[Cites 12, Cited by 0]
Kerala High Court
M/S. Kan Agro Spices vs The Board Of Directors Of Rbl Bank Ltd on 26 March, 2026
Author: Anil K. Narendran
Bench: Anil K. Narendran
W.A.No.400 of 2026 1 2026:KER:27057
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE ANIL K. NARENDRAN
&
THE HONOURABLE MR. JUSTICE MURALEE KRISHNA S.
THURSDAY, THE 26TH DAY OF MARCH 2026 / 5TH CHAITHRA, 1948
WA NO. 400 OF 2026
AGAINST THE ORDER DATED 21.01.2026 IN I.A.NO.3 OF 2026 IN
WP(C)NO.42585 OF 2025 OF HIGH COURT OF KERALA
APPELLANTS/PETITIONERS:
1 M/S. KAN AGRO SPICES,
XIV/125, KANJIRAVELI, PULINCHODE,
PAZHAMTHOTTAM P.O., ERNAKULAM,
KERALA REPRESENTED BY ITS MANAGING PARTNER, PIN -
683565
2 GEEBA JENNY,
AGED 45 YEARS
MANAGING PARTNER, M/S. KAN AGRO SPICES, XIV/125,
KANJIRAVELI, PULINCHODE, PAZHAMTHOTTAM P.O.,
ERNAKULAM, KERALA, PIN - 683565
3 JENNY VARGHESE,
AGED 50 YEARS
PARTNER, M/S. KAN AGRO SPICES, XIV/125,
KANJIRAVELI, PULINCHODE, PAZHAMTHOTTAM P.O.,
ERNAKULAM, KERALA, PIN - 683565
BY ADVS.
SMT. MARIA NEDUMPARA
SHRI.SHAMEEM FAYIZ V.P.
SHRI.ROY PALLIKOODAM
RESPONDENT(S)/RESPONDENT:
