[Cites 18, Cited by 0]
Kerala High Court
Immaculate Agro Spices Pvt Ltd vs The Board Of Directors Of Axis Bank Ltd on 30 March, 2026
Author: Anil K. Narendran
Bench: Anil K. Narendran
2026:KER:27668
W.A.No.395 of 2026 1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE ANIL K. NARENDRAN
&
THE HONOURABLE MR. JUSTICE MURALEE KRISHNA S.
MONDAY, THE 30TH DAY OF MARCH 2026 / 9TH CHAITHRA, 1948
W.A.NO.395 OF 2026
AGAINST THE ORDER DATED 21.01.2026 IN W.P.(C)NO.42521 OF 2025 OF
THE HIGH COURT OF KERALA
APPELLANTS/PETITIONERS:
1 IMMACULATE AGRO SPICES PVT LTD.,
XIV/125, KANJIRAVELI HOUSE, PULINCHODE,
PAZHAMTHOTTAM P.O., ERNAKULAM, KERALA, REP.BY ITS
MANAGING DIRECTOR, PIN - 683565
2 JENNY VARGHESE, AGED 50 YEARS
MANAGING DIRECTOR, IMMACULATE AGRO SPICES PVT.
LTD., XIV/125, KANJIRAVELI HOUSE, PULINCHODE,
PAZHAMTHOTTAM P.O., ERNAKULAM, KERALA,
PIN - 683565
3 GEEBA JENNY, AGED 45 YEARS
DIRECTOR, IMMACULATE AGRO SPICES PVT. LTD.,
XIV/125, KANJIRAVELI HOUSE, PULINCHODE,
PAZHAMTHOTTAM P.O., ERNAKULAM, KERALA, PIN -
683565
BY ADV SMT. MARIA NEDUMPARA
RESPONDENTS/RESPONDENTS:
1 THE BOARD OF DIRECTORS OF AXIS BANK LTD.,
CORPORATE AND HEAD OFFICE,'AXIS HOUSE', 7TH
FLOOR, C-2, WADIA INTERNATIONAL CENTRE, PANDURANG
BUDHKAR MARG, WORLI, MUMBAI, PIN - 400025
2026:KER:27668
W.A.No.395 of 2026 2
2 THE AUTHORIZED OFFICER,
AXIS BANK LTD., 5TH FLOOR, CHICAGO PLAZA, RAJAJI
ROAD, KOCHI, PIN - 682035
3 THE BOARD OF DIRECTORS OF YES BANK LTD.,
YES BANK HOUSE, OFF WESTERN EXPRESSWAY,
SANTA CRUZ (EAST), MUMBAI, PIN - 400055
4 THE AUTHORIZED OFFICER,
YES BANK LTD., YES BANK HOUSE, OFF WESTERN
EXPRESSWAY, SANTA CRUZ (EAST),
MUMBAI, PIN - 400055
5 THE BOARD OF DIRECTORS OF HDFC BANK LTD,
HDFC HOUSE, SENAPATI BAPAT MARG, LOWER PAREL (W),
MUMBAI, PIN - 400013
6 THE AUTHORIZED OFFICER,
HDFC BANK LTD., 3RD FLOOR, SL PLAZA, PALARIVOTTAM
JUNCTION, KOCHI, KERALA, PIN - 682005
7 THE BOARD OF DIRECTORS OF TATA CAPITAL FINANCIAL
SERVICES LTD,
11TH FLOOR, TOWER A, PENINSULA BUSINESS PARK,
GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI, PIN -
400013
8 THE AUTHORIZED OFFICER,
TATA CAPITAL FINANCIAL SERVICES LTD., 12TH FLOOR,
TOWER A, PENINSULA BUSINESS PARK, SENAPATI BAPAT
MARG, LOWER PAREL, MUMBAI, PIN - 400013
9 THE BOARD OF DIRECTORS OF AURILIOUS FINVEST PVT
LTD, 13, BASEMENT (LGF), TAGORE GARDEN,
NEW DELHI, PIN - 110027
10 THE AUTHORIZED OFFICER,
AURILIOUS FINVEST PVT LTD., GROUND FLOOR, PLOT
NO. 88, UDYOG VIHAR, PHASE - 4,
GURUGRAM, PIN - 122015
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W.A.No.395 of 2026 3
11 THE BOARD OF DIRECTORS,
SAMUNNATI FINANCIAL INTERMEDIATION AND SERVICES
PVT LTD., BAID HITECH PARK, 129-B, 8TH FLOOR,
ECR, THIRUVANMIYUR, CHENNAI, PIN - 600041
12 THE AUTHORIZED OFFICER,
SAMUNNATI FINANCIAL INTERMEDIATION AND SERVICES
PVT LTD., BAID HITECH PARK, 129-B,8TH FLOOR, ECR,
THIRUVANMIYUR, CHENNAI, PIN - 600041
13 UNION OF INDIA,
REPRESENTED BY SECRETARY TO MINISTRY OF FINANCE,
DEPARTMENT OF FINANCIAL SERVICES, JEEVAN DEEP
BUILDING, PARLIAMENT HOUSE,
NEW DELHI, PIN - 110001
14 MINISTRY OF MSMES,
GOVERNMENT OF INDIA, REPRESENTED BY THE
SECRETARY, GOVERNMENT OF INDIA, UDHYOG BHAVAN,
NEW DELHI, PIN - 110011
15 RESERVE BANK OF INDIA,
REPRESENTED BY ITS GOVERNOR, NEW CENTRAL OFFICE
BUILDING, SHAHID BHAGAT SINGH ROAD, FORT,
MUMBAI, PIN - 400001
16 STATE OF KERALA,
REPRESENTED BY ITS CHIEF SECRETARY, GOVERNMENT
SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001
