IN THE HIGH COURT AT CALCUTTA CIVIL APPELLATE JURISDICTION ORIGINAL SIDE Present: The Hon’ble Justice Shampa Sarkar And The Hon’ble Justice Arjun Ray Mukherjee APOT/166/2026 IA NO: GA/1/2026 DEBPARA TEA COMPANY LIMITED AND ORS. VS STATE BANK OF INDIA AND ANR. For the appellants :Mr. SagarBandopadhyay, Sr. Adv. Mr. AbhidiptoTarafder. Adv. Mr. Deepankar Thakur, Adv. Mr. Niladri Banerjee, Adv. For the respondents :Mr. AnirbanPramanick, Adv. Ms. BhagyasreeDey, Adv. Heard on : 14.09.2026 Judgment pronounced on : 14.09.2026 Dictated by Shampa Sarkar, J.:- 1. The appeal arises out of a judgment and order dated September 2, 2026, passed by a learned single Judge in WPO No. 198 of 2026. The writ petition was dismissed by His Lordship, inter alia, on various grounds. First of such ground being delay in approaching the writ 2 court. The other ground was pendency of a proceeding under Section 17 of the SARFAESI Act against the bank, which had been initiated by the appellants before the Debt Recovery Tribunal Siligurivide SA number 193 of 2024. According to His Lordship, the prayer of the appellants for being consideredunder the Framework for the Revival and Rehabilitation of the MSMEs (hereinafter referred to as the said Framework), could not be permitted after the said SARFAESI proceedings were well underway. The relevant portions of the order of His Lordship are quoted below:- “16. In the present case, the account of the petitioner no. 1 declared as NPA on 29th December, 2023, and the same was informed to the petitioners on 2nd January, 2024. On 15th January, 2024, the bank has issued notice to the petitioners under Section 13(2) of the SARFAESI Act. The petitioners have sent a reply to the said notice but the petitioners have not informed the bank or not requested the bank for the benefit under the Framework for Revival and Rehabilitation of the MSMEs. 17. The petitioners have submitted further representation on 15th July, 2024 and in the said representation also the petitioners have not prayed for any benefit under the said framework. The bank has issued notice under Section 13(4) of the SARFAESI Act read with Rule 8 of the Security Interest (Enforcement) Rules, 2002 and after receipt of the said notice, the petitioners have initiated a proceeding before the Debt Recovery Tribunal under Section 17 of the SARFAESI Act against the bank and the same is pending for adjudication. 18. Subsequently, the petitioners have made representations, only requesting for extend the benefit of MSMEs but the petitioners have not voluntarily initiated the proceedings under the Framework for Revival and Rehabilitation of the MSMEs by filing an application along with affidavit of an authorized process. In the case of Shri Shri Swami Samarth Construction and Finance Solution (supra), the Hon’ble Supreme Court by considering the case of Pro Knits (supra), held that the petitioning enterprise does not seem to have ever claimed the benefit of the terms of the framework after the demand notice under Section 13(2) of the SARFAESI Act was issued. 19. In the present case, the account of the petitioner no. 1 was declared as NPA in the month of December, 2023, the same was 3 informed to the petitioners in the month of January, 2024 and on the same month, the notice under Section 13(2) of the SARFAESI Act was issued. The petitioners have submitted reply to the said notice but the petitioners have not requested for benefit of the framework and in reply to the notice, the bank has again issued notice to the petitioners and subsequently, the bank has issued notice under Section 13(4) of the SARFAESI Act and on receipt of the said notice, the petitioners have initiated a case under Section 17 of the SARFAESI Act against the bank before the Debt Recovery Tribunal, Silirguri, being S.A. No. 193 of 2024 and the same is pending for adjudication. 20. Considering the above, this Court finds that only after issuance of notice under Section 13(4) of the SARFAESI Act, the petitioners have filed the present writ petition praying for the benefit under the Framework for Revival and Rehabilitation of the MSMEs but this Court finds that the petitioners have not taken appropriate steps for getting the benefit of the said Framework for Revival and Rehabilitation of the MSMEs of the appropriate stage and on the other hand, the petitioners have taken the recourse of Section 17 of the SARFAESI Act by initiating a proceeding against the bank before the Learned Tribunal. Once the petitioners have invoked the provisions of Section 17 of SARFAESI Act, the grievance of the petitioners cannot be decided in the writ proceeding. 21. In view of the above, this Court did not find that the petitioners are entitled to get the benefit of Framework for Revival and Rehabilitation of the MSMEs at the later stage when the bank has also issued notice under Section 13(4) of the SARFAESI Act and the petitioners have also initiated a proceeding under Section 17 of the SARFAESI Act against the bank before the Tribunal. 22. WPO No. 198 of 2026 is dismissed.” 