By the Court.—Against the possession notice dated 2.3.2015 issued under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the Act), the petitioner has filed the present writ petition.

2. The petitioner contends that he had taken a loan and committed a default as a result of which a notice under Section 13(2) was issued to which the petitioner responded and paid the defaulted amount in spite of which the respondent bank has issued the notice under Section 13(4) of the Act. Sri S.Tiwari, learned counsel for the respondent bank was directed to receive instructions who has informed that as on date there is no defaulted amount to be paid by the petitioner and that the entire defaulted amount has already been cleared by the petitioner. Section 13(2) of the Act provides that if a borrower makes a default in the repayment of the secured debt, the secured creditor can classified the debt of the borrower as a non performing asset. The secured creditor may require the borrower by notice in writing to discharge in full his liabilities. Non performing asset has been defined under Section 2(o). For facility the same has extracted hereunder:

“2(o) “non-performing asset” means an asset or account of a borrower, which has been classified by a bank or financial institution as sub-standard, [doubtful or loss asset,—

(a) in case such bank or financial institution is administered or regulated by any authority or body established, constituted or appointed by any law for the time being in force, in accordance with the directions or guidelines relating to assets classifications issued by such authority or body;

(b) in any other case, in accordance with the directions or guidelines relating to assets classifications issued by the Reserve Bank;”

3. From a perusal of the aforesaid, it is clear that the non performing asset is required to be declared in accordance with the directions or guidelines relating to assets classification issued by the Reserve Bank. The Reserve Bank of India has issued a master circular known as “Master Circular-Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances”, which was revised on 1.7.2014.

4. The RBI guidelines has categorised the NPAs in para 4 as “Substandard Assets”, “Doubtful Assets” and “Loss Assets”. The petitioners’ case falls under “Substandard Assets”, which is indicated in para 4.1.1, which is extracted hereunder:

“4.1.1 Substandard Assets

With effect from March 31,2005, a substandard asset would be one, which has remained NPA for a period less than or equal to 12 months. Such an asset will have well defined credit weaknesses that jeopardies the liquidation of the debt and are characterised by the distinct possibility that the banks will sustain some loss, if deficiencies are not corrected.”

5. Paragraph 4.2 provides guidelines for classification of assets. Classification of assets into above categories should be done after taking into account the degree of well-defined credit weaknesses and the extent of dependence on collateral security for realisation of dues.

6. Paragraph 4.2.4 provides for accounts with temporary deficiencies as under:

“The classification of an asset as NPA should be based on the record of recovery. Bank should not classify an advance account as NPA merely due to the existence of some deficiencies which are temporary in nature such as non-availability of adequate drawing power based on the latest available stock statement, balance outstanding exceeding the limit temporarily, non-s ubmission of stock statements and non-renewal of the limits on the due date, etc.”

7. Paragraph 4.2.5 provides for upgradation of loan accounts classified as NPAs, which is extracted hereunder:

“If arrears of interest and principal are paid by the borrower in the case of loan accounts classified as NPAs, the account should no longer be treated as non-performing