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2021 (1) TMI 1142 - HC - Companies LawApplicability of Clause 2.1.2 (i) or Clause 2.1.3 of RBI Master Circular, dated July 1, 2015 - cash credit facility given to the petitioner classified as Non-Performing Asset (NPA) - Section 13(2) of the SARFAESI Act, 2002 and Section 13(4) of the 2002 Act - HELD THAT:- It is clear that the concerned bank has a discretion with regard to marking an account as NPA upon the account running overdue for 90 days. Clause 2.1.3 has to be read with the other provisions of the Master Circular. The RBI Circular bearing DOR No. BP.BC.34/21.04.048/2019-20 dated February 11, 2020 provides for restructuring of advances in the MSME (Micro, Small and Medium Enterprises) sector. Such provision for one-time restructuring of existing loans to MSMEs only pertain to those classified as ‘standard’, which the account of the petitioner no.1 ceased to be from February 29, 2020 onwards. Moreover, Clause (i) thereof provides that the aggregate exposure, including non-fund based facilities, of banks and NBFCs to the borrower cannot exceed ₹ 25 crore as on January 1, 2020 for an MSME to be eligible for such restructuring. The petitioners, as per the annexures of the writ petition itself, had exceeded the ₹ 25 crore limit on November 30, 2019 itself, thus, rendering the petitioners ineligible for getting the benefit of the scheme contemplated by the Circular. The petitioners have failed to prove any mala fides or arbitrariness on the part the respondents. The RBI Circulars cited by the petitioners are not attracted, since the account of the petitioner no.1 lost its status as a ‘standard’ account after February 28, 2020, when the same was classified as NPA. That apart, such classification on February 28, 2020 could not be said to be an arbitrary exercise beyond the pale of discretion of the bank and the respondent-authorities. Thus, there is no scope of finding fault with the legitimate exercise of discretion on the part of the respondents in the present case. The acts/omissions complained of in the writ petition do not merit interference by the writ court - Appeal dismissed.
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