Point of Law: By virtue of Section 17 of SARFAESI Act, Tribunal is clothed with a wide range of powers to interfere with any illegality.

JUDGMENT :

The petitioner challenges the proceedings initiated under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘the SARFAESI Act’) in this writ petition.

2. The facts leading to the institution of the writ petition are briefly narrated below:

The petitioner is the proprietor of M/s.Evercool Enterprises, Manjeri. The petitioner availed a credit facility from the first respondent Bank. The proprietorship enterprises of the petitioner obtained registration under the relevant provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (‘the MSMED Act’). The petitioner committed default in repaying the loan availed from the respondent Bank. The Bank proceeded under the provisions of the SARFAESI Act. The petitioner’s loan account was classified as Non-Performing Asset (NPA) on 28.02.2021. The Bank issued notice under Section 13(2) of the SARFAESI Act on 29.04.2021, possession notice on 29.12.2021 and sale notice on 01.09.2023. The Bank filed C.M.P.No.2941/2022 before the Chief Judicial Magistrate’s Court, Manjeri, which appointed an Advocate Commissioner to take the physical possession of the mortgaged property. The petitioner applied to the Bank on 18.09.2023 for the constitution of a Committee as provided under the MSMED Act and to seek the restructuring of the loan. The Bank, without considering the request submitted by the petitioner, proceeded under the provisions of the SARFAESI Act.

3. The petitioner has filed the writ petition seeking the following reliefs:

“(a) declare that the Petitioner is an MSME within the meaning of the MSMED Act of 2006 and Ext.P2/notification issued by the Central Government under Section 9 thereof, as also the circulars and guidelines issued by the Reserve Bank of India under Section 10 thereof, which provides for a mechanism of resolution of stress and that no proceedings for recovery under the SARFAESI Act, RDB Act or the IBC will lie, in as much as the MSMED Act being a special law qua the aforesaid Acts, and a later law in relation to the RDB Act and the SARFAESI Act, its provisions will prevail over the aforesaid enactments;

(b) declare that the MSME Act in so far as it has not created a special forum/tribunals to enforce the inter-se rights and obligations/remedies, which it has created in addition to those rights/obligations/ remedies recognized by the common law, the jurisdiction of the Civil Court is not ousted, for it is impossible to oust the jurisdiction of the Civil Court without providing for an alternative forum/tribunal to adjudicate the inter se disputes between parties who are governed by the Act;

(c) to declare that the entire proceedings at the hands of the Respondent no. 3, Authorised Officer of the Union Bank of India under Section 13(2), 13(4) and 14 of the SARFAESI and the Security Interest (Enforcement) Rules are illegal and void and to grant a consequential writ in the nature of certiorari or any other appropriate writ or order quashing and setting aside the same;

(d) to issue a writ in the nature of mandamus, nay, certiorarified mandamus or any other appropriate writ or order directing Respondent no. 1, Board of directors of the Union Bank of India to constitute a committee for the resolution of the stress of the unit of the instant Petitioner, an MSME as contemplated in paragraph 2 of the notification dated 29.5.2015 issued under the MSMED Act, and further to direct the Committee to resolve the stress in accordance with the said notification and such other relevant notifications/regulations framed by the RBI;

(e) in furtherance to prayer (d) above, to issue a writ in the nature of prohibition restraining and prohibiting the Respondent Bank from initiating or continuing any measures for recovery under any other law and in particular, the SARFAESI Act and the rules made thereunder, and the Recovery of Debts and Bankruptcy Act;

(f) declare that the Petitioner is entitled to be compensat