17 GISA GEORGE,
ADVOCATE, COURT COMMISSIONER APPOINTED IN CMP
10897/2025 OF CJM COURT, THRISSUR, THRISSUR BAR
ASSOCIATION, AYYANTHOLE, PIN - 680003
18 STATION HOUSE OFFICER,
PANNIYANKARA POLICE STATION,
KOZHIKODE DT, PIN - 673003
19 STATION HOUSE OFFICER,
KUNNAMKULAM POLICE STATION,
THRISSUR DT, PIN - 680503
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W.A.No.395 of 2026 4
20 STATION HOUSE OFFICER,
PANAMARAM POLICE STATION,
WAYANAD DT, PIN - 670721
21 STATION HOUSE OFFICER,
KORATTY POLICE STATION, THRISSUR DT, PIN - 680308
22 STATION HOUSE OFFICER,
RAMAMANGALAM POLICE STATION, ERNAKULAM DT,
PIN - 686663
23 THE ATTORNEY GENERAL OF INDIA,
OFFICE OF THE ATTORNEY GENERAL, 10 MOTILAL NEHRU
MARG, NEW DELHI, PIN - 110001
24 THE CHAIRMAN,
STATE BANK OF INDIA, STATE BANK BHAWAN,
NARIMAN POINT, MUMBAI, PIN - 400021
25 ANIL DHIRAJLAL AMBANI,
SEA WIND, CUFFE PARADE, MUMBAI, PIN - 400005
26 MUKESH DHIRAJLAL AMBANI,
ANTILLA, ALTAMOUNT ROAD, CUMBALLA HILL,
MUMBAI, PIN - 400036
BY ADVS.SRI. RENJITH R
SMT.ANJU MOHAN
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD 27.03.2026,
THE COURT ON 30.03.2026 DELIVERED THE FOLLOWING:
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W.A.No.395 of 2026 5
JUDGMENT
Anil K. Narendran, J.
The appellants are the petitioners in W.P.(C)No.42521 of
2025. The 1st appellant, namely, Immaculate Agro Spices Pvt. Ltd.,
is a company engaged in the trading of agricultural produce
(spices), having Ext.P1 Udyam registration certificate dated
03.10.2020 issued by the 14th respondent Ministry of Micro, Small
and Medium Enterprises. The 2nd appellant is the Managing
Director, and the 3rd appellant is the Director of the 1st appellant
company. The appellants-petitioners filed W.P.(C)No.42521 of
2025 before this Court on 12.11.2025, invoking the extraordinary
jurisdiction 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
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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 and others [(2024) 10 SCC 292] and Shree
Shree Swami Samarth Construction and another v.
The Board of Directors of NKGSB Co-op Bank & others
[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, 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,
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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 they are entitled to seek
in the very same proceedings the Bank has instituted
against them;
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
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
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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
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
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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;
m) pass such further and other orders as the nature and
circumstances of the case may require."
2. The interim relief sought for in W.P.(C)No.42521 of
2025 is an ad-interim injunction restraining and prohibiting the
respondent Bank, its agents, and servants from proceeding any
further in pursuance of the actions initiated under the SARFAESI
Act, the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act),
or any other law in force, and in particular, from acting upon
Ext.P24 notice dated 04.11.2025 issued by the Advocate
Commissioner to take physical possession of the properties.
