IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 12729 of 2025 ==========================================================

M/S S M PATRAWALA THROUGH ITS SOLE PROPRIETOR SHEHZAD MINOCHER PATRAWALA & ANR.

Versus AUTHORISED OFFICER , BANK OF INDIA & ANR.

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Appearance:

MR JAL UNWALLA SENIOR ADVOCATE WITH MS AASHVI SHAH ADVOCATE WITH MR MASOOM K SHAH(6516) for the Petitioner(s) No. 1,2 ==========================================================

CORAM:HONOURABLE MR. JUSTICE NIRAL R. MEHTA Date : 26/09/2025

ORAL ORDER

[1] By way of this petition under Articles 226 and 227 of the Constitution of India, the petitioners have challenged the communication dated 14^th August 2025 and all other consequential actions arising under the provisions of Section 13(2) and 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, “the SARFAESI Act”).

[2] Heard learned Senior Advocate Mr. Jal Unwalla assisted by learned advocate Mr. Masoom K. Shah for the petitioners.

[3] Learned Senior Advocate Mr. Jal Unwalla for the petitioners, at the outset, submitted that while deciding the application by the Standing Committee on framework for revival and rehabilitation of the Micro, Small and Medium Enterprises (for short, “MSME Framework”), as per Clause 4(6) and Clause 4(8) of the Notification dated 29^th May 2015 issued by the Central Government, though it was the obligatory on the part of the Committee to notify the concerned enterprise i.e. the petitioners, there was no notice and / or intimation given to the petitioners to make its case good before the Committee. Learned Senior Advocate Mr. Unwalla further submitted that as per the communication dated 14^th August 2025, the Committee has recommended rectification, as a corrective action plan, in the petitioner’s account, however, the Bank, instead of undertaking rectification plan as per Clause 5(4)(i) of the SARFAESI Act, straightway initiated recovery proceedings by taking recourse of the provisions of the SARFAESI Act and that has contrary to the objects and purpose of the framework for revival and rehabilitation of the MSME.

[4] According to learned Senior Advocate Mr. Unwalla for the petitioners, the Hon’ble Apex Court, in the case of Shri Shri Swami Samarth Constructions & Finance Solution vs. Board of Directors of NKGSB Co. op. Bank Ltd. reported in 2025(0) AIJEL-SC 75652 : 2025(0) JX(SC) 985, has discussed in an elaborate manner about the provisions of the SARFAESI Act vis-a- vis the MSME Act in the context of framework for revival and rehabilitation of MSME. Learned Senior Advocate Mr. Unwalla placed heavy reliance on the observations made by the Hon’ble Apex Court in the case of Shri Shri Swami Samarth Constructions & Finance Solution (supra), more particularly in paragraphs 6, 7 and 8, which are quoted hereinbelow:

“6. The way Mr. Nedumpara urges us to read the Notification and the terms of the FRAMEWORK, if accepted, would lead to the conclusion that every lending bank/secured creditor under the SARFAESI Act would be obliged to find out in every event of continuing default, likely to give rise to classification of the relevant account as NPA, whether the borrower is an MSME to which the FRAMEWORK applies, whether its business has failed or whether it is suffering from any disability to pay its debts; and upon receiving a response, to apply the terms thereof by, inter alia, including the account in the Special Mention Account for the claim for a corrective action plan to be considered by the Committee for stressed MSMEs. This could not have been the intention behind introduction of the FRAMEWORK to aid the MSMEs which, for reasons personal to them, is unable to clear its debt and require revival and rehabilitation that the FRAMEWORK envisages. If indeed it is only the obligation of the lending bank/secured creditor to identify incipient stress in the account