The aspect of classifying an account as NPA is not justiciable in exercise of power of judicial review under Article 226 and upto Section 13(4) of SARFAESI Act, 2002 no remedy is provided to the Borrower – Gaurav Lubricants Pvt. Ltd. Vs. Tamilnadu Mercantile Bank Ltd. – Telangana High Court
November 1, 2022
Hon’ble High Court held that the Debts Recovery Tribunal can go into the aspect of classifying the accounts as NPAs and also whether RBI guidelines are violated on any aspect leading to declaring the accounts as NPAs and taking recourse under the Act. On the contrary, as consistently opined by Constitutional courts, the aspect of classifying an account as NPA is not justiable in exercise of power of judicial review under Article 226 of the Constitution. We are therefore of the opinion that these writ petitions are not maintainable. Further, classifying loan account as NPA can be challenged before RBI alleging that its guidelines are violated. A complaint can be filed before the Ombudsman.