Kerala High Court
Jose vs The Reserve Bank Of India on 23 July, 2025
2025:KER:54632
WP(C) Nos. 14703 of 2025, 14872 of 2025,
14890 of 2025, 14999 of 2025 & 15014 of 2025
-1-
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
WEDNESDAY, THE 23RD DAY OF JULY 2025 / 1ST SRAVANA, 1947
WP(C) NO. 14703 OF 2025
PETITIONER:
SALIN M.J.,
AGED 62 YEARS, ALUMKAL HOUSE, GOLDEN ENCLAVE,
THOTTADA, EDAKKAD, KANNUR, PIN-670707
BY ADVS. SRI. ZAKEER HUSSAIN
SMT. K.A. SANJEETHA
RESPONDENTS:
1 THE RESERVE BANK OF INDIA,
REPRESENTED BY ITS REGIONAL DIRECTOR,
REGIONAL OFFICE, THIRUVANANTHAPURAM, PIN-695033
2 THE AUTHORISED OFFICER,
IDBI BANK LTD, ALFIRA TOWER, OPP.BSNL OFFICE,
GOVT. HOSPITAL ROAD, PAYYANNUR, PIN-670307
3 IDBI BANK LTD,
PAYYANNUR BRANCH, KANNUR,
REPRESENTED BY ITS MANAGER, PIN-670307
R1 SMT.O.M.SHALINA, DEPUTY SOLICITOR GENERAL OF INDIA
R2&R3 BY ADVS. SRI. C. AJITH KUMAR
SMT. VARSHA S.S.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 23.07.2025, ALONG WITH W.P.(C)NOS.14872/2025 AND
CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
2025:KER:54632
WP(C) Nos. 14703 of 2025, 14872 of 2025,
14890 of 2025, 14999 of 2025 & 15014 of 2025
-2-
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
WEDNESDAY, THE 23RD DAY OF JULY 2025 / 1ST SRAVANA, 1947
WP(C) NO. 14872 OF 2025
PETITIONER:
JOSE,
AGED 63 YEARS, S/O.THOMAS,
ALUMKAL HOUSE, ARALAM POST,
AMBALAKKANDY, KANNUR, PIN-670704
BY ADVS. SRI. ZAKEER HUSSAIN
SMT. K.A. SANJEETHA
SRI. ABY GEORGE
RESPONDENTS:
1 THE RESERVE BANK OF INDIA,
REPRESENTED BY ITS REGIONAL DIRECTOR,
REGIONAL OFFICE, THIRUVANANTHAPURAM, PIN-695033
2 THE AUTHORISED OFFICER,
IDBI BANK LTD, ALFIRA TOWER, OPP.BSNL OFFICE,
GOVT. HOSPITAL ROAD, PAYYANNUR, PIN-670307
3 IDBI BANK LTD,
PAYYANNUR BRANCH,KANNUR,
REPRESENTED BY ITS MANAGER, PIN-670307
R1 SMT.O.M.SHALINA, DEPUTY SOLICITOR GENERAL OF INDIA
R2&R3 BY ADVS. SRI. C. AJITH KUMAR
SMT. VARSHA S.S.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 23.07.2025, ALONG WITH W.P.(C).NOS.14703/2025, 14890/2025
AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
2025:KER:54632
WP(C) Nos. 14703 of 2025, 14872 of 2025,
14890 of 2025, 14999 of 2025 & 15014 of 2025
-3-
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
WEDNESDAY, THE 23RD DAY OF JULY 2025 / 1ST SRAVANA, 1947
WP(C) NO. 14890 OF 2025
PETITIONER:
SURESH C.G.,
AGED 54 YEARS, S/O.GOVINDAN,
CHAMUNDIYIL HOUSE,
URUPPUMKUNDU ARALAM, VEERPAD,
KANNUR, PIN-670704
BY ADVS. SRI. ZAKEER HUSSAIN
SMT. K.A. SANJEETHA
SRI. ABY GEORGE
RESPONDENTS:
1 THE RESERVE BANK OF INDIA,
REPRESENTED BY ITS REGIONAL DIRECTOR,
REGIONAL OFFICE, THIRUVANANTHAPURAM, PIN-695033