2. Mr. Bandhopadhyaylearned senior Advocate for the appellants submits that His Lordship committed an error of jurisdiction, inter alia,for the following reasons: - (a) The bank was fully aware that the loan facility had been extended by the SME branch of the SBI, Siliguri to the appellant No.1 which is a Micro, Small and Medium Enterprise. The Framework with regard to restructuring and regularization of the credit facility availed of by the appellants, before declaration of the loan accounts 4 of the appellants as non-performing assets (in short NPA), was not followed by the bank. The bank straight away proceeded under the SARFAESI Act.His Lordship did not apply his judicial mind to such facts. His Lordship failed to appreciate that the notification of the Ministry of Micro, Small and Medium Enterprises dated May 29, 2015, was mandatory in nature and the bank was under an obligation to identify the loan accounts of the appellants and sub- categorize them into SMA-0, SMA-1 and SMA-2.The bank was then required to refer the matter to the Committee for restructurization and regularization. (b) His Lordship failed to direct the bank to set up theCommittee for aCorrective Action Plan (CAP).Upon identification of the incipient stress and sub-categorization of those accounts. The bank was supposed to refer the matter to the Committee, the notification of the RBI dated March 17, 2016 was a complete Framework for revival and rehabilitation of Micro, Small and Medium Enterprises (MSMEs). The same was issued in addition to the notification of the Ministry and the notification mandated an obligation on the part of the bank to identify incipient stress in the loan accounts of the MSMEs. Three sub-categories under the Special Mention Account (SMA)were to be created and referred to the Committee within five working days, for a suitable CAP. The borrower could also voluntarily apply to the bank by requesting restructurization and/or regularization under the said Framework, but such 5 provision did not take away the obligation of the lender to follow the mandates of the Reserve Bank of India. (c) The appellants were not informed as to whether, after the sub- categorization of its accounts as SMA-2, the bank had at all referred the matter to the Committee or not. Thus, the learned single Judge failed to appreciate the decisions of the Hon’ble Apex Court in the matter of Pro Knits vs Board of Directors of Canara Bank and Ors. reported in (2024) 10 SCC 292 and Shri Shri Swami Samarth Construction and Finance Solution and Anr. Vs Board of Directors of NKGSB Co-op. bank ltd. And Ors. reported in (2025) SCC Online SC 1566,in their correct perspectives. (d) Before dismissal of the writ petition, His Lordship should have called upon the bank to establish before the court that the obligations under the Framework of the RBI, had been complied with. Instead, His Lordship dismissed the writ petition, inter alia, on the ground that after the proceedings had reached the stage of issuance of notice under Section 13(4) of the SARFAESI Act and an application had been filed therefrom under Section 17 of the SARFAESI Act, nothing remained to be decided in the writ petition. His Lordship erred in holding that the Framework would not be applicable in case of the appellants, by misreading the notification of the RBI. (e) The answer to the notice under Section 13(2) of the SARFAESI Act issued by the appellants had not been considered by His Lordship 6 at all. The contentions of the appellants had been overlooked by His Lordship. (f) Clauses 4.2 of the Framework of 2016 specifically provided that, after the bank forwarded the matter to the Committee upon identification of incipient stress and sub-categorization of the said loan accounts, the Committee was under an obligation to consider the reference made by the bank in terms of clause 4.2 to 5.2 of the 2016 Framework. 3. Mr. Bandopadhyay prayed that the order impugned should be set aside and referred to the bank for compliance of the Framework of the RBI, in its letter and spirit. 4. Mr. Pramanick, learned Advocate for the bank, submits that the bank had proceeded in accordance with law.He refers to a letter dated January 2, 2024, by which the Relationship Manager, SME branch, Siliguri, had informed the appellants about the irregularity in respect of all the loan accounts, as detected on January 1, 2024. The appellant was asked to save the account from turning into NPA,by payment of a sum of Rs. 1,08,96,500/-. 5. He next submits that, pursuant to the demand notice and the declaration of the loan accounts as NPA, the appellants had requested for further amounts of money to be sanctioned in their favour, so that they could pay off the dues of the workers and operationalise the tea garden. The appellants had never indicated to the bank that they were inclined to be considered in terms of the Framework of the RBI. The appellants, in fact, suggested regularisation by making various 7 proposals.The issues involved could also be decided by the Learned Tribunal. He submits that the Hon’bleApex Court had categorically stated that the borrower was also under an obligation to approach the bank for consideration as per the Framework. The notification of the Ministry mandated that the borrower must file an application for initiation of proceedings under the Framework and such application must be verified by an affidavit of an authorised person.In this case, no such approach was made by the borrower in terms of clause 2, 3 and 4of the notification dated May 29, 2015. According to Mr. Pramanick, the RBI circular was supplementary to the notification of the Ministry and the provisions of the notification dated May 29, 2015, were not superseded by the RBI notification of 2016. 