Kerala High Court
M/S. Everest Agro Spices vs The Board Of Directors Of Axis Bank Ltd on 16 January, 2026
2026:KER:4084
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE BASANT BALAJI
FRIDAY, THE 16TH DAY OF JANUARY 2026 / 26TH POUSHA, 1947
WP(C) NO. 48711 OF 2025
PETITIONERS:
1 M/S. EVEREST AGRO SPICES,
14/1287, RECCA VALLEY ROAD, MAVELIPURAM COLONY, KAKKANAD,
ERNAKULAM, KERALA, REPRESENTED BY ITS PROPRIETOR, PIN -
682030
2 PAULOSE P.V.,
AGED 59 YEARS
S/O. VARKEY, SOLE PROPRIETOR, M/S. EVEREST AGRO SPICES,
RESIDING AT PALLATHUKUDY HOUSE, KURUPPAMPADY P.O., PIN -
683545
BY SHRI MATHEWS J. NEDUMPARA
SMT. MARIA NEDUMPARA
SHRI.SHAMEEM FAYIZ V.P.
SHRI.ROY PALLIKOODAM
RESPONDENTS:
1 THE BOARD OF DIRECTORS OF AXIS BANK LTD.,
CORPORATE AND HEAD OFFICE, 'AXIS HOUSE', 7TH FLOOR, C-2,
WADIA INTERNATIONAL CENTRE, PANDURANG BUDHKAR MARG, WORLI,
MUMBAI, REPRESENTED BY ITS CHAIRMAN, PIN - 400025
2 THE AUTHORIZED OFFICER,
AXIS BANK LTD., 5TH FLOOR, CHICAGO PLAZA, RAJAJI ROAD,
KOCHI, PIN - 682035
3 MINISTRY OF MICRO SMALL AND MEDIUM ENTERPRISES,
REPRESENTED BY ITS SECRETARY, UDYOG BHAWAN, RAFI MARG, NEW
DELHI, PIN - 110001
4 RESERVE BANK OF INDIA,
REPRESENTED BY ITS GOVERNOR, NEW CENTRAL OFFICE BUILDING,
SHAHID BHAGAT SINGH ROAD, FORT, MUMBAI, PIN - 400001
2
WPC 48711/25
2026:KER:4084
5 UNION OF INDIA,
REPRESENTED BY ITS SECRETARY, DEPARTMENT OF FINANCIAL
SERVICES, MINISTRY OF FINANCE, 3RD FLOOR, JEEVAN DEEP
BUILDING, SANSAD MARG, NEW DELHI, PIN - 110001
6 STATE OF KERALA,
REPRESENTED BY ITS CHIEF SECRETARY, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM, PIN - 695001
7 GENERAL MANAGER,DISTRICT INDUSTRIES CENTRE, ERNAKULAM,
KAKKANAD, PIN - 682030
8 CHAIRMAN,
MICRO AND SMALL ENTERPRISE FACILITATION COUNCIL (MSEFC),
DIRECTORATE OF INDUSTRIES COMMERCE, VIKAS BHAVAN P.O.,
THIRUVANANTHAPURAM, KERALA, PIN - 695033
9 CHAIRMAN,
STATE LEVEL INTER-INSTITUTIONAL COMMITTEE, REGIONAL OFFICE,
RESERVE BANK OF INDIA, BAKERY JUNCTION, P.B. NO. 6507,
THIRUVANANTHAPURAM, PIN - 695033
10 DEEPTHI CHANDRAN,
ADVOCATE COURT COMMISSIONER APPOINTED IN CRL. MP.10534/2025,
IN THE FILES OF CJM THRISSUR, THRISSUR BAR ASSOCIATION,
KALYAN NAGAR, AYYANTHOLE, THRISSUR, KERALA, PIN - 680003
11 THE SENIOR INSPECTOR OF POLICE,
PUTHENCRUZ POLICE STATION, PUTHENCRUZ, PIN - 682308
12 THE SENIOR INSPECTOR OF POLICE,
MUVATTUPUZHA POLICE STATION, XHJJ+6P4, PUZHAKKARAKAVU RD,
THOTTUMKALPEEDIKA, MUVATTUPUZHA, PIN - 686661
13 THE SENIOR INSPECTOR OF POLICE,
CHERPU POLICE STATION, C6R6+59V, CHERPU - THRIPRAYAR RD,
CHERPU, THRISSUR, KERALA, PIN - 680561
14 THE ATTORNEY GENERAL FOR INDIA,
OFFICE OF ATTORNEY GENERAL OF INDIA, SUPREME COURT COMPLEX,
TILAK MARG, NEW DELHI, PIN - 110001
15 THE CHAIRMAN,STATE BANK OF INDIA, STATE BANK BHAWAN, NARIMAN
POINT, MUMBAI, PIN - 400021
16 ANIL DHIRAJLAL AMBANI,
SEA WIND, CUFFE PARADE, MUMBAI, PIN - 400005
3
WPC 48711/25
2026:KER:4084
17 MUKESH DHIRAJLAL AMBANI,
ANTILLA, ALTAMOUNT ROAD, CUMBALLA HILL, MUMBAI, PIN - 400036
18 CENTRAL REGISTRY OF SECURITISATION ASSET RECONSTRUCTION AND
SECURITY INTEREST OF INDIA (CERSAI),
TOWER 1, OFFICE BLOCK, 4TH FLOOR, PLATE-A, NBCC, KIDWAI
NAGAR (EAST), NEW DELHI REPRESENTED BY ITS CENTRAL
REGISTRAR, PIN - 110023