2 THE AUTHORISED OFFICER,
IDBI BANK LTD, ALFIRA TOWER, OPP.BSNL OFFICE,
GOVT. HOSPITAL ROAD,PAYYANNUR, PIN-670307
3 IDBI BANK LTD,
PAYYANNUR BRANCH, KANNUR,
REPRESENTED BY ITS MANAGER, PIN-670307
R1 SMT.O.M.SHALINA, DEPUTY SOLICITOR GENERAL OF INDIA
R2&R3 BY ADVS. SRI. C. AJITH KUMAR
SMT. VARSHA S.S.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 23.07.2025, ALONG WITH W.P.(C) NOS.14872/2025 AND
CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
2025:KER:54632
WP(C) Nos. 14703 of 2025, 14872 of 2025,
14890 of 2025, 14999 of 2025 & 15014 of 2025
-4-
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
WEDNESDAY, THE 23RD DAY OF JULY 2025 / 1ST SRAVANA, 1947
WP(C) NO. 14999 OF 2025
PETITIONER:
SHAJI,
AGED 49 YEARS, S/O.THOMAS,
ALUMKAL HOUSE, ARALAM POST,
AMBALAKKANDY, KANNUR, PIN-670704
BY ADVS. SRI. ZAKEER HUSSAIN
SMT. K.A. SANJEETHA
SRI. ABY GEORGE
RESPONDENTS:
1 THE RESERVE BANK OF INDIA,
REPRESENTED BY ITS REGIONAL DIRECTOR,
REGIONAL OFFICE, THIRUVANANTHAPURAM, PIN-695033
2 THE AUTHORISED OFFICER,
IDBI BANK LTD, ALFIRA TOWER, OPP.BSNL OFFICE,
GOVT. HOSPITAL ROAD, PAYYANNUR, PIN-670307
3 IDBI BANK LTD.,
PAYYANNUR BRANCH, KANNUR
REPRESENTED BY ITS MANAGER, PIN-670307
R1 SMT.O.M.SHALINA, DEPUTY SOLICITOR GENERAL OF INDIA
R2&R3 BY ADVS. SRI. C. AJITH KUMAR
SMT. VARSHA S.S.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 23.07.2025, ALONG WITH W.P.(C) NOS.14872/2025 AND
CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
2025:KER:54632
WP(C) Nos. 14703 of 2025, 14872 of 2025,
14890 of 2025, 14999 of 2025 & 15014 of 2025
-5-
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
WEDNESDAY, THE 23RD DAY OF JULY 2025 / 1ST SRAVANA, 1947
WP(C) NO. 15014 OF 2025
PETITIONER:
MOHANAN V.S.,
AGED 63 YEARS, S/O.SHANKARA PILLAI,
VELLIYAMKUNNEL HOUSE, MUNDAYAMPARAMBA P.O.,
AYYANKUNNU, PAYAM, KANNUR, PIN-670704
BY ADVS. SRI. ZAKEER HUSSAIN
SMT. K.A. SANJEETHA
SRI. ABY GEORGE
RESPONDENTS:
1 THE RESERVE BANK OF INDIA,
REPRESENTED BY ITS REGIONAL DIRECTOR,
REGIONAL OFFICE, THIRUVANANTHAPURAM, PIN-695033
2 THE AUTHORISED OFFICER,
IDBI BANK LTD., ALFIRA TOWER, OPP.BSNL OFFICE,
GOVT. HOSPITAL ROAD, PAYYANNUR, PIN-670307
3 IDBI BANK LTD.,
PAYYANNUR BRANCH, KANNUR
REPRESENTED BY ITS MANAGER, PIN-670307
R1 SMT.O.M.SHALINA, DEPUTY SOLICITOR GENERAL OF INDIA
R2&R3 BY ADVS. SRI. C. AJITH KUMAR
SMT. VARSHA S.S.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 23.07.2025, ALONG WITH W.P.(C)NOS.14872/2025 AND
CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
2025:KER:54632
WP(C) Nos. 14703 of 2025, 14872 of 2025,
14890 of 2025, 14999 of 2025 & 15014 of 2025
-6-
MOHAMMED NIAS C.P., J.