1 THE BOARD OF DIRECTORS OF RBL BANK LTD,
1ST LANE, SHAHUPURI, KOLHAPUR,
REPRESENTED BY ITS CHAIRMAN, PIN - 416001
2 THE AUTHORIZED OFFICER,
W.A.No.400 of 2026 2 2026:KER:27057
RBL BANK LTD., GROUND FLOOR, NO. 35/265, 267/268,
ARUN CHAMBERS, EDAPALLY ALUVA ROAD, PALARIVOTTAM,
ERNAKULAM, KERALA, PIN - 682026
3 THE BOARD OF DIRECTORS OF YES BANK LTD,
OFF. WESTERN EXPRESS HIGHWAY, SANTACRUZ (EAST),
MUMBAI REPRESENTED BY ITS CHAIRMAN, PIN - 400055
4 THE AUTHORIZED OFFICER,
YES BANK LTD, FIRST FLOOR, PUTHURAN PLAZA,
NORTHERN SIDE, KPCC JUNCTION, MG ROAD, KOCHI,
KERALA, PIN - 682011
5 THE BOARD OF DIRECTORS OF KARUR VYSYA BANK LTD.,
REGISTERED & CENTRAL OFFICE, NO. 20, ERODE ROAD,
VADIVEL NAGAR, L.N.S., KARUR
REPRESENTED BY ITS CHAIRMAN, PIN - 639002
6 THE AUTHORIZED OFFICER,
KARUR VYSYA BANK LTD., CHENNAI NEO, KARUMUTTU CENTER,
OLD NO.498, NEW NO.634, ANNA SALAI, SATYA MURTHY
NAGAR, TEYNAMPET, CHENNAI, PIN - 600035
7 THE BOARD OF DIRECTORS OF MAHINDRA & MAHINDRA
FINANCIAL SERVICES LTD
4TH FLOOR, MAHINDRA TOWERS, DR. G.M. BHONSLE MARG,
P.K. KURNE CHOWK, WORLI, MUMBAI
REPRESENTED BY ITS CHAIRMAN, PIN - 400018
8 AUTHORIZED OFFICER
MAHINDRA & MAHINDRA FINANCIAL SERVICES LTD.,
1ST FLOOR, AMBADY TOWERS, TOLL JUNCTION, EDAPPALLY,
ERNAKULAM DISTRICT, PIN 682024, PIN - 683565
9 THE BOARD OF DIRECTORS OF TATA CAPITAL FINANCIAL
SERVICES LTD,
11TH FLOOR, TOWER A, PENINSULA BUSINESS PARK,
GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI
REPRESENTED BY ITS CHAIRMAN, PIN - 400013
10 THE AUTHORIZED OFFICER,
TATA CAPITAL FINANCIAL SERVICES LTD., 1ST FLOOR,
CENTENNIAL SQUARE,6A, DR AMBEDKAR SALAI,
KODAMBAKKAM, CHENNAI, TAMIL NADU, PIN - 600024
11 UNION OF INDIA
REPRESENTED BY SECRETARY TO MINISTRY OF FINANCE,
DEPARTMENT OF FINANCIAL SERVICES,
JEEVAN DEEP BUILDING, PARLIAMENT HOUSE,
NEW DELHI, PIN - 110001
W.A.No.400 of 2026 3 2026:KER:27057
12 MINISTRY OF MSMES
GOVERNMENT OF INDIA, REPRESENTED BY THE SECRETARY,
GOVERNMENT OF INDIA, UDHYOG BHAVAN,
NEW DELHI, PIN - 110011
13 RESERVE BANK OF INDIA
REPRESENTED BY ITS GOVERNOR NEW CENTRAL OFFICE
BUILDING, SHAHID BHAGAT SINGH ROAD,
FORT, MUMBAI, PIN - 400001
14 STATE OF KERALA
REPRESENTED BY ITS CHIEF SECRETARY,
THIRUVANANTHAPURAM, PIN - 695001
15 GISA GEORGE
ADVOCATE COMMISSIONER APPOINTED IN CMP 10897/2025 OF
CJM COURT, THRISSUR) THRISSUR BAR ASSOCIATION,
AYYANTHOLE, PIN - 680003
16 STATION HOUSE OFFICER
KORATTY POLICE STATION, THRISSUR DT, PIN - 680308
17 STATION HOUSE OFFICER
ALUVA EAST POLICE STATION, ERNAKULAM DT, PIN - 683101
18 STATION HOUSE OFFICER
IRITTY POLICE STATION, KANNUR DT, PIN - 670703
19 STATION HOUSE OFFICER
ALUVA WEST POLICE STATION, ERNAKULAM DT, PIN - 683101
20 STATION HOUSE OFFICER
MUVATTUPUZHA POLICE STATION, ERNAKULAM DT, PIN -
682316
21 STATION HOUSE OFFICER
PALA POLICE STATION, KOTTAYAM DT, PIN - 686574
22 STATION HOUSE OFFICER
KOTTAYAM POLICE STATION, KOTTAYAM DT, PIN - 686001
23 STATION HOUSE OFFICER
MALA POLICE STATION, THRISSUR DT, PIN - 687032
24 STATION HOUSE OFFICER
PUTHENCRUZ POLICE STATION, ERNAKULAM DT, PIN - 682308
25 STATION HOUSE OFFICER
PONNANI POLICE STATION, MALAPPURAM DT, PIN - 679586
W.A.No.400 of 2026 4 2026:KER:27057
26 STATION HOUSE OFFICER
KUNNATHUNADU POLICE STATION, PATTIMATTOM P.O,
ERNAKULAM DT, PIN - 682311
27 STATION HOUSE OFFICER
MARAD POLICE STATION, ERNAKULAM DT, PIN - 682004
28 THE ATTORNEY GENERAL OF INDIA
