LISA GILL, J.(oral)

1. Prayer in this writ petition is for directing respondent No. 3 to show cause as to why mandatory provision of Clause 2.1 of “Framework for Revival & Rehabilitation of Micro, Small & Medium Enterprises”

issued by RBI has not been complied before declaring petitioner’s account Non Performing Asset (NPA). Further prayer is for quashing notice(s) dated 07.10.2021 (Annexure P-5) and 15.11.2021 (Annexure P-6) issued by respondent No. 3 under Sections 13(2) and 13(4) respectively of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’) and notice dated 1 of 4 05.07.2022 (Annexure P-8) issued by respondent No. 2 pursuant to order dated 06.04.2022 passed by ADC, Ludhiana under Section 14 of SARFAESI Act. There is also a prayer for directing respondents not to take any coercive steps including possession of house in question.

2. Learned counsel for petitioner fairly states that matter is covered against petitioner in view of decision dated 18.12.2023 in CWP-

21657-2022 (M/s Technico Strips and Tubes Pvt. Ltd. and another vs. Deutsche Bank AG and another) and connected writ petitions, wherein it has been held as under :-

“28. Relationship between the respondent-Bank/Financial Institutions and petitioners is clearly governed by privity of contract between parties. Whether there has been any violation of contractual stipulation between the parties or of the RBI regulations as has been urged before us, is necessarily a mixed question of fact and law. We do not find any merit in the argument that learned DRT does not have power or jurisdiction at the appropriate time, hence this argument is also repelled.

xxx xxx xxx

29. Division Bench of High Court of Himachal Pradesh while considering a similar controversy as the one at hand in case of Neelkanth Yarn Vs. Punjab National Bank (supra) held that judicial scrutiny of declaration of account of the petitioners therein as NPA (petitioners therein also claimed to be MSME) was not called for and it is open to learned DRT to go into all these aspects at the relevant time. In case of Neelkanth Yarn Vs. Punjab National Bank (supra), it was held as under:-

“27. From the statutory scheme and decisions noted here-in-above, it is clear that this Court, in exercise of its jurisdiction, cannot go into the decision of 2 of 4 respondent-bank in classifying the petitioner’s account as NPA. If the respondent-bank proceeds further and reaches Section 13(4) of the SARFAESI Act stage, the petitioner-firm can file application under Section 17 of the SARFAESI Act. The DRT can go into the aspect of classifying the account as NPA and also whether RBI guidelines have been violated on any aspect leading to declaring the account as NPA and taking recourse under the SARFAESI Act.

28. It has also been repeatedly held that the aspect of classifying an account as NPA is not justiciable in exercise of power of judicial review under Article 226 of the Constitution.”

30. We are in agreement with the above view taken by High Court of Himachal Pradesh in abovesaid case. It is well within jurisdiction of learned DRT to adjudicate upon matters relating to validity or otherwise of proceedings undertaken by Banks/Financial Institutions under SARFAESI Act and examine whether necessary parameters have been observed and adhered to and applicable Rules and Regulations, including RBI circulars have been complied with. Any intervention by Courts at this stage would be against the avowed letter and spirit of SARFAESI Act. Issue as raked up in these writ petitions is necessarily within the realm of consideration by learned DRT, at the appropriate juncture.

There cannot be a pre-emptory intervention. It was strenuously argued before us that non-intervention by this Court would lead to extremely hars