6. Heard the parties. The issue before us is whether the writ court could have granted the reliefs prayed for in the facts and circumstances of the case. 7. The prayers in the writ petition are quoted below:- “(a) Declaration that respondents have not discharged their obligations under the Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises (MSMEs) dated 17th March, 2016 before declaring the petitioner No.1’s account as NPA, and consequently the declaration of NPA is null and void; (b) A writ of and/or in the nature of Mandamus do issue commanding the respondents to immediately rescind the NPA declaration of the petitioner No. 1’s bank account under the Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises dated 17th March 2016; (c) A writ in the nature of Mandamus do issue commanding the respondents to take steps as is mandatory under the Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises dated 17th March, 2016 and more 8 particularly those stipulated in paras 2.1, 4, 4.8 and 5.1 and 5.3(a) to (c) thereof;” 8. We agree with Mr. Bandopadhyay to the extent that, before a loan account of an MSME becomes an NPA, the bank or the creditor is required to identify the incipient stress and sub-categorise the same into three specific sub-categories. We find that the loan account was identified and sub-categorised as SMA-2. The bank had approached the appellants after such sub-categorisation and had asked the appellants to regularise the accounts before the same slipped into NPA. The letter dated January 2, 2024, is significant. We find it apposite to quote the contents thereof, for proper appreciation of our opinion. “Letter No. BR/ADV/2023-24/774 Date-02.01.2024 To, The Directors Debpara Tea Company Limited Rasiklal Ghosh Sarani, Sevoke Road, Siliguri, Pin- 734001 Dear Sir, ADVANCE: SME NPA MANAGEMENT With reference to above captioned matter, the accounts of Debpara Tea Company Limited has turned into NPA (Non- Performing Assets) on 29.12.2023. The details of the account along with the irregularity amount required for pulling the accounts out of NPA as on 01.01.2024 are as follows: Sl. Account No. Facility Limit Irregularity (As on 01.01.2024) IRAC Status 1 39726967 226 Cash Credit ₹.5,85,00,0 00.00 ₹.37,52,000.0 0 4 2 39959662 401 Cast Credit ₹.5,00,000. 00 ₹.4,500.00 4 9 3 39727411 134 GECL ₹.29,65,44 8.00 ₹.8,50,000.00 4 4 39727412 897 Term Loan ₹.31,30,33 8.00 ₹.1,60,000.00 4 5 39727401 114 Term Loan ₹.75,53,90 1.00 ₹.4,90,000.00 4 6 39727413 969 Term Loan ₹.3,86,00,0 00.00 ₹.42,50,000.0 0 4 7 40558632 721 GECL Ext. ₹.1,63,92,7 27.00 ₹.13,90,000.0 0 4 ₹.1,08,96,500. 00 2. As the above mentioned accounts are running irregular since more than 90 days and not only adversely effecting your CIBIL score but also captured in CRILC data (monitored by RBI for large value accounts). As the immediate regularization of account is our top priority, we have visited your office and discussion regarding the same was held on 22.12.2023 with officials from our RBO, Branch Head along with RMSME. 3. On 28.12.2023, we again visited your office and advised for depositing the irregular amount to save the account from turning into NPA. However, you were not able to repay the obligations and the account finally turned into NPA on 29.12.2023. 4. In the view of the above mentioned matter, you again requested to make necessary arrangement of fund (Total ₹.1,08,96,500/-) to regularize the account. 5. You may kindly contact the undersigned for any further clarifications in this matter. Yours’ faithfully Relationship Manager SME Branch Siliguri” 9. It is apparent that the appellants did not take any step upon receipt of the letter dated 2ndJanuary 2024 to regularise the account. From the letter we find that, as the accounts were running irregularly for more than 90 days and the same had affected the CIBIL score, as was also captured in the CRILC data monitored by the RBI, immediate regularization of the accounts was taken up as a top priority of the 10 bank. The letter indicates that meetings were held at the office of the appellant and the bank visited the office on December 22, 2023 and December 28, 2023. The bank also advised the appellants to deposit the amounts. Thus the sub-categorisation of the accounts as SMA-2 is not in dispute. It is not the case of the appellants that they were not aware of such sub-categorisation. On the other hand, the appellants allege that after the sub-categorisation, the bank was under an obligation to refer to the matter to the Committee for a CAP. The failure to do sovitiated the notices under Sections 13(2), 13(4), and also the possession notice, which were issued under the provisions of theSARFAESI Act. 10. To deal with the contentions of Mr. Bandopadhyay, we deem it fit to refer to some of the documents which indicate that the appellants had been apprised of the fact that the bank had identified the incipient stress and sub-categorised the same. Meetings in this regard were held. The appellants did not make any request for being considered under the Framework. In the reply to the notice issued under Section 13(2) of the SARFAESI Act, the appellants informed that bank that the bank should have consideredregularisation of the accounts as per the RBI guidelines. By a letter dated January 15, 2024, a learned Advocatefor the bank issueddemand notice upon declaration of the account as an NPA.A composite reply was filed by the appellants to the letter dated January 2, 2024, and letter dated January 15, 2024. 