OFFICE OF THE ATTORNEY GENERAL, 10 MOTILAL NEHRU MARG,
NEW DELHI, PIN - 110001
29 THE CHAIRMAN
STATE BANK OF INDIA STATE BANK BHAWAN, NARIMAN POINT,
MUMBAI, PIN - 400021
30 ANIL DHIRAJLAL AMBANI
SEA WIND, CUFFE PARADE, MUMBAI, PIN - 400005
31 MUKESH DHIRAJLAL AMBANI
ANTILLA, ALTAMOUNT ROAD, CUMBALLA HILL,
MUMBAI, PIN - 400036
32 ADV. REJIMOL. M.K
ADVOCATE COMMISSIONER APPOINTED IN MC NO.1047/2025 IN
THE FILES OF CHIEF JUDICIAL MAGISTRATE, ERNAKULAM BAR
ASSOCIATION, ERNAKULAM, PIN - 682031
33 ADV. SURAJ S.
ADVOCATE COMMISSIONER APPOINTED IN MC NO.13367/2025 IN
THE FILES OF CHIEF JUDICIAL MAGISTRATE, THRISSUR BAR
ASSOCIATION, THRISSUR, PIN - 680001
BY ADV SHRI.VIVEK A.V., CGC
OTHER PRESENT:
SMT. O. M SHALINA, DSGI;
SRI. P. PAULOCHAN ANTONY;
SMT. NISHA BOSE, SR. GP
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON
26.03.2026, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.A.No.400 of 2026 5 2026:KER:27057
JUDGMENT
Anil K. Narendran, J.
The appellants are the petitioners in W.P.(C)No.42585 of
2025, which was one filed invoking the extraordinary jurisdiction
of this Court under Article 226 of the Constitution of India,
seeking the following reliefs;
a) To declare that the notification dated 29.05.2015, in
unmistakable terms, declares that the MSME-borrower has
no obligation to make an application for resolution of
stress and, on the contrary, that banks and financial
institutions are duty-bound to identify incipient stress
based on the illustrative signs indicated in Annexure-I to
the RBI Circular dated 17.03.2016; and further, that in
any case where the bank has failed to identify incipient
stress, it is duty-bound to classify the account as SMA-1 if
the default is more than 31 days and as SMA-2 if the
default is more than 61 days, and thereafter shall
constitute a Committee and make a reference to that
Committee for resolution of stress; and further, that the
Committee is empowered to permit recovery in terms of
Para 5(3)(iv) if the resolution of stress is not feasible; and
b) In furtherance of prayer (a) above, to declare that the
judgments of the Supreme Court in Pro Knits v. Canara
Bank &Ors. [(2024) 10 SCC 292] and Shree Shree Swami
Samarth Construction & Anr v. The Board of Directors of
NKGSB Co-op Bank & Ors. were rendered per incuriam
and sub silentio and will not bind the courts and tribunals
in this country under Article 141 of the Constitution,
W.A.No.400 of 2026 6 2026:KER:27057
inasmuch as-- (i) in Pro Knits, the Court had, contrary to
the letter and spirit of the notification, observed that if the
MSME had allowed its account to be classified as NPA and
for recovery action to be initiated, having failed to bring to
the notice of the bank that it is an MSME supported by
identifiable and verifiable documents, it cannot be allowed
to "thwart" the SARFAESI action at a later stage; and (ii)
in Shree Shree Swami Samarth, the Court observed that if
the MSME had not even replied to the notice under
Section 13(2) and claimed protection as an MSME
supported by an affidavit, the recovery action cannot
thereafter be challenged - which, to repeat, are contrary
to the very letter as well as the spirit of the notification
and have created a scenario where the said judgments
have been instrumental in denying the benefit of the
notification to MSMEs across the country.
