Shri Swami Samarth Construction & Finance Solution & Anr Vs Board of Directors of NKGSB Co-Op. Bank Ltd. & Ors (Supreme Court of India)
Supreme Court held that Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises does require MSME to notify the lending bank by producing authenticated and verifiable documents/material to show its eligibility to get the benefit of the said Framework.
Facts- This is a writ petition under Article 32 of the Constitution of India by an enterprise registered under the Micro, Small and Medium Enterprises Development Act, 2006.
The petitioning enterprise had executed a loan agreement with the NKGSB Co-operative Bank but had failed in its obligation to repay the loan. In due course, the account of the petitioning enterprise was classified as a non-performing asset. The authorised officer of the respondent no.2 issued a demand notice dated 13th May, 2024 u/s. 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, calling upon the petitioning enterprise to repay the dues of the respondent no.2 within 60 days.
The petitioning enterprise, submits that it was the obligation of the respondent no.2 to identify “incipient stress” in the loan account of the petitioning enterprise but it did not so identify prior to classifying the loan account as NPA which, according to him, is wholly illegal.
