Kerala High Court
Maryamaa Josh vs The Board Of Directors Of The Canara Bank on 10 March, 2026
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W.P.(C) No. 46752 of 2025
2026:KER:22158
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE BASANT BALAJI
TUESDAY, THE 10TH DAY OF MARCH 2026 / 19TH PHALGUNA, 1947
WP(C) NO. 46752 OF 2025
PETITIONERS:
1 MARYAMAA JOSH, AGED 54 YEARS
W/O. JOSHMON LAWRENCE PROPRIETOR OF LSON TRADE LINKS, ASHOK
LAND, PLAMMOOTTIL HOUSE, INDUSTRIAL NAGAR P.O.,
CHANGANACHERRY, PIN - 686106
2 JOSHMON LAWRENCE,AGED 60 YEARS
S/O. P.P LAWRENCE PROPRIETOR, M/S. ASHOK RUBBER FACTORY,
HAVING ITS REGISTERED ADDRESS AT ASHOK LAND, INDUSTRIAL
NAGAR P.0, VEROOR, CHANGANACHERRY, PIN - 686106
BY SMT. MARIA NEDUMPARA
SHRI.SHAMEEM FAYIZ V.P.
SHRI.ROY PALLIKOODAM
RESPONDENTS:
1 THE BOARD OF DIRECTORS OF THE CANARA BANK ,
REPRESENTED BY ITS CHAIRMAN 112, J.C. ROAD, BENGALURU,
KARNATAKA, PIN - 560001
2 CANARA BANK,REPRESENTED BY ITS CEO & MANAGING DIRECTOR, 112,
J.C. ROAD, BENGALURU, PIN - 560001
3 AUTHORISED OFFICER & CHIEF MANAGER, CANARA BANK,
VEROOR INDUSTRIAL ESTATE BRANCH, 10/599, KUMILY ROAD, VEROOR
IE NAGAR, VEROOR P.O., CHANGANACHERRY, PIN - 686001
4 MINISTRY OF MICRO SMALL AND MEDIUM ENTERPRISES,
REPRESENTED BY ITS SECRETARY, UDYOG BHAWAN, RAFI MARG, NEW
DELHI, PIN - 110001
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
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W.P.(C) No. 46752 of 2025
2026:KER:22158
6 GENERAL MANAGER,DISTRICT INDUSTRIES CENTRE, ERNAKULAM.
KAKKANAD, PIN - 682030
7 STATE OF KERALA,REPRESENTED BY ITS CHIEF SECRETARY,
GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001
8 THE STATION HOUSE OFFICER,CHANGANASSERY POLICE STATION,
CHANGANASSERY, KOTTAYAM, PIN - 686101
9 CHAIRMAN,
MICRO AND SMALL ENTERPRISE FACILITATION COUNCIL (MSEFC)
DIRECTORATE OF INDUSTRIES COMMERCE, VIKAS BHAVAN P.O,
THIRUVANANTHAPURAM, KERALA, PIN - 695033
10 CHAIRMAN,
STATE LEVEL INTER-INSTITUTIONAL COMMITTEE REGIONAL OFFICE,
RESERVE BANK OF INDIA BAKERY JUNCTION, P.B. NO. 6507,
THIRUVANANTHAPURAM, PIN - 695033
11 RESERVE BANK OF INDIA,REPRESENTED BY ITS GOVERNOR, NEW
CENTRAL OFFICE BUILDING, SHAHID BHAGAT SINGH ROAD, FORT,
MUMBAI, MAHARASHTRA, PIN - 400001
12 ANIL DHIRAJLAL AMBANI,
SEA WIND, CUFF PARADE, MUMBAI, MAHARASHTRA, PIN - 400005
13 MUKESH DHIRAJLAL AMABANI,ANTILLA, ALTAMOUNT ROAD, CUMBALLA
HILL, MUMBAI, MAHARASHTRA, PIN - 400021
14 THE ATTORNEY GENERAL OF 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
BY SRI.C.AJITH KUMAR
SMT.ANUROOPA JAYADEVAN, CGC
SRI.MILLU DANDAPANI
SMT.VARSHA S.S.
SRI.M GOPIKRISHNAN NAMBIAR
SRI.JITHESH MENON
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 5.2.206,
THE COURT ON 10.03.2026 DELIVERED THE FOLLOWING:
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W.P.(C) No. 46752 of 2025
2026:KER:22158
JUDGMENT
(Dated this the 10th day of March 2026) The case of the petitioners is that the 1st petitioner is a woman MSME entrepreneur engaged in the trade of various products, namely LSON Trade links, which is a registered MSME. The 2nd petitioner is her husband, who also runs a registered MSME unit by the name M/s. Ashok Rubber Factory, engaged in the manufacture of molded rubber pads and plastic pipes. Due to the inability to repay the loan facilities availed from the respondent Bank, default occurred, and the account of the 2nd petitioner was classified as NPA.
2. Subsequently, the Respondents issued Ext.P3 demand notice dated 24.04.2024 under Section 13(2) of the SARFAESI Act, 2002 seeking a repayment of Rs.68,55,524.98/-. The petitioner addressed the Bank by letter dated 04.06.2024 explaining the financial difficulties seeking 4 W.P.(C) No. 46752 of 2025 2026:KER:22158 flexible accommodation proposing a repayment plan for closing the said loan.
3. The Bank then issued Ext.P5 letter dated 15.06.2024 rejecting the claim raised by the petitioner. Thereafter, the respondent bank resorted to section 14 of the SARFAESI Act, 2002 and initiated recovery proceedings. Aggrieved by the above scenario, the present petition stands filed.
