Advocates Appeared:
For the Appellants : Mohan Jacob George, P.V. Parvathy, Reena Thomas, Nigi George, Ananthu V. Lal, Sherin Varghese, Brahma R.K.
For the Respondents: Nisha George, T.C. Krishna, George Poonthottam

Based on the provided legal document, the key points are as follows:

1. The case involves an appeal by The South Indian Bank challenging a judgment that partly allowed a writ petition filed by M/s. PDMC Industries and related entities, concerning the classification of their loan accounts as NPAs. The court found that the bank failed to comply with mandatory procedures stipulated under MSME guidelines before declaring the accounts as NPAs, rendering the classification illegal (!) (!) .

2. The court emphasized that banks must identify incipient stress in MSME accounts and classify them under specific categories before declaring them NPAs, in accordance with prescribed guidelines. Failure to do so breaches legal requirements and invalidates subsequent recovery actions (!) (!) .

3. The court held that judicial intervention under Article 226 is only permissible where there are no effective alternative remedies available. Since the challenge is to the legality of the NPA classification itself, which is a preliminary act with serious civil consequences, the remedy lies in judicial review, not in proceedings under the SARFAESI Act (!) (!) .

4. The court found that the bank did not follow the mandatory procedures under the MSME notification before classifying the accounts as NPAs, which invalidates the classification. The bank's internal processes lacked proper consideration and communication, especially with regard to the mandatory committee’s review as prescribed in the guidelines (!) (!) .

5. The court dismissed the bank’s argument that the writ petition was barred by res judicata, noting that the petitioners had left their contentions open in previous proceedings and that the current challenge pertains to the initial illegal classification, which was not previously adjudicated (!) .

6. The court observed that the classification of accounts as NPAs is a preliminary step that can be challenged through writ proceedings if procedural violations are alleged. However, once the classification is deemed illegal, the proper remedy is to approach the Debts Recovery Tribunal under the provisions of the SARFAESI Act, specifically Section 17, rather than continuing with writ petitions (!) (!) .

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