c) To declare that the entire proceedings initiated by the
Respondent against the Petitioners under Sections 13(2),
13(4) and 14 of the SARFAESI Act, are unconstitutional,
illegal and void, being in violation of Paragraph 5(4)(iii) of
the notification dated 29.05.2015 under the MSMED Act
and without jurisdiction for more than one reason;
d) to declare that the loss and injuries suffered by the
Petitioners being far in excess of the claim of the Bank as
against the Petitioners, the Petitioners are entitled to
compensation and damages which he is entitled to seek in
the very same proceedings the Bank has instituted against
him;
e) to declare that insofar as the MSMED Act and the
notification dated 29.05.2015 creates certain obligations
and burden as against the Bank and certain rights and
W.A.No.400 of 2026 7 2026:KER:27057
protection in favour of the MSME borrower in furtherance
of larger public interest, and has not provided for any
forum for the enforcement of the said inter se
rights/adjudication of disputes, the Civil Court jurisdiction
is not ousted;
f) to issue a permanent prohibitory injunction, restraining
and prohibiting the Respondent-Bank, and its Authorized
officer, from proceeding any further under Section 13(2),
13(4) of the SARFAESI Act, 2002;
g) Declare that the circular dated 17.03.2016 restricting,
nay completely taking away, the benefit of the notification
dated 29.05.2015 from MSMEs whose credit limit exceeds
Rs.25 crores, is illegal, ultra vires the MSMED
Act/notification and void to that extent that it takes away
such right;
h) to declare that the circulars dated 17.03.2016,
26.06.2020, and 04.06.2021 are liable to be read
together, and that by virtue of the circular dated
04.06.2021, the cap of Rs.25 crores imposed by the RBI
stands altered and amended;
i) to declare that the Respondent Bank is not entitled to
any of the remedies which it seeks to enforce in terms of
the notice under Sections 13(2) of the Securitization and
Reconstruction of Financial Assets and Enforcement of
Securities Interest Act, 2002 so also under Section 14 of
the said Act inasmuch as it is not the Petitioners who are
guilty of any breach of contract and who are under any
obligation in terms of the contract between him and the
Respondent-Bank, but the latter, namely the Respondent-
Bank and its officers who are guilty of gross breach of
contract, culpable negligence, customer unfriendly attitude
W.A.No.400 of 2026 8 2026:KER:27057
and malicious and tortious actions, and thereby have
caused damage and loss to the Petitioners far in excess of
the very claim of the Respondent-Bank and, to put it
succinctly, to grant in favour of the Petitioners a negative
declaration that no amount is due from the Petitioners to
the Respondent-Bank;
j) to issue a writ in the nature of prohibition restraining
and prohibiting the Respondent-bank from proceeding any
further in furtherance of the action initiated under Section
13, 13(2), 13(4) and 14 of the SARFAESI Act, Section 19
of the Recovery of Debts and Bankruptcy Act or under any
other law or in any manner whatsoever to interfere with
the absolute estate, right, title, possession and enjoyment
of the properties of Petitioners which the Respondents
falsely claimed to be secured at their hands;
k) To issue a writ in the nature of certiorari or any other
appropriate writ, order or direction, calling for the entire
records and proceedings leading to the classification of the
Petitioners' account as a Non-Performing Asset (NPA), the
issuance of notices under Sections 13(2) and 13(4), and
the order passed under Section 14 of the SARFAESI Act,
2002 as well as the records pertaining to the purported
auctions conducted by the Respondent Bank.
l) to declare that while the Respondent Bank is entitled to
enforce all remedies available in law as against the
Petitioner, common law, equitable or declaratory, it can
only have one forum, and that it having instituted a suit in
the DRT, the SARFAESI action is without jurisdiction and
void."
2. The appellants-petitioners have filed this writ appeal,
W.A.No.400 of 2026 9 2026:KER:27057
invoking the provisions under Section 5(i) of the Kerala High
Court Act, 1958, challenging the interim order dated 21.01.2026
of the learned Single Judge in that writ petition, which reads
thus;
"The prayer in this I.A. is to grant an interim stay against
the respondent Bank on further measures taken under
sections 13 and 14 of the SARFAESI Act and through the
orders in M.C.No.1651 of 2025 dated 17.11.2025 passed
by the CJM, Ernakulam and CMP No.13367 of 2025 on the
files of CJM, Thrissur dated 01.12.2025.
2. Counsel for the respondent Bank submits that pursuant
to the order issued by the CJM, Ernakulam in M.C.NO.