3. On 14.11.2025, when W.P.(C)No.42521 of 2025 came
up for admission, respondents 1 and 2 entered appearance
through counsel. The 6th respondent also entered appearance
through counsel. Notice was ordered to other respondents, who
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have not yet been served with a copy of the writ petition, except
respondents 17, 23, 24, 25 and 26. By way of an interim order
dated 14.11.2025, the learned Single Judge ordered that the
taking of physical possession pursuant to Ext.P24 notice dated
04.11.2025 of the Advocate Commissioner shall stand deferred for
a period of two weeks. On 28.11.2025, the interim order was
extended by two weeks, and the writ petition was ordered to be
listed on 04.12.2025, along with connected matters.
4. In W.P.(C)No.42521 of 2025, the 8th respondent -
Authorised Officer has filed a counter affidavit dated 03.12.2025,
on behalf of the 7th respondent - Board of Directors of Tata Capital
Financial Services Ltd., opposing the reliefs sought for. In the
counter affidavit, a preliminary objection on the maintainability of
W.P.(C)No.42521 of 2025 is raised, wherein it is stated that Tata
Capital Financial Services Ltd. is a Non-Banking Financial
Company (NBFC), registered under Section 45-IA of the Reserve
Bank of India Act, 1934, and not a Scheduled Commercial Bank.
In the counter affidavit, it is contended, inter alia, that the
Framework for Revival and Rehabilitation of Micro, Small and
Medium Enterprises, which was notified by the Ministry of Micro,
Small and Medium Enterprises, Government of India, vide Ext.P10
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notification No.S.O.1432(E) dated 29.05.2015, and Ext.P11
circular FIDD.MSME & NFS.BC.No.21/06.02.31/2015-16 dated
17.03.2016 issued by the 15th respondent - Reserve Bank of India,
enclosing therewith the Framework for Revival and Rehabilitation
of Micro, Small and Medium Enterprises, notified by the Ministry
of Micro, Small and Medium Enterprises vide Ext.P10 notification
dated 29.05.2015, applies only to Scheduled Commercial Banks.
Ext.R8(a) - Second Schedule to the Reserve Bank of India Act,
1934, would show that Tata Capital Financial Services Ltd. does
not fall within the category of a Scheduled Bank.
5. On 24.12.2025, along with I.A.No.2 of 2025 filed in
W.P.(C)No.42521 of 2025, respondents 7 and 8 produced
Ext.R8(b) - reply FIDD.CO.RIA.No.S1632/01.10.068/2025-26
dated 23.12.2025 issued by the Central Public Information Officer
of the Reserve Bank of India, regarding the Framework for Revival
and Rehabilitation of Micro, Small and Medium Enterprises issued
by the Reserve Bank of India, issued vide Ext.P11 circular FIDD.
MSME & NFS.BC.No.21/06.02.31/2015-16 dated 17.03.2016. In
the Annexure to Ext.R8(b) reply dated 23.12.2025, it is stated
that the framework issued under circular FIDD.MSME & NFS.BC.
No.21/06.02.31/2015-16 dated 17.03.2016, on 'Framework for
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Revival and Rehabilitation of Micro, Small and Medium Enterprises
(MSMEs)' is not applicable to Non-Banking Financial Companies
(NBFCs).
6. On 17.12.2025, the interim order granted in W.P.(C)No.
42521 of 2025 was revived and extended till 16.01.2026, and
thereafter, on 16.01.2026, the interim order was extended till
21.01.2026.
7. On 21.01.2026, when W.P.(C)No.42521 of 2025 came
up for consideration, the learned counsel for respondents 7 and 8
submitted that the said respondents had already filed a counter
affidavit raising the question of maintainability of the writ petition.