-----------------------------------------------------
W.P.(C) Nos. 14703 of 2025, 14872 of 2025,
14890 of 2025, 14999 of 2025
&
W.P.(C) No.15014 of 2025
----------------------------------------------------
Dated this the 23rd day of July, 2025
JUDGMENT
W.P.(C) No.14703 of 2025 is taken as the lead case, and the documents in the said case are being referred to in the judgment.
2. The petitioner had availed a Kissan Cash Credit limit (KCC) of Rs.30,00,000/- from the 3rd respondent Bank through Ext.P1 on 25.09.2017. Ext.P1 stipulates that the Crop Loan Limit (KCC) has been assessed for 5 years, with a 10% increase in the assessed limit for the first year, and a 10% increase in the limit for the second, third, fourth, and fifth years and the same will undergo a change in case of a change in the Scale of Finance (SoF), area under cultivation, or change in cropping pattern/variety/method. It is specifically 2025:KER:54632 WP(C) Nos. 14703 of 2025, 14872 of 2025, 14890 of 2025, 14999 of 2025 & 15014 of 2025 -7- stated that the KCC limit is valid for 5 years, subject to annual review. In the other writ petitions also, the petitioners had availed similar loans for Rs. 30,00,000/-.
3. The petitioners are aggrieved by the classification of the account as Non-Performing Assets (NPA), alleging that the same violates the Master Circular issued by the Reserve Bank of India on 1 st April, 2025. Specific reference is made in Clause 2.2 of the said Circular, which deals with the treatment of accounts as NPAs:-
"2.2 Treatment of Accounts as NPAs:
2.2.1 Record of Recovery:
(i)The treatment of an asset as NPA should be based on the record of recovery. Banks should not treat an advance as NPA merely due to existence of some deficiencies which are temporary in nature such as non-availability of adequate drawing power, balance outstanding exceeding the limit, non-submission of stock statements and the non-renewal of the limits on the due date, etc. Where there is a threat of loss, or the recoverability of the advances is in doubt, the asset should be treated as NPA.
(ii) A credit facility should be treated as NPA as per 2025:KER:54632 WP(C) Nos. 14703 of 2025, 14872 of 2025, 14890 of 2025, 14999 of 2025 & 15014 of 2025 -8- norms given in paragraph 2.1 above. However, where entire overdues pertaining to all the credit facilities availed by a borrower from a given bank have Baan regularised by repayment through genuine sources (not by sanction of additional facilities or transfer of funds between accounts), the accounts may be upgraded to 'standard' asset category. In such cases, it should, however, be ensured that the accounts remain in order subsequently and a solitary credit entry made in an account on or before the balance sheet date which extinguishes the overdue amount of interest or installment of principal is not reckoned as the sole criteria for treatment of the account as a standard."
4. The learned counsel for the petitioners contends that the KCC limits were renewed, and the same is seen from the entry in the statement of account, which shows payment of stamp charges for renewal. It is also pointed out that the interest was paid and accepted by the Bank, even after the expiry of the original sanction of the facility. Thus, contending that the classification of the account as NPA is against the Master Circular, the Writ Petitions are filed.
2025:KER:54632 WP(C) Nos. 14703 of 2025, 14872 of 2025, 14890 of 2025, 14999 of 2025 & 15014 of 2025 -9-
5. A statement has been filed on behalf of the respondent Bank inter alia contending that there was no renewal after the 5 years, and despite reminders being sent to the petitioners, the KCC accounts were not renewed. It is also submitted that, though the period of the facility ended in 2022, the accounts were classified as NPA only in 2024.