BY SHRI.P.PAULOCHAN ANTONY, SC
SRI.KARTHIK S. ACHARYA
SHRI.SREEJITH K.
SHRI.S.NIKHIL RAJEEV
SHRI. G.VISWANATHAN
SMT.ASWNI M.P.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 8.1.2026,
THE COURT ON 16.01.2026 DELIVERED THE FOLLOWING:
4
WPC 48711/25
2026:KER:4084
JUDGMENT
(Dated this the 16th day of January 2026) The 1st petitioner is a Sole Proprietorship of the 2nd Petitioner engaged in the trading of agricultural produce, which claims to be a registered Medium MSME enterprise having a history of more than 5 years in trade. The 1st Respondent Bank is the Board of Directors, represented by its chairman and the 2nd Respondent is its authorised Officer. It is the case of the petitioners that they have availed credit facilities from Respondent Nos. 1-10 lenders to the tune of Rs. 20 crores. The loan facilities were renewed from time to time and the said loan was fully covered by collateral facilities.
2. However, due to various factors beyond the control of the Petitioners, the business of the MSME faced financial stress which led to default on the repayment obligations. Consequently, a 5 WPC 48711/25 2026:KER:4084 demand notice dated 20.05.2025 under Section 13(2) of the SARFAESI Act, 2002 and a possession notice dated 16.08.2025 under Section 13(4) of the SARFAESI Act, 2002 was issued by the 1st respondent Bank.
3. Thereafter, the 2nd respondent, along with the Advocate Commissioner, tried to dispossess the Petitioners from their residential home on the strength of the Order dated 14 -10- 2025 passed by the Chief Judicial Magistrate, Thrissur, under Section 14 of the SARFAESI Act. Consequently, a letter by the Advocate Commissioner dated 17/11/2025, informing the Petitioners regarding taking of possession of the secured assets was also sent to the petitioners. Aggrieved by the coercive proceedings initiated at the instance of the respondent lenders, this petition stands filed.
4. Heard both the learned counsels appearing for the 6 WPC 48711/25 2026:KER:4084 petitioners as well as the respondents.
5. The primary contention of the learned counsel for the petitioners is that the 1st petitioner, being an MSME enterprise, within the meaning of S. 7 (1) of the MSMED Act,2006, is entitled to the protection of the notification dated 29.05.2015. A copy of the UDYAM registration certificate has been produced as Ext.P1, evidencing the MSME status of the petitioners, but the fact remains that as per the said certificate, the petitioners' unit is not an MSME. However, according to the petitioners, as per the said notification which has been issued in exercise of the powers conferred in the Central Government under Section 9 of the MSMED Act, the Banks and financial institutions are imposed with a duty to extend to the MSME borrowers, the benefit of the rehabilitation framework, but that the same has been denied to the petitioners' firm. Therefore, prays that all proceedings done in furtherance of the classification 7 WPC 48711/25 2026:KER:4084 of the loan account of the petitioner enterprise without referring the same to the Committee for identifying incipient stress for availing the opportunity of rehabilitation is illegal and liable to be quashed.