Since the interim order originally granted on 14.11.2025 was
unconditional, and more than Rs.3,50,00,000/- crores is due to
the respondents 7 and 8, the learned Single Judge, by the
impugned order dated 21.01.2026, modified the interim order
originally granted on 14.11.2025, and extended the same by two
weeks from 21.01.2026, on condition that the petitioners shall
remit Rs.1,00,00,000/- on or before 30.01.2026. In the order
dated 21.01.2026, the learned Single Judge made it clear that, if
the said amount is not remitted, respondents 7 and 8 are free to
take physical possession of the secured assets, in accordance with
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law. The impugned order dated 21.01.2026 of the learned Single
Judge reads thus;
"The writ petition is filed for a declaration that the
notification dated 29.05.2015 declares that MSME borrower
has no obligation to make an application for resolution of
stress and, on the contrary, banks and financial institutions
are duty-bound to identify incipient stress and also to
declare that the judgment of the Hon'ble Supreme court in
Pro Knits v. Canara Bank and others [(2024) 10 SCC
292] and Shree Shree Swami Samarth Construction
and another v. The Board of Directors of NKGSB Co-
op. Bank and others [(2025 KHC Online 6647)] were
rendered per incuriam and sub silentio and will not bind the
courts and tribunals in this country under Article 141 of the
Constitution of India. Along with these two prayers, various
other prayers are also sought to quash all the proceedings
initiated under the SARFAESI Act.
2. Ext.P23 is a notice issued under Section 13(2) of the
SARFAESI Act to the petitioners. The total amount due as
on 16.05.2025 is ₹3,50,19,621.90. Taking forward the
proceedings, the respondent bank [sic: respondents 7 and
8] approached the CJM, Thrissur, by filing C.M.P.No.10897
of 2025, wherein an Advocate Commissioner was appointed
to take physical possession of the secured assets, and he
has issued Ext.P24 notice to take physical possession of the
secured assets measuring 30.37 Ares in Sy.No.571/4-10 of
Muringoor Thekkummuri Village, Chalakkudy Taluk,
obtained as per Sale Deed No.2660 of 2023 of Chalakkudy
SRO, belonging to the 2nd petitioner. On 14.11.2025, while
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issuing notice to the respondents, taking of physical
possession pursuant to Ext.P24 was deferred for a period of
2 weeks without any condition. Thereafter, the order was
extended on 28.11.2025 by two weeks. On 17.12.2025, the
interim order was revived and extended till next posting and
posted to 16.01.2026.
3. Counsel for the 7th respondent, on behalf of the 8th
respondent, submits that they have already filed a counter
affidavit raising the question of maintainability of the writ
petition. Since the 1st interim order dated 14.11.2025 was
an unconditional order, and more than ₹3.50 crores is due
to the respondent bank [sic: respondents 7 and 8], the
interim order granted on 14.11.2025 is modified and
extended by two weeks from today, on condition that the
petitioners remit Rs.1,00,00,000/- (Rupees one crores only)
on or before 30.01.2026. If the said amount is not remitted,
the respondent bank [sic: respondents 7 and 8] is free to
take physical possession of the secured assets, in
accordance with law."
8. The appellants-petitioners have filed this writ appeal,
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 W.P.(C)No.42521 of 2025.
9. On 16.02.2026, when this writ appeal came up for
admission, an adjournment was sought on the ground that the
learned counsel for the appellants-petitioners is unable to argue
the matter due to connectivity issues. On 17.02.2026, the learned
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counsel for the appellants again sought an adjournment.
Thereafter, at the instance of the learned counsel for the
appellants, the matter was adjourned on 23.02.2026, 02.03.2026,
and 17.03.2026. During the pendency of this writ appeal, the
appellants filed SLP(C)No.6379 of 2026 before the Apex Court,
challenging the interim order dated 21.01.2026 of the learned
Single Judge in W.P.(C)No.42521 of 2025, invoking the provisions
under Article 136 of the Constitution of India, which was dismissed
by the order dated 13.02.2026. The said order reads thus;
"We are not inclined to interfere with the impugned interim
order passed by the High Court; hence, the special leave
petition is dismissed.
Pending application(s), if any, shall stand disposed of."
10. On 27.03.2026, when this writ appeal came up for
consideration, we heard arguments of the learned counsel for the
appellants-petitioners and the learned counsel for respondents 6
and 7, and the matter was reserved for judgment.