1625 of 2025, one of the property in Ernakulam (covered
by Sale Deed No.103/2024 dated 16.01.2024) is already
taken in possession and they intend to take physical
possession of the property in Thrissur which is clearly
described in Ext.P32. As per the Commissioner's notice, a
sum of ₹32,46,00,000/- is due to respondent Nos.1 and 2.
Taking into consideration the amount due to the Bank is
more than ₹32 crores, there will be an interim order for a
period of 2 weeks from today on condition that the
petitioner remits Rs.10,00,00,000/- (Rupees ten crores
only) on or before 5 pm on 30.01.2026. If the said amount
is not remitted, the respondent bank is free to take
physical possession of the secured assets, in accordance
with law."
3. On 16.02.2026, when this writ appeal came up for
admission, an adjournment was sought on the ground that the
W.A.No.400 of 2026 10 2026:KER:27057
learned counsel for the appellants-petitioners is unable to argue
the matter due to connectivity issues. Thereafter, the learned
counsel for the appellants sought an adjournment, when the writ
appeal came up for consideration before the Division Bench on
17.02.2026. Thereafter, the matter was adjourned on
23.02.2026, 02.03.2026 and 17.03.2026, at the instance of the
learned counsel for the appellants.
4. Today, when this writ appeal is taken up for
consideration, it is pointed out by the learned counsel for the
appellants-petitioners that SLP(C)No.7581 of 2026 filed by the
appellants herein challenging the interim order dated 21.01.2026
of the learned Single Judge in I.A.No.3 of 2026 in
W.P.(C)No.42585 of 2025 (the order impugned in this writ
appeal), ended in dismissal by the order dated 23.02.2026 of the
Apex Court.
5. As already noticed hereinbefore, the prayers (a) and
(b) sought for in W.P.(C)No.42585 of 2025 is (a) a declaration
that the notification dated 29.05.2015, in unmistakable terms,
declares that the MSME-borrower has no obligation to make an
application for resolution of stress and, on the contrary, that
banks and financial institutions are duty-bound to identify
W.A.No.400 of 2026 11 2026:KER:27057
incipient stress based on the illustrative signs indicated in
Annexure-I to the RBI Circular dated 17.03.2016; and further,
that in any case where the bank has failed to identify incipient
stress, it is duty-bound to classify the account as SMA-1 if the
default is more than 31 days and as SMA-2 if the default is more
than 61 days, and thereafter shall constitute a Committee and
make a reference to that Committee for resolution of stress; and
further, that the Committee is empowered to permit recovery in
terms of Para 5(3)(iv) if the resolution of stress is not feasible;
and (b) a declaration that the judgments of the Supreme Court
in Pro Knits v. Canara Bank & Ors. [(2024) 10 SCC 292]
and Shree Shree Swami Samarth Construction v. The
Board of Directors of NKGSB Co-op Bank [2025 SCC
OnLine SC 1566] were rendered per incuriam and sub silentio
and will not bind the courts and tribunals in this country under
Article 141 of the Constitution, inasmuch as - (i) in Pro Knits
[(2024) 10 SCC 292], the Court had, contrary to the letter and
spirit of the notification, observed that if the MSME had allowed
its account to be classified as NPA and for recovery action to be
initiated, having failed to bring to the notice of the bank that it is
an MSME supported by identifiable and verifiable documents, it
W.A.No.400 of 2026 12 2026:KER:27057
cannot be allowed to "thwart" the SARFAESI action at a later
stage; and (ii) in Shree Shree Swami Samarth Construction
[2025 SCC OnLine SC 1566], the Court observed that if the
MSME had not even replied to the notice under Section 13(2)
and claimed protection as an MSME supported by an affidavit,
the recovery action cannot thereafter be challenged - which, to
repeat, are contrary to the very letter as well as the spirit of the
notification and have created a scenario where the said
judgments have been instrumental in denying the benefit of the
notification to MSMEs across the country.