6. In view of the above contentions, this Court had passed the following order on 7th July, 2025:-
In all these writ petitions, the contention raised by the learned counsel for the petitioners is that the bank has no right to declare the loan account as NPA, as the same is against the Master Circular issued by the Reserve Bank of India on 01.04.2025.
2. The learned counsel for the respondent bank submits that the petitioners were in arrears as they failed to pay the principal amount, interest and other monies to the bank despite repeated requests/reminders, and ultimately they classified the account as NPA on 21.09.2024.
3. Considering the rival contentions, there will be a direction to the respondent bank to produce the 2025:KER:54632 WP(C) Nos. 14703 of 2025, 14872 of 2025, 14890 of 2025, 14999 of 2025 & 15014 of 2025 -10- request/reminder issued to the petitioners demanding payment from the petitioners for the credit facilities availed by them. The bank shall produce the above within ten days.
7. Pursuant to the above direction, the Bank filed an affidavit and produced a communication issued to the petitioner dated 01.06.2024, stating that for extension of the KCC loan facility of Rs.30,00,000/-, the requisite documents for renewal were to be submitted, failing which the account would be classified as NPA. Learned counsel for the respondent Bank submits that they did not immediately classify the account as NPA in 2022, and they waited for the crop seasons to classify the same as NPA.
8. The petitioner disputes the said document and even the signature on the said document. No documents requiring the petitioners to renew the loans were produced at the time of filing the counter affidavit, and the mention of reminders in the documents issued by the bank is false.
9. As stated above, the petitioners seriously dispute the 2025:KER:54632 WP(C) Nos. 14703 of 2025, 14872 of 2025, 14890 of 2025, 14999 of 2025 & 15014 of 2025 -11- contentions of the Bank that the KCC loan accounts were not renewed, and also point out that the circumstance of having paid the interest, which was accepted by the Bank without demur, even after the alleged expiry of the facility, disproves the Bank's contention. However, the contention of the Bank is that no amounts were being paid towards the principal, and only after paying the entire amount could the limits be renewed.
10. Taking note of the fact that even according to the Bank, the KCC loans were not renewed, but they took action only after two crop seasons in 2024, I am inclined to grant a chance to the petitioners to approach the Bank with renewal applications, which the Bank will consider in terms of the relevant circulars/guidelines.
11. Under such circumstances, I am inclined to dispose of the Writ Petitions directing the petitioners to approach the Bank to either seek an extension of the KCC limits or to take such steps to regularise the loan account in terms of the Master Circular. If the petitioners approach the Bank within two weeks from today with an appropriate application, the Bank will consider the same and pass 2025:KER:54632 WP(C) Nos. 14703 of 2025, 14872 of 2025, 14890 of 2025, 14999 of 2025 & 15014 of 2025 -12- orders within a month thereafter, in terms of the Master Circular/applicable guidelines. Till a decision is taken as directed above, no further coercive actions shall be taken against the petitioners.
The Writ Petitions are disposed of as above.
Sd/-
MOHAMMED NIAS C.P. JUDGE bpr 2025:KER:54632 WP(C) Nos. 14703 of 2025, 14872 of 2025, 14890 of 2025, 14999 of 2025 & 15014 of 2025 -13- APPENDIX OF WP(C) 14703/2025 PETITIONER'S EXHIBITS Exhibit P1 TRUE COPY OF THE SANCTION LETTER DATED 25/09/2017 ISSUED BY THE 3RD RESPONDENT BANK.
Exhibit P2 TRUE COPY OF THE NOTICE DATED 30/09/2024 ISSUED BY THE 3RD RESPONDENT BANK. Exhibit P3 TRUE COPY OF THE DEMAND NOTICE DATED 02/12/2024 ISSUED BY THE 2ND RESPONDENT. Exhibit P4 TRUE COPY OF THE REPLY DATED 20/02/2025 SUBMITTED BY THE PETITIONER.
Exhibit P5 TRUE COPY OF THE MASTER CIRCULAR DATED 01/04/2025 ISSUED BY THE RESERVE BANK OF INDIA.
