Back
HIGH COURT OF RAJASTHAN (JODHPUR BENCH)
MR. JUSTICE VINIT KUMAR MATHUR, J
Shree Khatri Namkeen – Appellant
Versus
Reserve Bank of India – Respondent
Order :
1. Heard learned counsel for the parties on the application preferred under Article 226 (3) of the Constitution of India .
2. Learned counsel for the respondents submits that the petitioners have not applied in the category of ‘MSME’ while securing the loan from the respondent-Bank in the name of ‘Shree Khatri Namkeen’. He further submits that even the application and the affidavit, to the effect that the company of the petitioners is an ‘MSME’, have not been filed before the respondent-Bank, therefore, the respondent-Bank was not under obligation to comply with the provisions enshrined in the notification dated 29.05.2015 for identification of the incipient stress. He therefore, prays that the interim order granted by this Court on 04.02.2025 may be vacated.
3. Per contra, learned counsel for the petitioners submits that from the inception, the petitioners’ company was an MSME and they have approached the respondent-Bank for the grant of loan in its name. He further submits that even the notice issued by the respondents under Section 13 (2) of the SARFAESI Act refers the petitioners’ company as ‘MSME’ and, therefore, there was no reason for the respondents not to identify the
A bank must comply with notification provisions for MSME identification before declaring a loan as NPA.
The court upheld the shared responsibility of MSMEs and lenders in identifying loan stress, clarifying the application of the Framework for Revival and Rehabilitation of MSMEs.
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.
Timely assertion of MSME status is essential to invoke protections against loan enforcement actions; delays may bar legal recourse.
The jurisdiction of a writ petition must align with the location where the cause of action arises, not merely the respondent's address.
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....
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....
MSMEs must timely assert their status to benefit from statutory protections under the SARFAESI Act; failure to do so precludes them from raising claims at a later stage.
Banks must follow statutory frameworks for classifying MSME loans as NPAs, ensuring adherence to regulations before taking coercive actions.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