11 11. From the said reply, we find that the appellant had admitted the financial crisis, inter alia, stating that thetea garden was not in a position to operate due to suspension of work. Instead of regularising the account upon payment even after the sub-categorisation of the same as SMA-2, the appellant approached the bank for further disbursement of an ad-hoc amount of Rs 1 crore. Such money had been requested earlier, by a letter dated October 17, 2023. The money was required in order to make payments of the bonus and other dues of the workers before the Durga Puja. 12. The relevant portions of the said letter are quoted below. “4.We further state that we had requested the bank for Adhoc funds of Rs. 1 Crore vide our letter dated 17th October, 2023 for making the payments of bonus & other dues to the workers before Durga puja, and it was specifically mentioned that tea plantation is a labour intensive industry and failure to disburse bonus on time will result in labour unrest leading to closure of the unit. *** *** 8.We state that this crisis led to severe shortage of funds and non-operation of factory and further losses for the company. Also nonpayment of certain dues to workmen leading to agitation and total collapse of work at the tea estate. This was informed and elaborated to you vide our letter dated 26th December, 2023. 9.We state that several other promises were made by the bank such as FCNR conversion of the account for the saving and/or reduction in the interest rates. Secondly, the reduction in interest rates spread based on ratings were not given effect in spite of discussions and assurances and were unilaterally imposed. These promises were never taken into consideration inspite of our repeated requests. 10.We were shocked to know that excess interest to the tune of Rs. 10,77,708/- was charged by the bank. We have requested to reverse the same vide our email dated 10th September, 2023. We had clearly stated in our letter "Such high interest on an industry with stress is pushing the unit further into closure and downgrading of the asset" The same was ignored by the bank and no reply or reversal was provided to us. Any interest, even if 12 penal in nature, cannot jeopardise the working of any business, resulting in closure of the unit and resulting is distress resulting in complete slippage of the account to non performing. 11.We state that to revive the tea estate we had undertaken several developments works of plantation and installation of new irrigation equipment as per the tea boards scheme guidelines from time to time.However in spite of completion of all works on time and making claims with the tea board for the due subsidies as per procedure within due time and norms, the receipt of subsidy to the tune of RS. 3.08 Crores is still pending leading to severe financial crisis for the Company. 12.It is pertinent to state that the tea estate employs several thousand workers and their families are dependent upon the tea estates and any action or repercussions taken against the interest of the workers shall directly affect several thousand workers and their families and result in a law & order situation.” 13. From the tenor of the aforementioned letter, it is clear that the appellants were looking for more financial support from the bank, rather than trying for a restructurization in terms of the Framework of the RBI. We refer to the letter dated May 17, 2024, issued by the appellants, as a reply to the notice under Section 13(2) of the Act, which Mr. Bandopadhyay has laid great emphasis on. We quote paragraph 18 and 19, thereof, as hereunder :- “18.Subsequent to the aforementioned events, the bank bank, despite being urged to facilitate the us in regularizing the business and restoring the tea garden to a suitable and operational state following the unrest, declared the loan accounts for the credit facility as Non-Performing Asset (NPA) as on 29.12.2023 on grounds of purported irregularities. It is imperative to emphasize that I did not receive any prior reminders regarding the regularization of the loan accounts before they were classified under the Special Mention Account (SMA) category and/or designated as Non-Performing Assets (NAs), as mandated by the Reserve Bank of India. The bank thereby imposed the onus of recovering a substantial sum amounting to Rs. 13,24,91,937 - (Rupees Thirteen Crores Twenty-Four Lakhs Ninety-One Thousand Nine Hundred Thirty- Seven) only from us, as communicated through your legal counsel in a letter dated 15.01.2024. 19. It is essential to highlight that the absence of prior classification into the Special Mention Account (SMA) category and subsequent designation as Non-PerformingAssets precedes 13 the issuance of this immediate illegal demand notice purportedly under section 13(2) of the SARFAESI Act, 2002. The notice encompasses an exorbitant outstanding balance in the loan accounts, deliberately inflated to an unreasonable extent due to the Bank's deliberate negligence and perplexing conduct. I assert my exemption from payment of the aforementioned amount, attributing the quandary solely to the actions of the State Bank of India.” 