Exhaustion of alternative remedies under the SARFAESI Act before approaching the High Court, and the limitations of High Court's jurisdiction in interfering with the SARFAESI Act.

M. Govindaraj, J.

1. Challenging the action of State Bank of India, Stressed Assets Management Branch, Egmore, Chennai, the second respondent in classifying the petitioner's loan account as Non Performing Asset, M/s.Hotel Milestonnez India Private Ltd., Kancheepuram District, the writ petitioner has preferred the present writ petition viz., W.P.No.43037 of 2016, for declaring the same as invalid, void ab initio and nullity in law.

2. Case of the writ petitioner is that they are running Restaurants and Canteens, in private Hospitals in the peripheral area of Chennai City and catering to the needs of poor and downtrodden. Managing Director, has purchased land at Santhavelur Village, Near Sunguvarchatram, for the purpose of putting up Hotel industry. Initially, Tamil Nadu Mercantile Bank Limited sanctioned a sum of Rs.6 Crores as Term Loan for the Hotel business. But the officials of the second respondent Bank has made promises and allured the Managing Director with an increase in term loan of Rs.10 Crores and Rs.1 Crore, as cash credit facility. Managing Director, Rajamanickam, has mortgaged the immovable properties owned by him and his son on 27.01.2011 and the second respondent also secured the property documents of the Managing Director and his family members towards collateral security. The value of the immovable property situated within the City jurisdiction is about Rs.50 Crores. The family members of the Managing Director have joined as Directors in the hotel industry.

3. Writ petitioner was paying equated monthly instalments promptly and in the process, State Bank of India, Stressed Assets Management Branch, Egmore, Chennai, second respondent, has paid money, on behalf of the Managing Director, to the Tamil Nadu Mercantile Bank Limited, without his knowledge. On 15.05.2012, credit facilities were renewed by the second respondent, under information to the petitioner. From 01.04.2011 to 31.03.2012, the writ petitioner has repaid a sum of Rs.1,17,00,000/-. The said payment was in excess of the dues. Thereafter, on 17.06.2013, the second respondent has sanctioned a sum of Rs.5,25,00,000/- as corporate loan. Thereafter, the writ petitioner has also paid a sum of Rs.1,32,00,000/- between 15.05.2012 and 17.06.2013. Thus, the petitioner has repaid in excess of Rs.2,75,00,000/-. But to the shock and surprise of the petitioner, on 29.06.2013, the second respondent Bank has classified the account of the petitioner as "Non Performing Asset". Such classification is not in accordance with the Reserve Bank of India guidelines, namely the Securitisation Companies and Reconstruction Companies (Reserve Bank) Guidelines and Directions, 2003.

4. According to the writ petitioner, as per Section 3(vi) of the said guidelines, "Non Performing Asset" (NPA) means an asset in respect of which (a) interest and principal (or) instalments thereof) is overdue for a period of 180 days or more from the date of acquisition or the due date as per the contract between the borrower and originator and so on. Later, the Reserve Bank of India has reduced the period from 180 days to 90 days. The petitioner has paid the instalments in time. But, at the behest of competitors in the business, the second respondent has purposely declared the petitioner's account as "Non Performing Asset". The second respondent Bank is not entitled to declare the account as "Non Performing Asset", as it was done within a period of 12 days from the date of sanctioning of corporate loan. The second respondent Bank, without following the Reserve Bank of India guidelines, has issued notice under Section 13(2) of the SARFAESI Act, followed by Section 13(4) as well as Rule 8(6) of the Security Interest (Enforcement) Rules, 2002.

5. Earlier, the writ petitioner has challenged the action of the second respondent by filing a writ petition in W.P.No.30573 of 2016 for a declaration declaring Rule 8(5) and Rule 3 of Security Interest (Enforcement) Rules as unconstitutional. In spite of this C