despite making several requests and lastly vide letter dated 05.09.2024 for complying with the directions of the Supreme Court in the aforesaid case, the respondents vide letter dated 11.09.2024 have refused to adhere to the MSME guidelines and that of the Apex Court in the aforesaid referred matter.

12. Per contra, learned counsel for the respondents No.1 and 2/Indian Bank has pointed out that consequent to the loan account of the petitioners becoming NPA [Non Performing Asset], learned Chief Metropolitan Magistrate (Central), Tis Hazari Courts, Delhi vide order dated 02.06.2023 in MA No. 142/2023 in proceedings initiated by the respondents No.1 and 2/Indian Bank under Section 14 of the of the SARFAESI Act, directed taking over the possession of the assets mortgaged i.e. Plot No. 7, admeasuring 270.02 Sq. Meters, D.B. Gupta Road, Paharganj, New Delhi and the SA [Securitisation Application] moved by the petitioners under Section 17(1)