ORDER :

P.Naveen Rao, J.

Heard Sri P. Pratap, learned counsel for the petitioners.

2. 1st petitioner - M/s.Navneeta Steels Private Limited obtained cash credit from the 2nd respondent-bank. Holding that petitioners defaulted in repayment of the loan, the 2nd respondent classified the loan account of the petitioners as Non-Performing Asset and has taken recourse to the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act’) to recover the loan amount. In the process, 2nd respondent filed an application under Section 14 of the SARFAESI Act before the 3rd respondent-Collector & District Magistrate, Hyderabad District to take physical possession of the secured assets. On 03.09.2022 the District Magistrate passed orders directing the Tahasildar, Shaikpet Mandal to assist the Assistant General Manager and Authorised Officer of the respondent bank in taking over physical possession of the property and for conducting Panchanama. Challenging the same, this writ petition is filed.

3. The learned counsel for the petitioners submits that classification of the loan account of the petitioners’ as NPA is clearly erroneous and contrary to the guidelines and circulars issued by the Reserve Bank of India.

4. Per contra, the learned counsel representing the 2nd respondent bank submits that the directions of this Court were complied. He further submitted that if the petitioners have grievance against the 2nd respondent in taking recourse to the provisions of the SARFAESI Act, they have to avail the remedy provided under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal. But without availing the said remedy, this writ petition is filed.

5. When the remedy provided by Section 17 of the SARFAESI Act is an effective and efficacious remedy, this Court do not entertain the writ petition and relegates the petitioner to avail the said remedy.

6. On classification of loan account as NPA and taking recourse to SARFAESI Act was considered by this Court in W.P.No.35063 of 2022 to which both of us are members of the Division Bench. Relevant paragraphs of the judgment dated 12.10.2022 read as under:

“12. From the discussion on relevant statutory provisions and opinion expressed by Hon’ble Supreme Court in Mardia Chemicals and Transcore, it is clear as crystal that once a loan account becomes substandard, doubtful or loss asset, in the book of a bank/financial institution it is classified as NPA. The RBI Guidelines clearly specify when a loan account reaches that stage to be classified as NPA. The steps taken leading to classifying a loan account as NPA is an internal matter within the bank/financial institution. The Bank/financial institution notifies the same in Section 13 (2) of the Act, 2002 notice and calls upon the borrower to clear the loan within sixty days. At that stage, it is open to borrower to respond and place before the bank/ financial institution his point of view. He can also oppose declaring his account as NPA. He can rely on RBI Guidelines on various aspects. The Bank/Financial institution is required to consider the objections objectively and to take a decision. It is also required to communicate the decision to the borrower.

13. As analyzed by Hon’ble Supreme Court in Mardia Chemicals and Transcore there is a statutorily prescribed restraint in taking legal course by a borrower before Section 13(4) of the Act, 2002 stage. Statute prescribed this course having regard to accumulation of debts to banks stifling the banking/financial sector. It is in public interest to fast track the recovery of dues by banks/financial institutions. Thus, in Mardia Chemicals Hon’ble Supreme Court held that scheme of SARFAESI Act, 2002 does not envisage any remedy till Section 13(4) stage is reached. It has gone to the extent of saying that borrower has no right of hearing at the stage of Section 13(2) and he can only file objections under Section 13(3-A) of the