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LISA GILL, AMARJOT BHATTI
Gagandeep Singh – Appellant
Versus
Reserve Bank of India – Respondent
JUDGMENT
Mrs. Lisa Gill, J.
Prayer in this writ petition is for setting aside notice dated 01.04.2017 (Annexure P-l), notice dated 05.07.2018 (Annexure P-6) and notices dated 04.01.2019, 28.02.2019 and 01.03.2019 (Annexures P-8 to P-10) issued under the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short SARFAESI Act) and further setting aside communication dated 13.06.2019 (Annexure P-16), issued by respondent no.2 vide which respondent-Bank has refused to upgrade home loan account of petitioner. There is a further prayer for setting aside Clause 4.2.7(i) of the Master Circular - "Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances" alleged to be illegal, unconstitutional and violative of Articles 14 and 16 of the Constitution of India and in the alternate to declare that this provision is not applicable to the facts and circumstances of the present case. Petitioner seeks a direction to respondent no.2, Punjab National Bank, to upgrade home loan account of petitioner to standard in terms of Clause 4.2.5 of the above said Master Circular.
2. Brief facts as pleade
The classification of loan accounts as non-performing assets must be borrower-wise, not facility-wise, and a guarantor cannot evade liability due to another borrower's defaults.
The classification of loan accounts as borrower-wise under the SARFAESI Act is upheld, emphasizing that a guarantor cannot evade liability due to another borrower's NPA status.
The central legal point established in the judgment is that the conditions outlined in the Master Circular must be met for the upgradation of NPA loan accounts, and failure to fulfill these condition....
The court's discretionary jurisdiction under Article 226 is not absolute and should be exercised judiciously.
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....
Banks are under a statutory obligation to comply with the RBI's Resolution Framework (R.F) 2.0 and consider applications for restructuring of MSME loans in accordance with its provisions.
Classification of an account as NPA under SARFAESI Act is not subject to judicial review and requires the borrower to seek recourse through statutory appeal under Section 17.
Point of law: If a particular case falls in the exceptions carved out and there are no disputed questions of facts arising for consideration, it is not necessary to relegate the parties to avail the ....
The classification of a borrower's account as NPA under the SARFAESI Act is not justiciable in writ jurisdiction until measures under section 13(4) are invoked, necessitating the exhaustion of statut....
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