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LISA GILL, AMARJOT BHATTI
Ess Ell Embroidery – Appellant
Versus
Bank of India – Respondent
JUDGMENT
Mrs. Lisa Gill, J. (Oral)
Prayer in this writ petition is for setting aside rejection of objections filed by petitioners under Section 13(3A) of Securitization and Reconstruction of Financial Asset Assets and Enforcement of Security Interest Act, 2002 (for short SARFAESI Act), vide Communication dated 10.02.2024, Annexure P-II. There is a further prayer for directing respondents no.1 and 2 to pass a speaking order besides quashing notice dated 06.12.2023, Annexure P-9, under Section 13(2) of SARFAESI Act.
2. It is submitted that petitioner no.1 is a partnership firm with petitioner no.2 being its managing partner. Petitioner-firm is claimed to be registered as MSME unit under The Micro, Small and Medium Enterprises Development Act, 2006. Cash credit facility to the tune of Rs. 90,00,000/- was availed of by the petitioners, date of which is not specifically mentioned. It is stated that due to outbreak of Pandemic COVID-19, business of petitioners was affected. Emergency Credit Line Guarantee Scheme (ECGLS) was availed of and further credit of Rs. 67,00,000/- was availed of. However, petitioners account was declared Non Performing Asset (NPA) on 12.09.2023, allegedly in blata
The SARFAESI Act prevails over the MSME Act, and the classification of accounts as NPA is not justiciable at the stage of objection rejection under Section 13(3A).
The High Court should not exercise jurisdiction under Article 226 in matters governed by the SARFAESI Act where effective remedies exist, and classification of accounts as NPAs is not subject to judi....
The court upheld that simultaneous proceedings under the SARFAESI Act and the Recovery of Debts and Bankruptcy Act are permissible, and reiterated principles of res judicata and the responsibilities ....
The classification of accounts as Non-Performing Assets (NPA) under the SARFAESI Act is valid if MSMEs do not timely assert their status, failing to invoke protections under the MSMED Act's revival f....
The jurisdiction of a writ petition must align with the location where the cause of action arises, not merely the respondent's address.
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.
A registered MSME must disclose its status before NPA classification to invoke protections under relevant frameworks; failure to do so precludes later challenges to recovery actions.
Debt Recovery and monetary Laws - Defaulted in payment of instalments in respect of the overdraft facility - Section 13(2) of SARFAESI Act and measures taken under Section 13(4) thereof were only nec....
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