6. The learned counsel for the petitioners has also made available in court a copy of a reference letter submitted for the rectification of error in the Udyam Registration Certificate before the Ministry of MSME who has issued the same, to the extent it states that the petitioner enterprise is "not an MSME". According to the said application dated 12.12.2025, the applicant's unit falls squarely within the definition given for medium enterprise given under section 7 of the MSMED Act, 2006, and the notification issued by the Central Government under the said Act. In terms of the Notification no. S.O 2119 (E) dated 26.6.2020 of the Central Government, all the enterprises where the investment in plant and machinery is under Rs.50 crores and the turnover is less 8 WPC 48711/25 2026:KER:4084 than Rs. 250 crores are medium enterprises. By Notification no. S.O 1364 (E) dated 21.3.2025, the said limits have been further enhanced to Rs. 125 crores and Rs. 500 crores, respectively.
7. Hence, the counsel points out that even if going by the aforesaid notifications of the year 2020 and 2025 enhancing the monetary limit prescribed for MSMEs, it is well and good to attribute MSME status to the petitioner enterprise as they claim that the enterprise is having the requisite turnover which would obviously accommodate the said enterprise within the definition of medium MSME as per the said section. Hence, since Ext P1 is under challenge, it cannot be considered as the sole evidence for denying MSME status to the petitioner enterprise.
8. A perusal of Ext P1 evidences the fact that the petitioner enterprise unit for the years 2023-24 and 2024-25 is shown as "Not an MSME". Therefore, the MSME status as 9 WPC 48711/25 2026:KER:4084 presently claimed by the petitioner enterprise itself has gone in vain. Consequently, all other contentions regarding denial of benefits as contemplated in the notification of the year 2015, which is available to a registered MSME, also, need not be answered to, as it goes out of play. Since no finality has been arrived in the rectification application submitted with respect to Ext P1, as of now, there is no evidence at hand to substantiate the quantum of turnover as claimed by the petitioner enterprise to attribute them a medium enterprise status. Hence, Ext P1 being the sole evidence to rely upon, as regards the MSME status, it can only be inferred that the petitioner enterprise is not an MSME as seen in Ext P1.
9. The second question mooted by the counsel for the petitioners is that while considering an application made by a secured creditor under Section 14 of the Act, whether the CJM is obliged to issue notice to the borrower. Section 14 of the Act 10 WPC 48711/25 2026:KER:4084 provides that when the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the aforesaid purpose, make a request, in writing, to the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or bound, to take possession thereof. It further provides that once such a request is made, the Magistrate concerned shall take possession of such asset and forward the same to the secured creditor.
10. In R.D. Jain and Co. (M/s) v. Capital First Ltd. And Others reported in (2022 SCC Online SC 921), the hon'ble Apex Court has taken into consideration the decision of NKGSB Cooperative Bank Limited v. Subir Chakravarthy and Others 11 WPC 48711/25 2026:KER:4084 (Civil appeal No. 1637/2022) decided on 25.02.2022, wherein it was held that under Section 14 of the Act, the process of taking possession of secured assets is a purely ministerial step performed by the Chief Metropolitan Magistrate (CMM) or District Magistrate (DM). The law does not require the Magistrate to personally visit the site, instead, they may execute the order themselves or authorize a subordinate officer or even an advocate Commissioner who is legally recognized as an officer of the court to act on their behalf. This ensures that securing the property is carried out efficiently through authorized personnel without necessitating the personal presence of the Magistrate.
11. Relevant paragraph of R.D. Jain and Co. (supra) reads thus: -
" 8.1. ** ** ** ** ** While disposing of the application under S.14 of the SARFAESI Act, no element of quasi-judicial function or application of mind would require. The Magistrate has to 12 WPC 48711/25 2026:KER:4084 adjudicate and decide the correctness of the information given in the application and nothing more. Therefore, S.14 does not involve an adjudicatory process qua points raised by the borrower against the secured creditor taking possession of secured assets.