Exhibit P6 TRUE COPY OF THE CUSTOMER ACKNOWLEDGMENT DATED 03/05/2025 SHOWING THE PAYMENT OF INTEREST OF RS.3,50,000/- TO THE KCC LOAN.
Exhibit P7 TRUE COPY OF THE STATEMENT OF ACCOUNTS DATED 01/08/2024 ISSUED BY THE RESPONDENT BANK.
RESPONDENTS' EXHIBITS Exhibit-R3 (a) TRUE COPY OF THE REPLY LETTER DATED 16/04/2025 ISSUED BY THESE RESPONDENTS TO THE PETITIONER Exhibit-R3(b) TRUE COPY OF LETTER DATED 01-06-24 ISSUED BY APPLICANTS 2025:KER:54632 WP(C) Nos. 14703 of 2025, 14872 of 2025, 14890 of 2025, 14999 of 2025 & 15014 of 2025 -14- APPENDIX OF WP(C) 14872/2025 PETITIONER'S EXHIBITS Exhibit P1 TRUE COPY OF THE SANCTION LETTER DATED 25/09/2017 ISSUED BY THE 3RD RESPONDENT BANK.
Exhibit P2 TRUE COPY OF THE NOTICE DATED 30/09/2024 ISSUED BY THE 3RD RESPONDENT BANK. Exhibit P3 TRUE COPY OF THE DEMAND NOTICE DATED 02/12/2024 ISSUED BY THE 2ND RESPONDENT. Exhibit P4 TRUE COPY OF THE REPLY DATED 20/02/2025 SUBMITTED BY THE PETITIONER.
Exhibit P5 TRUE COPY OF THE MASTER CIRCULAR DATED 01/04/2025 ISSUED BY THE RESERVE BANK OF INDIA.
Exhibit P6 TRUE COPY OF THE CUSTOMER ACKNOWLEDGMENT DATED 03/05/2025 SHOWING THE PAYMENT OF INTEREST OF RS.3,50,000/- TO THE KCC LOAN.
Exhibit P7 TRUE COPY OF THE STATEMENT OF ACCOUNTS DATED 01/08/2024 ISSUED BY THE RESPONDENT BANK.
RESPONDENTS' EXHIBITS Exhibit-R3 (a) TRUE COPY OF THE REPLY LETTER DATED 16/04/2025 ISSUED BY THESE RESPONDENTS TO THE PETITIONER Exhibit-R3(b) TRUE COPY OF THE LETTER DATED 01.06.2024 ISSUED BY THE APPLICANTS 2025:KER:54632 WP(C) Nos. 14703 of 2025, 14872 of 2025, 14890 of 2025, 14999 of 2025 & 15014 of 2025 -15- APPENDIX OF WP(C) 14890/2025 PETITIONER'S EXHIBITS Exhibit P1 TRUE COPY OF THE SANCTION LETTER DATED 16/12/2017 ISSUED BY THE 3RD RESPONDENT BANK.
Exhibit P2 TRUE COPY OF THE NOTICE DATED 19/12/2024 ISSUED BY THE 3RD RESPONDENT BANK. Exhibit P3 TRUE COPY OF THE DEMAND NOTICE DATED 27/01/2025 ISSUED BY THE 2ND RESPONDENT. Exhibit P4 TRUE COPY OF THE REPLY DATED 01/04/2025 SUBMITTED BY THE PETITIONER.
Exhibit P5 TRUE COPY OF THE MASTER CIRCULAR DATED 01/04/2025 ISSUED BY THE RESERVE BANK OF INDIA.
Exhibit P6 TRUE COPY OF THE CUSTOMER ACKNOWLEDGMENT DATED 03/05/2025 SHOWING THE PAYMENT OF INTEREST OF RS.3,50,000/- TO THE KCC LOAN.
Exhibit P7 TRUE COPY OF THE STATEMENT OF ACCOUNTS DATED 01/08/2024 ISSUED BY THE RESPONDENT BANK.
