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 statutory remedies first.

1. The petitioner - firm, being registered as Micro, Small and Medium Enterprises (for short, MSME), is engaged in the business of trading in all types of yarns, fibers, cotton and fabrics and has availed various financial assistances from the respondent - Bank since 2011, which were renewed from time to time.

2. According to the petitioner - firm, after latest renewal, the petitioner - firm was availing a cash credit limit of Rs.11,95,00,000/-, guaranteed emergency credit line limit of Rs.2,19,00,000/- an in - land letter of credit limit of Rs.11,00,00,000/-. It is averred that the petitioner - firm was a profit making firm and its business continued to flourish, however owing to default by its debtors, the petitioner - firm came under financial stress, which stood aggravated by the conduct of the respondent - Bank by ignoring the mandate of law and circulars issued for the purpose.

3. It is further averred that in the month of April, 2019 statutory auditors, who were appointed as per the guidelines issued by the Reserve Bank of India (fort short, "RBI), audited the respondent - Bank's Branch at Parwanoo and flagged issue of stress by observing that out of total recoverable amount of Rs. 41,00,00,000/- from the petitioner - firm, Rs.26,16,40,924/- was due towards only one debtor of the petitioner - firm, namely, M/s KSM Spinning Mills Limited, whose account had been declared as Non Performing Account (for short, NPA) in the year 2016. The petitioner - firm vide letter dated 10.4.2023 requested the respondent - Bank to consider its account for restructuring and preparation of a correcting action plan, however the respondent - bank did not pay any heed and instead of sending its case before the committee constituted for the purpose, chose to declare the petitioner's account as NPA on 1.5.2023. The petitioner responded to the aforesaid letter vide reply dated 2.5.2023 pointing out therein its financial stress owing to debtors, however the respondent - Bank started taking coercive actions by declaring the account as NPA, issuing recall letter dated 2.5.2023 and notice dated 18.5.2023 under S.13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, "SARFAESI Act").

4. Lastly, it is averred that the petitioner - firm on 23.5.2023 submitted a request for debt restructuring and corrective action plan, but of no avail, constraining the petitioner - firm to issue a legal notice dated 15.6.2023 asking the respondent - Bank to constitute a committee for MSME as per the RBI guidelines and permitting the petitioner - firm to operate its sole account and file the instant petition for grant of following substantive reliefs: -
i. Issue a writ in the nature of Mandamus directing the Respondent No. 2 (PNB) to recall notice dated 18.05.2023 issued under S.13(2) of the SARFAESI Act and also to withdraw recall letter dated 02.05.2023 or keep the proceeding under SARFAESI Act in abeyance until a Corrective Action plan (CAP) is prepared and executed by the committee for stressed Micro, Small and Medium Enterprises constituted under RBI master circular dated 17.03.2016, in the interest of justice, equity and fair play.
ii. Issuance of writ in the nature of Mandamus directing the respondent - bank to allow operations in the account of the petitioner firm as non - allowing of the operations would lead the firm into vicious cycle of losses which would not be recovered for all times to come and the firm would be closed forever leading into unwarranted losses to petitioner