14. It is true that the appellants informed the bank that, prior to classification of the accounts as NPA,the bank should have sub- categorized the account. We find that, the notice under section 13(2) of the SARFAESI Act was disputed, inter alia, on the ground that the claimswere exorbitant and inflated.Again, the appellants emphasized the problems faced by the tea industry since COVID and the financial stress which the industry was facing. In fact, the appellants held the bank responsible for the financial crisis faced by the tea garden, almost accusing the bank for not providing the adhoc fund of Rs.1 crore. The appellants reiterated that, for non-action of the bank to advance such amount, bonus and other dues of the workers could not be paid.The appellants held the bank responsible for not disbursing a sum of Rs. 80 lakhs, although the same had been assured by the bank. In paragraph 24 of the said letter, the appellants admitted that the discussions as requested were held. Alleged anomalies in the notice were pointed out by the appellant with regard to the excess interest that was charged and the promises which the bank had not kept, including the promise to convert the account as Foreign Currency Non-Resident(FCNR).Paragraph 65& 66 of the said letter are significant and the same are quoted below. 14 “65. However, inspite of all the above, the firm shall work out a plan and program for revival of the unit as adviced under your letter no. SAMB-I/05 dated 3.4.24, and shall discuss the same with the Bank, being one of our key stakeholders, so that business can be revived and payments of dues to all creditors can be made. However, for this exercise to be designed, implemented and results to be seen, will need some time and all have to support to tide over this crisis. In this direction we have even met and discussed the matter with the AGM (SME) on several occasion after this episode, and once a credible and concrete plan is ready, in a short time from now, we shall share the same with the Branch, for needful evaluation. 66. We are exploring all possibilities including upgradation of the account after reversal of excess debits and wrongful charges, and / or repayment of legitimate dues, if any, to clear the debts. But all this requires your cooperation and time for executing the plan and program.” 15. It appears that the appellants requested for time to tide over the crisis, on the ground that they were in the process of discussing the issue of revival of the tea garden with the bank and that other key stakeholders and that they were likely to come up with a design for such revival.It appears that the AGM(SME) of the bank was also a part of the discussion,as a key stakeholder. Paragraph 66 specifically states that the appellants were exploring possibilities of upgradation of the accounts after reversal of excess debits and wrongful charges, and or repayment of legitimate dues, if any, to clear the debts. The appellants sought for co-operation from the bank and time to execute the plan and program. 16. Under such circumstances, and upon consideration of the express stand of the appellants, the contention of Mr. Bandopadhyay that the bank was required to send the entire matter to the Committee for a CAP does not impress us. The reply under Section 13(2) was issued by the appellant on May 17, 2024. On July 15, 2024, the 15 appellants made the first proposal for settlement of the dues in full and final and requested release of the security as well as all personal guarantees of the guarantor. Thus, it is evident from the said communication that even if it was the liability of the bank to identify the stressed asset and refer the matter to the Committee, but upon the discussions being held between the parties and upon the appellants exploring their revival plan, they had proposed a one-time settlement. By their express conduct, the appellants had given up the path to be explored as per the Framework and started negotiating with the bank beyond the saidFramework. 17. Paragraphs 22,23,24 25 and 26 of the first proposal of the appellants dated15th July 2024 for one-time settlement, are quoted below:- “22. As per your advocates letter dt. 15.1.2024 and your notice u/s 13(2) dt. 21.3.24, the outstanding dues as on date of NPA was Rs. 13,24,91,937/-. Thus, (1) We propose to pay Rs, 7.35 Cr as full and final payment towards all outstanding dues of the Company with the Bank (ii) In 12 months time without any interest, (iii) In exchange for release of all security held by the bank including the personal guarantees of all the guarantors. (iv) We shall deposit 10% of the above amount, i.e., Rs. 73.50 lacs in a no lien account within 30 days from your confirmation of the above (v) and the balance amount shall be paid thereafter in 12 equal monthly instalments of Rs. 55,125 Lacs each. (vi) The Company / Directors / Guarantors do not have any ready and available cash, however the above shall be arranged from family and friends and shall also be arranged by raising short term finances on personal capacity from the market. 