9. Thus, in view of the scheme of the SARFAESI Act, more particularly, S.14 of the SARFAESI Act and the nature of the powers to be exercised by learned Chief Metropolitan Magistrate / learned District Magistrate, the High Court in the impugned judgment and order has rightly observed and held that the power vested in the learned Chief Metropolitan Magistrate / learned District Magistrate is not by way of persona designate ."
12. Reliance has also been placed in Vijaya Bank v. State of Kerala, (2007 supreme (Online) (KER) 6787), which reads as follows: -
"5. *** **** *** Reading of the terms of the Act would also show that while considering such a request, no adjudication is expected from a Magistrate. On the other hand, once an application is preferred by the secured creditor, the Magistrate is mandatorily obliged to act upon the same and take possession of the secured asset and forward such asset to the secured creditor. The provision concerned does not leave any part of the duties of the Magistrate, to his discretion."
13. Thus, the CJM who acts under the said section lacks jurisdiction to adjudicate borrowers' petitions as this section limits 13 WPC 48711/25 2026:KER:4084 the power vested with the CJM to ministerial actions only without adjudicatory processes as held in The Federal Bank Limited v. Chief Judicial Magistrate, Kozhikode (2025 (3) KLT 146) and, any aggrieved party is to be relegated to raise objections in the proceedings under section 17 of the Act, before the DRT within 45 days. If the DRT concludes that the secured creditor took possession of the asset violating any statutory provision, it can even direct restoration of possession of the assets to the borrower, under sub- section.3 of sec.17 of the Act. See also, Balkrishna Rama Tarle v. Phoenix ARC (P) Ltd, (2023 (1) SCC 662) and C.R. Sindhu v. State of Kerala (2007 (4) KHC 944).
14. In Union of India v. Tulsi Ram Patel [(1985) II LLJ 206 SC], the hon'ble Supreme Court observed that "in certain circumstances, application of principles of natural justice should be modified and even excluded." According to the Court, where a right 14 WPC 48711/25 2026:KER:4084 to a prior notice and an opportunity of hearing would obstruct prompt action, such a right could be excluded. The Supreme Court clarified that, if the action to be taken, its object and purpose, and the scheme of the relevant statutory provisions warrant, the right to prior notice and hearing stand excluded. If legislation and the necessities of a situation, the Supreme Court also observed, "can exclude the principles of natural justice including the audi alteram partem rule, a fortiori, so can a provision of the Constitution." Therefore, it is very well made out that the CJM need not give notice to or hear the borrower or any person in possession of the secured asset while dealing with applications under section 14 of the Act.
15. The learned counsel for the petitioners further contended the legality of simultaneous proceedings instituted by the respondent bank under SARFAESI as well as the RDB Acts and 15 WPC 48711/25 2026:KER:4084 prayed for the dismissal of the same. This question is already covered by the judgment of M/s Transcore v. Union of India, (AIR 2007 SC 712), wherein the hon'ble Supreme Court had upheld the legality of concurrent proceedings initiated under both SARFAESI and RDB Acts, emphasizing that the principle of doctrine of election of remedies does not apply to the said context as remedies under both the statutes are complementary rather than exclusive and hence, both the remedies can be availed of simultaneously.
16. A learned Single Judge of this Court in M.D. Esthappan Infrastructure Pvt Ltd. and Ors. V. Reserve Bank of India and Ors., reported in (2025 KHC OnLine 2176), had also reiterated the permissibility of simultaneous proceedings under both the Acts. The relevant portion of the above judgment is extracted herein for reference:
"17. The principles laid down in the Transcore judgment dealt with the interplay between the Recovery of Debts and Bankruptcy Act (RDB Act) and the SARFAESI Act. The Hon'ble Supreme Court held that the 16 WPC 48711/25 2026:KER:4084 first and third provisos to Section 19(1) of the DRT Act are enabling provisions introduced to align the DRT Act, NPA Act, and Order XXIII CPC. Withdrawal of the O. A. is not a precondition for invoking the NPA Act, and the bank/FI may act under the NPA Act with or without DRT's permission, depending on the circumstances. The doctrine of election does not apply to the DRT Act and the NPA Act, as they are not inconsistent or repugnant but together constitute a single, complementary remedy. The NPA Act provides a non-adjudicatory mechanism for enforcing the security interest created by the borrower in favour of the bank/Fl, based not only on default in repayment but also on the borrower's failure to maintain margin and asset value, thereby enabling secured creditors to act without court intervention. Issuance of notice under Section 13(2) of the SARFAESI Act constitutes initiation of "action" within the meaning of the first proviso to Section 19(1) of the DRT Act.
