HIGH COURT OF UTTARAKHAND AT NAINITAL Writ Petition 633 of 2025 (M/S)

Haridwar Education and Research Development Society ….....Petitioner Versus Union of India and others ….….Respondents Present:-

Mr. Siddhartha Sah, Advocate for the petitioner.

Mr. Saurav Adhikari, Standing Counsel for the Union of India.

Mr. Mohit Maulekhi, Brief Holder for the State.

Mr. Siddhartha Jain, Advocate for the respondent nos. 3, 4 & 5.

Hon’ble Ravindra Maithani, J. (Oral)

The challenge in this petition is made to a demand notice dated 09.12.2024 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“the SARFAESI Act”), Annexure No. 9 to the writ petition as well as the communication dated 18.02.2025 under Section 13(3A) of the SARFAESI Act, Annexure No. 14 to the writ petition, by which the reply of the petitioner to the notice under Section 13(2) of the SARFAESI Act has been rejected.

2. Heard learned counsel for the parties and perused the record.

3. Learned counsel for the applicant would submit that the petitioner Society runs a school, for which loan was taken from the respondent bank; the students’ strength dipped alarmingly and it is a breaking point now, therefore, the loan could not be repaid on time. On 24.09.2024, the petitioner society filed an application to the respondent bank for restructuring the loan, which was rejected by the respondent bank by its communication dated 21.11.2024. It is submitted that thereafter a demand notice under Section 13(2) of the SARFAESI Act was received, which was duly replied by the petitioner.

4. Learned counsel for the petitioner further submits that according to RBI Guidelines laid down in MSME Revival and Rehabilitation Framework Instructions and Directions, 2016 (“the Guidelines”), the petitioner falls in the category of Micro, Small and Medium Enterprises (“MSME”); the Ministry of MSME had issued notification dated 29.02.2015 for restructuring of loan, etc. in the cases of MSMEs; the petitioner requested for restructuring of loan, but it has been rejected.

5. Learned counsel would also submit that without taking recourse to the Guidelines, an account may not be declared as Non- Performing Assets (“NPA”) and if it is so done, a writ petition is maintainable. Reference has been made to the case law in the case of PRO KNITS v. Board of Directors of Canara Bank and Ors., (2024) 10 SCC 292.

6. In the case of PRO KNITS (supra), the Hon’ble Supreme Court observed as follows:-

“22. In that view of the matter, we are of the opinion that the findings recorded by the High Court in the impugned order [A. Navinchandra Steels (P) Ltd. v. Union of India, (2024) 1 HCC (Bom) 290 : (2024) 246 Comp Cas 402] that the banks are not obliged to adopt the restructuring process on its own or that the Framework contained in the Notification dated 29- 5-2015, as revised from time to time could not be said to be mandatory in nature, are highly erroneous and cannot be countenanced. The Instructions/Directions issued by the Central Government under Section 9 of the MSMED Act and by the RBI under Section 21 and Section 35-A have statutory force and are binding to all the banking companies.

23. The impugned order [A. Navinchandra Steels (P)

Ltd. v. Union of India, (2024) 1 HCC (Bom) 290 : (2024) 246 Comp Cas 402] therefore is set aside. Since, it has been submitted by the learned counsel for the respondent Banks that in all the cases, the proceedings under the SARFAESI Act have already been concluded and the possession of the respective premises of the petitioners has already been taken over, we do not propose to remand the matters to the High Court for deciding the writ petitions afresh. However, since the High Court has not dealt with the other issues based on the factual aspects of the writ petitions, we clarify that it would be open for the appellants to take recourse to any remedy as may be legally available to them for agitating the issues not decided by the H