RESPONDENTS' EXHIBITS Exhibit-R3 (a) TRUE COPY OF THE REPLY LETTER DATED 16/04/2025 ISSUED BY THESE RESPONDENTS TO THE PETITIONER Exhibit-R3(b) TRUE COPY OF THE LETTER DATED 01.06.2024 ISSUED BY APPLICANTS 2025:KER:54632 WP(C) Nos. 14703 of 2025, 14872 of 2025, 14890 of 2025, 14999 of 2025 & 15014 of 2025 -16- APPENDIX OF WP(C) 14999/2025 PETITIONER'S EXHIBITS Exhibit P1 TRUE COPY OF THE SANCTION LETTER DATED 25/09/2017 ISSUED BY THE 3RD RESPONDENT BANK.
Exhibit P2 TRUE COPY OF THE NOTICE DATED 30/09/2024 ISSUED BY THE 3RD RESPONDENT BANK. Exhibit P3 TRUE COPY OF THE DEMAND NOTICE DATED 02/12/2024 ISSUED BY THE 2ND RESPONDENT. Exhibit P4 TRUE COPY OF THE REPLY DATED 20/02/2025 SUBMITTED BY THE PETITIONER.
Exhibit P5 TRUE COPY OF THE MASTER CIRCULAR DATED 01/04/2025 ISSUED BY THE RESERVE BANK OF INDIA.
Exhibit P6 TRUE COPY OF THE CUSTOMER ACKNOWLEDGMENT DATED 03/05/2025 SHOWING THE PAYMENT OF INTEREST OF RS.3,50,000/- TO THE KCC LOAN.
Exhibit P7 TRUE COPY OF THE STATEMENT OF ACCOUNTS DATED 01/08/2024 ISSUED BY THE RESPONDENT BANK.
RESPONDENTS' EXHIBITS Exhibit-R3 (a) TRUE COPY OF THE REPLY LETTER DATED 16/04/2025 ISSUED BY THESE RESPONDENTS TO THE PETITIONER Exhibit-R3(b) TRUE COPY OF THE LETTER DATED 01.06.2024 ISSUED BY APPLICANTS 2025:KER:54632 WP(C) Nos. 14703 of 2025, 14872 of 2025, 14890 of 2025, 14999 of 2025 & 15014 of 2025 -17- APPENDIX OF WP(C) 15014/2025 PETITIONER'S EXHIBITS Exhibit P1 TRUE COPY OF THE SANCTION LETTER DATED 16/12/2017 ISSUED BY THE 3RD RESPONDENT BANK.
Exhibit P2 TRUE COPY OF THE NOTICE DATED 19/12/2024 ISSUED BY THE 3RD RESPONDENT BANK. Exhibit P3 TRUE COPY OF THE DEMAND NOTICE DATED 27/01/2025 ISSUED BY THE 2ND RESPONDENT. Exhibit P4 TRUE COPY OF THE REPLY DATED 01/04/2025 SUBMITTED BY THE PETITIONER.
Exhibit P5 TRUE COPY OF THE MASTER CIRCULAR DATED 01/04/2025 ISSUED BY THE RESERVE BANK OF INDIA.
Exhibit P6 TRUE COPY OF THE CUSTOMER ACKNOWLEDGEMENT DATED 03/05/2025 SHOWING THE PAYMENT OF INTEREST OF RS.3,50,000/- TO THE KCC LOAN.
Exhibit P7 TRUE COPY OF THE STATEMENT OF ACCOUNTS DATED 01/08/2024 ISSUED BY THE RESPONDENT BANK.
RESPONDENTS' EXHIBITS Exhibit-R3 (a) TRUE COPY OF THE REPLY LETTER DATED 16.04.2025 ISSUED BY THESE RESPONDENTS TO THE PETITIONER Exhibit-R3(b) TRUE COPY OF LETTER DATED 01.06.2024 ISSUED TO THE WRIT PETITIONER