18. The Hon'ble Apex Court also held that Section 13(10) of the SARFAESI Act shows that SARFAESI and DRT remedies are complementary and can be pursued simultaneously. Section 13(13) of SARFAESI demonstrates that a Section 13(2) notice has substantive legal consequences and is not merely a show cause notice. Withdrawal under the first proviso to Section 19(1) may be necessary in cases where assets are in possession of a court receiver or under injunction, but not otherwise. The objective behind the proviso is to provide procedural flexibility and not to restrict enforcement under SARFAESI, The High Court's view that the proviso is mandatory was overruled, and it was held that the bank may proceed under SARFAESI without DRT's prior leave.
** ** ** **"
17. The primary relief sought for by the petitioners claiming protection available to MSMEs under the framework of rehabilitation as per the notification dated 29.5.2015 fail for the 17 WPC 48711/25 2026:KER:4084 very reason that the 1st petitioner cannot be attributed the status of an MSME as seen in Ext.P1. It is also held that the petitioners/borrowers need not be served by notices by the learned CJM while dealing with Section 14 of the Act. Another contention mooted by the counsel for the petitioners questioning the legality of parallel proceedings under SARFAESI as well as the RDB Acts also cannot be sustained, as the exhaustion of both the remedies are complementary rather exclusive, and therefore can be resorted to simultaneously, in view of the law laid down in the aforementioned decisions. Hence, considering the facts and circumstances of the case at hand and taking into note the above given decisions, it is only to be held that the petitioners are disentitled to the reliefs sought in the present petition.
In the result, the W.P (C) stands dismissed.
Sd/-BASANT BALAJI, JUDGE dl/ 18 WPC 48711/25 2026:KER:4084 APPENDIX OF WP(C) NO. 48711 OF 2025 PETITIONER EXHIBITS Exhibit P1 A COPY OF THE UDYAM REGISTRATION CERTIFICATE NO.
UDYAM-KL-02-0005052, ISSUED BY THE MINISTRY OF MICRO, SMALL & MEDIUM ENTERPRISES (MSME), GOVERNMENT OF INDIA, DATED 30.10.2020 Exhibit P2 A COPY OF THE MSME NOTIFICATION NO. S.O.1432 (E) DATED 29.05.2015, ISSUED BY THE MSME MINISTRY, GOVERNMENT OF INDIA Exhibit P3 A TRUE COPY OF THE RBI NOTIFICATION NO. RBI NOTIFICATION NO. FIDD.MSME & NFS.BC.NO.
21/06.02.31 /2015-16, DATED 17.03.2016 Exhibit P4 A COPY OF THE RBI NOTIFICATION RPCD.NO. PL NFS.BC.57/06.04.01/2001-2002- DATED 16.01.2002 Exhibit P5 A COPY OF THE RBI NOTIFICATION DBOD.BP.BC.NO.
34/21.04.132/2005-06- DATED 8.9.2005 Exhibit P6 A COPY OF THE JUDGEMENT DATED 05.01.2023 PASSED BY SUPREME COURT IN IN CIVIL APPEAL NO.6662/2022, KOTAK MAHINDRA BANK LTD V. GIRNAR CORRUGATORS PVT. LTD &ORS Exhibit P7 A COPY OF THE JUDGEMENT DATED 30/11/2023 PASSED BY THIS HON'BLE COURT IN WRIT APPEAL NO.1730/2023, ABDUL NAZER V. UNION BANK OF INDIA Exhibit P8 A COPY OF THE JUDGMENT DATED 07/11/2024 IN WRIT APPEAL NO.1728/2024, PK KRISHNAKUMAR V INDUSIND BANK &ORS. OF THIS HONOURABLE COURT Exhibit P9 A COPY OF THE ORDER DATED 13/12/2024 IN SPECIAL LEAVE TO APPEAL NO.29302/2024 OF THE SUPREME COURT Exhibit P10 17. TRUE COPY OF THE COMMON JUDGMENT IN THE I WRIT PETITIONS NOS. 45166/2024 AND 46514/2024, ESTHAPPAN INFRASTRUCTURE PVT. LTD V. RESERVE BANK OF INDIA DATED 11/03/2025 OF THIS HONOURABLE COURT Exhibit P11 TRUE COPY OF THE JUDGMENT IN WRIT PETITION NO.
