Court, in exercise of its jurisdiction, cannot go into the decision of Bank in classifying Borrower’s account as NPA – M/s. Neelkanth Yarn Vs. Punjab National Bank & ors. – Himachal Pradesh High Court
Hon’ble High Court held that:
(i) The Court, in exercise of its jurisdiction, cannot go into the decision of respondent-bank in classifying the petitioner’s account as NPA. If the respondent-bank proceeds further and reaches Section 13(4) of the SARFAESI Act stage, the petitioner-firm can file application under Section 17 of the SARFAESI Act. The DRT can go into the aspect of classifying the account as NPA and also whether RBI guidelines have been violated on any aspect leading to declaring the account as NPA and taking recourse under the SARFAESI Act.
(ii) The aspect of classifying an account as NPA is not justiciable in exercise of power of judicial review under Article 226 of the Constitution.