11. The learned counsel for the appellant-petitioner argued
that the judgments of the Apex Court in Pro Knits [(2024) 10
SCC 292] and Shree Shree Swami Samarth Construction
[2025 SCC OnLine SC 1566] were rendered per incuriam and
sub silentio and will not bind the courts and tribunals in the
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country under Article 141 of the Constitution. In Pro Knits
[(2024) 10 SCC 292] the Apex Court had, contrary to the letter
and spirit of Ext.P10 notification dated 29.05.2015, observed that
if the Micro, Small and Medium Enterprise (MSME) had allowed its
account to be classified as Non-Performing Asset (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; similarly, in Shree Shree Swami
Samarth [2025 SCC OnLine SC 1566], the Apex Court had,
contrary to the letter and spirit of Ext.P10 notification dated
29.05.2015, observed that if the MSME had not even replied to
the notice under Section 13(2) of the SARFAESI Act and claimed
protection as an MSME supported by an affidavit, the recovery
action cannot thereafter be challenged. In support of the said
contention, the learned counsel referred to various provisions
under the Framework for Revival and Rehabilitation of Micro, Small
and Medium Enterprises, notified vide Ext.P10 notification dated
29.05.2015 and Ext.P11 Reserve Bank of India circular dated
17.03.2016. The contentions raised by the petitioners in that
regard were not properly appreciated by the learned Single Judge
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while passing the impugned order dated 21.01.2026 in
W.P.(C)No.42521 of 2025. The learned Single Judge failed to
notice that the law laid down in the judgments referred to supra
has no application to the facts and circumstances of the case at
hand. Placing reliance on the decision of the Apex Court in
Kunhayammed v. State of Kerala [(2000) 6 SCC 359], the
learned counsel contended that, since the dismissal of
SLP(C)No.6379 of 2026 by the Apex Court, by the order dated
13.02.2026, is by a non-speaking order, which does not assign
reasons for dismissing the special leave petition, it would neither
attract the doctrine of merger so as to stand substituted in place
of the order put in issue before it nor would it be a declaration of
law by the Apex Court under Article 141 of the Constitution of
India, for there is no law which has been declared.
12. The learned counsel for respondents 7 and 8 contended
that in the counter affidavit dated 03.12.2025 filed in
W.P.(C)No.42521 of 2025, the said respondents have raised a
preliminary objection on the maintainability of the said writ
petition. Tata Capital Financial Services Ltd. is a Non-Banking
Financial Company (NBFC), registered under Section 45-IA of the
Reserve Bank of India Act, 1934, which is not a Scheduled
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Commercial Bank. The Framework for Revival and Rehabilitation
of Micro, Small and Medium Enterprises, which was notified by the
Ministry of Micro, Small and Medium Enterprises, Government of
India, vide Ext.P10 notification and Ext.P11 circular dated
17.03.2016, applies only to Scheduled Commercial Banks. In the
Annexure to Ext.R8(b) reply dated 23.12.2025, produced along
with I.A.No.2 of 2025 filed in W.P.(C)No.42521 of 2025, it is stated
that the framework issued under Ext.P11 circular dated
17.03.2016 does not apply to Non-Banking Financial Companies
(NBFCs). The contentions raised by the learned counsel for the
appellants-petitioners are absolutely untenable, and no
interference is warranted on the interim order dated 21.01.2026
of the learned Single Judge in W.P.(C)No.42521 of 2025.
13. On the argument of the learned counsel for the
appellant-petitioner that the judgments of the Apex Court in Pro
Knits [(2024) 10 SCC 292] and Shree Shree Swami Samarth
Construction [2025 SCC OnLine SC 1566] were rendered per
incuriam and sub silentio and will not bind the courts and tribunals
in the country under Article 141 of the Constitution, we notice the
order of the Apex Court dated 23.02.2026 in SLP(C)No.7581 of
2026 - M/s.Kan Agro Spices and others v. The Board of
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Directors of RBL Bank Ltd. and others - which was one filed
by the petitioners in W.P.(C)No.42585 of 2025, invoking the
provisions under Article 136 of the Constitution of India,
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.
14. SLP(C)No.7581 of 2026 was filed before the Apex Court
during the pendency of W.A.No.400 of 2026 filed by the petitioners
therein before this Court, invoking the provisions under Section
5(i) of the Kerala High Court Act, 1958, challenging the very same
interim order of the learned Single Judge dated 21.01.2026. The
said writ appeal, i.e., W.A.No.400 of 2026, was listed before this
Court, along with the present writ appeal, i.e., W.A.No.395 of
2026, on 16.02.2026, 17.02.2026, 23.02.2026, 02.03.2026,
17.03.2026 and 26.03.2026.
15. SLP(C)No.7581 of 2026 was dismissed by the order of
the Apex Court dated 23.02.2026. In the said order, 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. By the said order, the Apex
Court dismissed W.P.(C)No.42585 of 2025, which was pending
before this Court, in exercise of its powers under Article 142 of the
2026:KER:27668
Constitution of India. 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. Therefore, by the judgment dated
26.03.2026 - M/s.Kan Agro Spices and others v. The Board
of Directors of RBL Bank Ltd. and others [2026:KER: 27057]
- this Court dismissed W.A.No.400 of 2026. Paragraphs 4 to 8 and
also the last paragraph of the judgment dated 26.03.2026 in
W.A.No.400 of 2026 read thus;
"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 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
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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 [(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 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
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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 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,
2026:KER:27668
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 and others
[(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.