6. In the order dated 23.02.2026 in SLP(C)No.7581 of
2026, the Apex Court found that prayers (a) and (b) sought for
in W.P.(C)No.42585 of 2025 are such that the same, if granted,
would be an act of gravest impropriety. The law declared by the
Apex Court, right or wrong, is binding on all courts across the
country. Although no authority is required to be cited, in the
order dated 23.02.2026, the Apex Court referred to the
decisions, inter alia, in Suganthi Suresh Kumar v.
Jagdeeshan [(2002) 2 SCC 420], Director of Settlements
v. M.R. Apparao [(2002) 4 SCC 638] and South Central
Railway Employees Cooperative Credit Society Employees
W.A.No.400 of 2026 13 2026:KER:27057
Union v. B. Yashodabai [(2015) 2 SCC 727]. Having regard
to the frame of the said writ petition, the Apex Court found that
the same is not maintainable. Since the petitioners do not also
wish to amend the writ petition, the Apex Court deemed it
proper to exercise its powers under Article 142 of the
Constitution of India and accordingly W.P.(C)No.42585 of 2025
pending before this Court was dismissed, by the order dated
23.02.2026. The said order of the Apex Court in SLP(C)No.7581
of 2026 reads thus;
"1. This special leave petition is directed against an interim
order passed by the High Court of Kerala in a pending writ
petition.
2. Prayers (a) and (b) of the writ petition filed by the
petitioners before the High Court are such that the same, if
granted, would be an act of gravest impropriety. The law
declared by this Court, right or wrong, is binding on all
courts across the country. Although no authority is
required to be cited, we may refer to the decisions of this
Court, inter alia, in Suganthi Suresh Kumar v. Jagdeeshan
[(2002) 2 SCC 420], Director of Settlements v. M.R.
Apparao [(2002) 4 SCC 638] and South Central Railway
Employees Cooperative Credit Society Employees Union v.
B. Yashodabai & Ors. [(2015) 2 SCC 727].
3. The writ petition is not maintainable in the manner it
has been presented before the High Court; hence, there is
no question of entertaining the special leave petition. The
same is dismissed.
W.A.No.400 of 2026 14 2026:KER:27057
4. Pending application(s), if any, shall stand disposed of.
5. We had granted opportunity to Mr. Nedumpara, learned
counsel for the petitioners, to go back to the High Court
and seek amendment of the writ petition. He does not
seem to be agreeable unless we interfere with the interim
order under challenge and modify the quantum of deposit
directed to be made by the High Court.
6. Having regard to the frame of the writ petition, the
same is not maintainable; and since the petitioners do not
also wish to amend the same, we deem it proper to
exercise our power under Article 142 of the Constitution of
India. The writ petition pending on the file of the High
Court also stands dismissed.
7. This order be communicated to the High Court."
(underline supplied)
7. Taking note of the order dated 23.02.2026 of the
Apex Court in SLP(C)No.7581 of 2026, the learned Single Judge,
by the judgment dated 04.03.2026, dismissed W.P.(C)No.42585
of 2025. The last paragraph of that judgment reads thus;
"The Hon'ble Apex Court exercising powers under Article
142 of the Constitution of India has dismissed the writ
petition (civil) pending before this Court. In view of the
said order passed by the Apex Court, this writ petition
stands dismissed."
8. In view of the aforesaid order dated 23.02.2026 of
the Apex Court in SLP(C)No.7581 of 2026 and the judgment
dated 04.03.2026 of the learned Single Judge in
W.A.No.400 of 2026 15 2026:KER:27057
W.P.(C)No.42585 of 2025, nothing survives in this writ appeal,
since W.P.(C)No.42585 of 2025 stands dismissed by the orders of
the Apex Court in exercise of its powers under Article 142 of the
Constitution of India.
In such circumstances, this writ appeal fails and the same
is accordingly dismissed.
Sd/-
ANIL K. NARENDRAN, JUDGE
Sd/-
MURALEE KRISHNA S., JUDGE
nak