30885/2024, SARK SPICE V. RBI DATED 22/11/2024 OF THIS HONOURABLE COURT Exhibit P12 TRUE COPY OF THE JUDGMENT IN WP(L) NO. 34253/2022, ALEXIS BUSINESS SOLUTIONS PVT. LTD. VS. ADITYA BIRLA FINANCE LTD. DATED 2/12/2022 OF THE BOMBAY HIGH COURT Exhibit P13 TRUE COPY OF THE JUDGMENT IN WP(L) NO. 5781/2025, M/S. RAY PROJECTS PVT. LTD V. THE BOARD OF DIRECTORS OF CANARA BANK DATED 7/10/2025 OF THE BOMBAY HIGH COURT Exhibit P14 TRUE COPY OF THE JUDGMENT IN WP(C) NO.14203/2024, M/S. CRAFT KNIT GARMENTS V. THE BOARD OF DIRECTORS 19 WPC 48711/25 2026:KER:4084 OF SIDBI &ORS & CONNECTED CASES DATED 22/07/2024 OF THE MADRAS HIGH COURT Exhibit P15 A CHART OF THE VARIOUS PROCEEDINGS MS. MANISHA MEHTA HAD TO INSTITUTE Exhibit P16 A COPY OF THE JUDGMENT DATED 07.10.2025 OF THE BOMBAY HIGH COURT IN W.P. NO. 14829 OF 2025 Exhibit P17 A COPY OF THE SANCTION MEMORANDUM BEARING REFERENCE NO. AXIS/OAS/2024-25/592119 DATED 24.09.2024 ISSUED BY THE RESPONDENT NO. 1 BANK WHICH CLEARLY RECORDS THE PETITIONER NO. 1 MSME AS MSME Exhibit P18 A COPY OF THE PETITIONER NO. 1'S EMAIL DATED 18.02.2025 Exhibit P19 A COPY OF THE DEMAND NOTICE DATED 20.05.2025 UNDER SECTION 13(2) OF THE SARFAESI ACT, 2002 ISSUED BY THE RESPONDENT NO. 1 AXIS BANK Exhibit P20 A COPY OF THE POSSESSION NOTICE DATED 16.08.2025 UNDER SECTION 13(4) OF THE SARFAESI ACT, 2002 ISSUED BY THE RESPONDENT NO. 1 AXIS BANK Exhibit P21 A COPY OF THE NOTICE DATED 17-11-2025 ISSUED BY THE ADVOCATE COMMISSIONER APPOINTED BY THE CHIEF JUDICIAL MAGISTRATE, THRISSUR Exhibit P22 A COPY OF THE JUDGMENT DATED 06.8.2025 IN WPC 5466/2025 OF THIS HONOURABLE COURT, PDMC INDUSTRIES V. MINISTRY OF MICRO SMALL AND MEDIUM ENTERPRISES Exhibit P23 TRUE COPY OF THE JUDGMENT DATED 03.06.2025 IN WP(MD) 23328/2024 OF THIS HONOURABLE MADURAI BENCH OF MADRAS HIGH COURT, A.K. KARTHIKEYAN V. THE AUTHORIZED OFFICER, CANARA BANK Exhibit P24 COPY OF THE ORDER OF THE NCLT MUMBAI IN CP(IB) NO.3025(MB) OF 2019 Exhibit P25 A COPY OF THE ORDER OF NCLT-I, MUMBAI, PASSED IN CP(IB) NO.845(MB) OF 2022