23. Alternatively, if the above proposal is not acceptable to the Bank, we are ready and willing to pay the entire dues of Rs. 13.24 crores to the bank in the following manner :- 16 (i) Payment of Rs. 13,24,91,937/- crores over a period of 10 years to the bank with 3 years initial moratorium. (ii) Amount of Rs. 6,21,58,100.00 towards CC dues shall be interest free (iii) Amount of Rs. 7,03,33,837.00 towards TL dues shall carry simple interest @6% p.a. on reducing balance (iv) The above amount shall be paid @15% per year from 4th year onwards by cut back method from the sale proceeds which shall be deposited with the bank. (v) Further, financial assistance in the form of CC for Rs. 3 Crores shall be sanctioned by the bank immediately carrying FCNR interest @7.5% and BG of Rs. 30 lacs for fresh electricity connection for running the operations of the garden. (vi) Fresh SLC @ 20% of new CC limit for Bonus and other periods. (vii) Permission for change of existing Guarantors as per previous request due to family arrangements and new investors that may have to be brought in (viii) Old excess interest and penal charges to be reversed (ix) No interest from 01.10.23 to date of approval of the scheme (x) No penal interest from 01.10.23 to date of approval of the scheme (xi) Upgradation of the account with immediate effect (xii) If any additional funds is arranged by the Company / Directors or Tea Board subsidy is received the entire amount shall be deposited with the bank. 24. We have made a very reasonable and justified proposal considering the depleting value of the assets of plantation and factory and the market scenario of the tea industry. The remaining period of lease and mass exodus of the workers is also a worrying factor. The Company's claim for unjustified and excess interest and loss for non-sanction of adhoc may also be factored in. 25. It is hoped that considering the entire backdrop of the situation, our good and bonafide gesture, would be appreciated in the right perspective and further unwarranted and unnecessary legal battle may be averted to. 26. We hope the bank shall extend a hand of cooperation to us for reasonable and amicable settlement and we look forward to hearing from you soon.” 18. The bank replied to the same by an email dated August 9, 2024, asking the appellants to improve the offer. In the meantime, on September 16, 2024, notice under Section 13(4) and a notice of 17 possession under Rule 8 of the Security Interest (Enforcement) Rules, 2002had been issued. Thereafter, a second proposal was issued by the appellants on December 4, 2020, and the relevant paragraphs are quoted below:- “8. In the above backdrop, inspite of all odds, just in order to buy peace and amicably settle the matter and outstanding, we wish to propose a One-time settlement of the account on the following terms:- i. of the bank We propose to pay Rs. 850.00 Lacs as full and final payment for all outstanding dues of the bank. ii. Rest of the terms of our earlier proposal and the even the alternative proposal remain same as earlier, 9. We believe we have made a very reasonable and justified proposal considering the depleting value of the assets, considering the market scenario and also considering several other factors. The company's claim for unjustified and excess interest and loss of goodwill may also be factored in. 10. It is hoped that considering the entire backdrop of the situation, our good and bonafide gesture, would be appreciated in the right perspective and further unwarranted and unnecessary legal battle may be averted to. 11. We hope the bank shall extend a hand of cooperation to this MSME and sick unit for a reasonable and amicable settlement and we look forward to hearing from you soon. That our act goes to show beyond doubt, our intention to crystallize the debts and repay the legitimate dues of the bank.” 19. On January 4, 2025, the third revised proposal was issued by the appellants, and the relevant paragraphs thereof are quoted below:- “12) in the above backdrop, inspite of all odds, just in order to buy peace and amicably settle the matter and outstanding, we wish to propose a One-time settlement of the account on the following terms :- i. the outstanding dues as on date of NPA was Rs. 13,24,91,937/-. Thus, we propose to pay Rs. 10 Crores as full and final payment for all outstanding dues of the bank ii. In 12 months time without any interest, iii. In exchange for release of all security held by the bank including the personal guarantees of all the guarantors. 