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
2026:KER:27668
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.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."
16. In the case at hand, the declaratory reliefs (a) and (b)
sought for in W.P.(C)No.42521 of 2025, which we have extracted
hereinbefore at the first paragraph (pages 5 and 6), are the very
same reliefs sought for in W.P.(C)No.42585 of 2025 as declaratory
reliefs (a) and (b), which we have extracted in paragraph 5 of the
judgment dated 26.03.2026 in W.A.No.400 of 2026 (quoted
hereinbefore at paragraph 15, page Nos.20-22). While dismissing
SLP(C)No.7581 of 2026 filed 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 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. In the
said order it was made clear that the law declared by the Apex
2026:KER:27668
Court, right or wrong, is binding on all courts across the country.
In the order dated 23.02.2026, the Apex Court referred to the
decisions in Suganthi Suresh Kumar [(2002) 2 SCC 420],
M.R. Apparao [(2002) 4 SCC 638] and B. Yashodabai
[(2015) 2 SCC 727]. In the above circumstances, we find
absolutely no merit in the argument of the learned counsel for the
appellants-petitioners that the judgments of the Apex Court in
Pro Knits [(2024) 10 SCC 292] and Shree Shree Swami
Samarth Construction [2025 SCC OnLine SC 1566] were
rendered per incuriam and sub silentio and will not bind the courts
and tribunals in the country under Article 141 of the Constitution.
17. As already noticed hereinbefore, in the counter
affidavit dated 03.12.2025 filed in W.P.(C)No.42521 of 2025,
respondents 7 and 8 have raised a preliminary objection on the
maintainability of the said writ petition. It is not in dispute that
Tata Capital Financial Services Ltd. is a Non-Banking Financial
Company (NBFC), registered under Section 45-IA of the Reserve
Bank of India Act, which is not a Scheduled Commercial Bank. The
said fact is evident from Ext.R8(a) Second Schedule to the
Reserve Bank of India Act. The specific stand taken in the counter
affidavit dated 03.12.2025 filed by respondents 7 and 8 in
2026:KER:27668
W.P.(C)No.42521 of 2025 is that the Framework for Revival and
Rehabilitation of Micro, Small and Medium Enterprises, which was
notified by the Ministry of Micro, Small and Medium Enterprises,
Government of India, vide Ext.P10 notification and Ext.P11
Reserve Bank of India circular dated 17.03.2016, applies only to
Scheduled Commercial Banks. In support of the said contention,
respondents 7 and 8 have produced Ext.R8(b) reply dated
23.12.2025 issued by the Central Public Information Officer of the
Reserve Bank of India, along with I.A.No.2 of 2025 filed in
W.P.(C)No.42521 of 2025, wherein it is stated that the framework
issued under Ext.P11 circular dated 17.03.2016 is not applicable
to Non-Banking Financial Companies (NBFCs). The contentions
raised in the counter affidavit dated 03.12.2025 filed by
respondents 7 and 8 on the maintainability of the writ petition and
also the applicability of the framework issued under Ext.P11
circular dated 17.03.2016 in the case of an NBFC is yet to be
considered by the learned Single Judge. In the above
circumstances, we find that the contentions raised by the learned
counsel for the appellants-petitioners with reference to various
provisions under the Framework for Revival and Rehabilitation of
Micro, Small and Medium Enterprises, notified vide Ext.P10
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notification dated 29.05.2015 and that contained in Ext.P11
Reserve Bank of India circular dated 17.03.2016, and also the
contention raised by the learned counsel for respondents 7 and 8
on the applicability of the said framework in the case of an NBFC
are matters which have to be raised before the learned Single
Judge in the pending writ petition.
18. In view of the aforesaid findings at paragraphs 16 and
17, it is unnecessary for this Court to consider the effect of the
dismissal of SLP(C)No.6379 of 2026 by the order of the Apex
Court dated 13.02.2026, which ended in dismissal during the
pendency of this writ appeal.
In the above circumstances, we find absolutely no merit in
this writ appeal. The writ appeal fails, and the same is accordingly
dismissed.
Sd/-
ANIL K. NARENDRAN, JUDGE
Sd/-
MURALEE KRISHNA S., JUDGE
AV
