Mr. S.J. Vazifdar, ACJ.:- The petitioner seeks a writ of certiorari to quash a demand notice dated 04.04.2014 issued by respondent No.2-Kotak Mahindra Bank Limited under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and the reply submitted by respondent No.2 under Section 13(3A) of the Act pursuant to the orders of this Court in CWP No.10957 of 2014. The writs are sought on the ground that the impugned orders are without jurisdiction. Respondent No.3 is the Chief Manager of respondent No.2.

The petitioner has also sought a writ of mandamus directing the respondents to upgrade its loan account i.e. Export Packing Credit (EPC) to a standard loan account from the Non Performing Asset(NPA) category. This writ is sought on the basis of a Master Circular issued by respondent No.1-Reserve Bank of India.

2. We would normally have relegated the petitioner to the alternate remedy of filing an appeal under Section 17 of the SARFAESI Act. However, Mr. Jagga, the learned counsel appearing on behalf of the petitioner restricted his submissions in this case to a purely jurisdictional issue. We are inclined to entertain the writ petition on that issue alone. We have decided the issue against the petitioner. As far as the merits are concerned, the petition is disposed of with liberty to the petitioner to avail the alternate remedy.

3. In November, 2007, respondent No.2 acquired the debts of an aggregate amount of over Rs.53 crores of the petitioner from six lenders. The petitioner requested respondent No.2 to reschedule the payment. Respondent No.2 acceded to the request as per the terms and conditions contained in a Letter of Acceptance (LOA) dated 26.12.2007. The petitioner accepted the same. The essential terms of the LOA included interest @ 17.5% per annum, a repayment period of 38 months, penal interest @ 3% per annum and Rs.10 crores as penalty in case of default. According to respondent No.2, the petitioner repaid only an amount of Rs.5.35 crores in the following two years.

The petitioner requested the repayment to be further rescheduled on account of certain difficulties faced by it. In September, 2009, respondent No.2 issued a revised LOA, which was accepted by the petitioner. In the revised LOA, the petitioner accepted its debt of Rs.47.28 crores which included principal outstanding, default penalty of Rs.10 crores and outstanding interest. The payments were to be made quarterly from December, 2009 to March, 2013 as per the schedule annexed with interest at 17 per cent per annum. Penal interest @ 3% per annum compounded quarterly and other charges were payable. The residential property of the promoters was mortgaged as security for repayment of the dues.

The petitioner accepted the revised LOA dated 30.09.2009. The parties acted upon the terms of the revised LOA. This, therefore, constituted one facility which we will for convenience refer to as the first facility or account.

4. Thereafter, respondent No.2 itself sanctioned a revolving Export Packing Credit Facility (EPC Facility) in favour of the petitioner of an amount of Rs.5 crores. The petitioner admittedly failed to adhere to the terms and conditions thereof. As a result, on 17.12.2013, respondent No.2 classified the petitioner’s account as an NPA. Respondent No.2 contends that the classification was borrower-wise and not facility-wise.

5. Mr. Jagga, the learned counsel appearing on behalf of the petitioner, relied upon paragraph-10 of an affidavit-in-reply filed by respondent No.2 in an earlier writ petition filed by the petitioner being CWP No.10957 of 2014 to contend that the first facility is not an NPA. Paragraph-10 reads as under:-

“10. I further say that as per the RBI guidelines for income recognition for NPA buy-outs, no income can be booked in case of NPA buyouts unless 100% principal is recovered. As mentioned above, the Petitioner made payment of the 100% principal to