18 iv. We shall deposit 10% of the above amount, i.e., Rs. 1.10 Crores in a no lien account within 60 days from your confirmation of the above. v. The amount credited to the CC account after NPA and the account held under lien or recovered till date of OTS sanction, shall be considered as our payment with the above initial deposit. vi. and the balance amount shall be paid thereafter in 4 quarterly instalments vii. The Company / Directors / Guarantors do not have any ready and available funds, however the above shall be arranged from family and friends and shall also be arranged by raising short term finances on personal capacity from the market. viii. Hence, liberty may be given to extend the repayment period beyond one year for another year, carrying interest @ one year MCLR after initial one year. 13) We believe we have made a very reasonable and justified proposal considering the depleting value of the assets, considering the market scenario and also considering several other factors. The company's claim for unjustified and excess interest and loss of goodwill may also be factored in. 14) It is hoped that considering the entire backdrop of the situation, our good and bonafide gesture, would be appreciated in the right perspective and further unwarranted and unnecessary legal battle may be averted to. 15) We hope the bank shall extend a hand of cooperation to this MSME and sick unit for a reasonable and amicable settlement and we look forward to hearing from you soon. That our act goes to show beyond doubt, our intention to crystallize the debts and repay the legitimate dues of the bank.” 20. The fourth proposal was sent by the appellants on March 30, 2026, paragraph 10 to 14 of which are quoted below:- “10) Under such circumstances, we being completely incapacitated, would look forward to a reasonable consideration of your esteemed bank in arriving at a resolution to restart the meaningful operations at the garden in the larger interest of all. i. In the above backdrop, inspite of all odds, just in order to buy peace and amicably settle the matter and outstanding, we wish to propose a One-time settlement of the account on the following terms :- 19 i the outstanding dues as on date of NPA was Rs. 13,24,91,937/-. Thus, we propose to pay Rs. 10.25 Crores as full and final payment for all outstanding dues of the bank ii In 12 months time without any interest, iiiIn exchange for release of all security held by the bank including the personal guarantees of all the guarantors. iv. We shall deposit 10% of the above amount, i.e., Rs. 1.025 Crores in a no lien account within 60 days from your confirmation and sanction of the above OTS scheme. vThe amount credited to the CC account after NPA and the account held under lien or recovered till date of OTS sanction, shall be considered as our payment with the above initial deposit. Viand the balance amount shall be paid thereafter in 4 quarterly instalments of 10%, 20%, 30% and 40% vii. The Company / Directors / Guarantors do not have any ready and available funds, however the above shall be arranged from family and friends and shall also be arranged by raising short term finances on personal capacity from the market. viii. Hence, liberty may be given to extend the repayment period beyond one year for another year, carrying interest @ one year MCLR after initial one year. 11) Our alternative proposal vide letter dt. 15.7.24, point no. 23, for a restructuring of the entire account is also proposed and may be examined by the bank as per suitability and policy guidelines regarding revival and restructuring of agriculture based MSME units. 12) In the alternative, please also consider this letter as a formal request in terms of the "Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises (MSMEs)" as per the RBI circular and also as notified by the Central Govt vide notification dt. 29.05.2015. Also in terms of the recent judgement of the Hon'ble Supreme Court in the matter of M/s Pro Knits Vs The Board of Directors of Canara Bank delivered on 1st August 2024. Hence, our prayer may be favourably considered in terms of the said circular and guidelines, before proceeding further with any other recovery measures. The matter for restructuring has already been requested vide our earlier letters as stated above, however, the bank has proceeded with the actions under SARFESI, thereby causing further harm and financial losses to the business and reputation of the Company and its promoters. 20 13) The bank has acted arbitrarily without following the due process as per the guidelines of RBI and under the MSME Act. Further, also made scathing threats by way of emails dt. 13.2.25 and 25.3.25 for initiating further recovery actions and also set-off of the credit balance in the personal savings account of erstwhile Director have been received from the Banks end. The above judgement is a milestone judgement for MSME units suffering in the hand of the banks using their force to sell the properties of the borrower without following due process of law. Hence, due consideration of the bank is humbly sought for revival of this unit should the OTS proposal be declined. 14) We believe we have made a very reasonable and justified proposal considering the depleting value of the assets, considering the market scenario and also considering several other factors. The company's claim for unjustified and excess interest and loss of goodwill may also be factored in.” 21. After all the proposals were sent to the bank, and when the parties did not reach a final settlement, a notice was issued by the appellants on April 10, 2026 to the Reserve Bank of India, with a request for compliance of the Framework of 2016. Thereafter, the Writ Petition was filed. 