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2026 Supreme(Online)(Ker) 27755
IN THE HIGH COURT OF KERALA AT ERNAKULAM
M.A.ABDUL HAKHIM, J
MANSOOR ALI – Appellant
Versus
THE NODAL OFFICER, RESERVE BANK OF INDIA – Respondent
WP(C) NO. 9516 OF 2026
For the Appellants/Petitioners: SHRI.FAIZEL K.
For the Respondents: SRI.MILLU DANDAPANI, SHRI.P.PAULOCHAN ANTONY, SHRI.SREEJITH K., SHRI. G.VISWANATHAN
SARFAESI proceedings pendency irrelevant to NPA classification under RBI IRAC norms if interest overdue exceeds 90 days.
Headnote:The petitioner challenged the Banking Ombudsman's order upholding the classification of his account as Non-Performing Asset (NPA) under RBI’s IRAC Norms. Essential facts include prior rejection by Karnataka Ombudsman due to alleged pendency of SARFAESI proceedings, set aside by Karnataka High Court confirming no such pendency via RTI, transfer to Kerala Ombudsman who reaffirmed NPA status. Court found the Ombudsman correctly analyzed account credits and interest overdue beyond ninety days. Issues framed: Whether bank justified in classifying account as NPA; impact of SARFAESI proceedings pendency. Ratio: Pendency under Section 14 SARFAESI Act immaterial to NPA determination; Ombudsman justified classification based on interest not serviced for over ninety days. Writ petition dismissed; no interference with Ext.P4 order.
| Table of Content |
|---|
| 1. challenges npa classification and ombudsman order. (Para 1) |
| 2. arguments on sarfaesi pendency and prior remand. (Para 2) |
| 3. npa justified by overdue interest analysis. (Para 4) |
| 4. writ petition dismissed, no interference. (Para 5) |
J U D G M E N T
1. Petitioner has filed this Writ Petition challenging Ext.P4 Order of the Banking Ombudsman. The grievance of the Petitioner is that the Respondent No.2 illegally classified the Account of the Petitioner as NPA, which is in violation of the RBI’s IRAC Norms.
2. The learned Counsel for the Petitioner pointed out that the Petitioner had earlier approached the Banking Ombudsman, Karnataka, who rejected the complaint of the Petitioner on the sole ground that SARFAESI proceedings are pending before the CJM Court, Ernakulam. Since no SARFAESI proceedings are pending before the CJM Court, Ernakulam, as revealed from the RTI Reply obtained by the Petitioner, the High Court of Karnataka, by Ext.P3 judgment, set aside the Order of the Banking Ombudsman and remanded the matter back to the Banking Ombudsman, specifically finding that SARFAESI proceedings are not pending before the CJM Court, Ernakulam. Since the property is situated in Kerala, the matter was transferred to the Banking Ombudsman, Kerala, who passed the impugned Ext.P4 Order, again finding that SARFAESI proceedings are pending before the CJM Court, Ernakulam. When the Karnataka High Court has found that SARFAESI proceedings are not pending before the CJM Court, Ernakulam, it is not open to the Banking Ombudsman to find that SARFAESI proceedings are pending before the CJM Court, Ernakulam. It is in violation of Ext.P3 judgment of the Karnataka High Court. 3. The learned Counsel for the Respondent No.1 submitted that the pendency of SARFAESI proceedings before the CJM Court, Ernakulam, is clearly dealt with in Paragraph No.12 of Ext.P4 Order and the reason for stating non- pendency of such proceedings in the RTI Reply is also specifically referred. It was further submitted that, whatever be the pendency of the case, the question is whether the Bank is justified in classifying the Account as NPA or not, and that the said question has been specifically dealt with and answered by the Banking Ombudsman in Ext.P4.
4. On going through the Ext.P4 Order, I find that the Banking Ombudsman has specifically considered the issue as to whether the Bank is justified in classifying the Account of the Petitioner as NPA with reference to the facts and figures. After analysing the credits in the Account, the Banking Ombudsman entered a finding that the Petitioner did not service the interest fully for a period of ninety days and that the interest remained outstanding for a period of more than ninety days. The question of pendency of any proceedings before the Magistrate Court under Section 14 of the SARFAESI Act is not material for deciding the question whether the account is an NPA or not.
5. Accordingly, I do not find any ground to interfere with Ext.P4 Order, and the Writ Petition is accordingly dismissed.