22. Under such circumstances, the decision in Proknits (supra) does not come to the aid of the appellant, and we quote paragraph 21 thereof: - “ 21. It is also pertinent to note that sufficient safeguards have been provided under the said Chapter for safeguarding the interest of the defaulters-borrowers for giving them opportunities to discharge their debt. However, if at the stage of classification of the loan account of the borrower as NPA, the borrower does not bring to the notice of the bank/creditor concerned that it is a Micro, Small or Medium Enterprise under the MSMED Act and if such an Enterprise allows the entire process for enforcement of security interest under the SARFAESI Act to be over, or it having challenged such action of the bank/creditor concerned in the court of law/tribunal and having failed, such an Enterprise could not be permitted to misuse the process of law for thwarting the actions taken under the SARFAESI Act by raising the plea of being an MSME at a 21 belated stage. Suffice it to say, when it is mandatory or obligatory on the part of the Banks to follow the Instructions/Directions issued by the Central Government and the Reserve Bank of India with regard to the Framework for Revival and Rehabilitation of MSMEs, it would be equally incumbent on the part of the MSMEs concerned to be vigilant enough to follow the process laid down under the said Framework, and bring to the notice of the Banks concerned, by producing authenticated and verifiable documents/material to show its eligibility to get the benefit of the said Framework.” 23. The decision inShri Shri Swami Samarth Construction (supra), although was rendered in respect ofa cooperative bank, paragraphs 7 and 8 of the said judgment deal with the interpretation of the Framework, and the decision in Proknits (supra), was clarified. We quote the same:- “7. As has been noted above, the petitioning enterprise does not seem to have ever claimed the benefit of the terms of the framework after the demand notice under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act was issued. It is at the stage of compliance with an order passed by the relevant Magistrate under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act that this writ petition has been presented before this court claiming benefits of the framework to restrain respondent No. 2 and its officers from proceeding further under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act and other enactments except in the manner contemplated under the said notification. We find the bona fides of the petitioning enterprise to be suspect. 8.Pro Knits [Pro Knits v. Board of Directors of Canara Bank, (2024) 246 Comp Cas 422 (SC); (2024) 10 SCC 292; (2024) 4 SCC (Civ) 1; 2024 SCC OnLine SC 1864.] is a decision of a co- ordinate Bench of this court holding, inter alia, that the notification is binding on the lending banks/secured creditors. Finding to the contrary by the High Court of Bombay in the judgment and order under challenge in the appeal was, thus, quashed. Though while stressing that the terms of the framework need to be followed by the lending banks/secured creditors before the account of an micro, small and medium enterprise is classified as non-performing asset, this decision 22 also lays stress on the obligation of the micro, small and medium enterprises by holding that “it would be equally incumbent on the part of the micro, small and medium enterprises concerned to be vigilant enough to follow the process laid down under the said framework, and bring to the notice of the banks concerned, by producing authenticated and verifiable documents/material to show its eligibility to get the benefit of the said framework”. It was cautioned that “if such an enterprise allows the entire process for enforcement of security interest under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act to be over, or it having challenged such action of the bank/creditor concerned in the court of law/Tribunal and having failed, such an enterprise could not be permitted to misuse the process of law for thwarting the actions taken under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act by raising the plea of being an micro, small and medium enterprise at a belated stage”. This decision, however, left unsaid something which we have explained hereinabove while construing the terms consistently to prevent undermining of rights that one central enactment confers by another.” 24. After all the negotiations and proposals failed, the appellant filed the writ petition to frustrate the SARFAESI proceedings. Such endeavour on the part of the appellants display lack of bona fide and the learned Single Judge rightly dismissed the writ petition. The appellants did not approach the writ court with clean hands. A proceeding has also been initiated against all the SARFAESI actions taken against the appellants, by filing an application under Section 17 of the SARFAESI Act. We direct that the said proceeding will continue independently, and this order is restricted to non-grant of the prayers and reliefs in the writ petition. 25. We also make it clear that the order of His Lordship shall be restricted to dismissal of the writ petition and the appellants will be at 23 liberty to raise all points of law before the Learned Debts Recovery Tribunal. 26. The appeal and the application stand dismissed. 27. Urgent photostat certified copies of this judgment, if applied for, be supplied to the parties, upon fulfilment of requisite formalities. (SHAMPA SARKAR, J.) I agree. (ARJUN RAY MUKHERJEE, J.)