4. According to the counsels for the petitioners, the respondent Bank had acted in violation of the notification dated 29.05.2015, issued in exercise of the powers conferred under Sec.9 of the MSMED Act, 2006, by the Central Government and had initiated recovery proceedings against the petitioners without even referring them before the Committee constituted under the framework for rehabilitation for availing 5 W.P.(C) No. 46752 of 2025 2026:KER:22158 benefits as contemplated in the said notification, which is a nullity in the eyes of law and hence, the entire proceedings done pursuant thereto is liable to be quashed.
5. Further, they contended that the judgments of the hon'ble Apex Court in Pro Knits v. Canara Bank [2024) 10 SCC 292] and Shri Shri Swami Samarth Construction & Finance Solution and Ors. v. The Board of Directors of NKGSB Co-op. Bank Ltd. and Ors. (2025 SCC Online Sc 1566), having been rendered per incuriam, is not at all binding on other courts and tribunals under Art.141 of the Constitution of India. The counsel also challenged the legality of simultaneous proceedings initiated under the SARFAESI Act with that of the suit filed under the RDB Act.
6. The counsel for the respondent Nos.1 to 3 through their counter affidavit primarily contends the 6 W.P.(C) No. 46752 of 2025 2026:KER:22158 maintainability of the writ petition under Article 226 of the Constitution of India. It is submitted that the petitioners have produced Ext.Nos.P3, P21 demand notices and Ext.Nos.P22, P23 auction notices issued by the respondents to them with respect to various loan facilities extended, however, numerous writ petitions stand already filed challenging the same. Hence, prayed that the present petition is devoid of any merits without a cause of action to invoke the jurisdiction of Art 226 of the Constitution of India. It also attracts the bar under the principles of res judicata as well as constructive res judicata taking into note the earlier litigations instituted and the judgments binding the petitioners, warranting the dismissal of the present writ petition.
7. Heard the counsel on both sides.
8. As far as obtaining the protection conferred 7 W.P.(C) No. 46752 of 2025 2026:KER:22158 under the revival framework of MSMED Act is concerned, the petitioners herein failed to adhere to the guidelines as held by the hon'ble Supreme Court in Pro Knits (supra). Relevant paragraphs of the above dictum read as follows: -
"16. We may hasten to add that under the "Framework for Revival and Rehabilitation of MSMEs", the banks or creditors are required to identify the incipient stress in the account of the Micro, Small and Medium Enterprises, before their accounts turn into non- performing assets, by creating three sub-categories under the "Special Mention Account" Category. However, while creating such sub-categories, the Banks must have some authenticated and verifiable material with them as produced by the concerned MSME to show that loan account is of a Micro, Small and Medium Enterprise, classified and registered as such under the MSMED Act. The said Framework also enables the Micro, Small or Medium Enterprise to voluntarily initiate the proceedings under the said Framework, by filing an application along with the affidavit of an authorized person. Therefore, the stage of identification of incipient stress in the loan account of MSMEs and categorization under the Special Mention Account category, before the loan account of MSME turns into NPA is a very crucial stage, and therefore it would be incumbent on the part of the concerned MSME also to produce authenticated and 8 W.P.(C) No. 46752 of 2025 2026:KER:22158 verifiable documents/material for substantiating its claim of being MSME, before its account is classified as NPA. If that is not done, and once the account is classified as NPA, the banks i.e., secured creditors would be entitled to take the recourse to Chapter III of the SARFAESI Act for enforcement of security interest.
17. It is also pertinent to note that sufficient safeguards have been provided under the said Chapter for safeguarding the interest of the Defaulters-Borrowers for giving them opportunities to discharge their debt. However, if at the stage of classification of the loan account of the borrower as NPA, the borrower does not bring to the notice of the concerned bank/creditor that it is a Micro, Small or Medium Enterprise under the MSMED Act and if such an Enterprise allows the entire process for enforcement of security interest under the SARFAESI Act to be over, or it having challenged such action of the concerned bank/creditor in the court of law/tribunal and having failed, such an enterprise could not be permitted to misuse the process of law for thwarting the actions taken under the SARFAESI Act by raising the plea of being an MSME at a belated stage. Suffice it to say, when it is mandatory or obligatory on the part of the Banks to follow the Instructions/Directions issued by the Central Government and the Reserve Bank of India with regard to the Framework for Revival and Rehabilitation of MSMEs, it would be equally incumbent on the part of the concerned MSMEs to be vigilant enough to follow the process laid down under the said Framework, and bring to the notice 9 W.P.(C) No. 46752 of 2025 2026:KER:22158 of the concerned Banks, by producing authenticated and verifiable documents/material to show its eligibility to get the benefit of the said Framework."
9. A division Bench of this Court in P.K. Krishnakumar v. IndusInd Bank, [2024 (6) KLT 606] had also stated that MSMEs cannot later assert benefits, if they did not notify the banks before classification as NPA thereby stressing the obligation incumbent upon the concerned MSMEs for notifying the Banks regarding the MSME status in order to obtain the benefits attached thereto, before the NPA classification is effected. Relevant extract from the above dictum is as follows: -
"19. xxx xxxx xxxx xxxx xxxxx xxxxx In cases where a borrower who qualifies as MSME does not initially raise its status to challenge a bank's recovery proceedings under the SARFAESI Act but instead participates fully in the process without objection, cannot later use their MSME status to argue that the proceedings were without jurisdiction. The power of the High Court under Article 226 of the Constitution of 10 W.P.(C) No. 46752 of 2025 2026:KER:22158 India is discretionary based on the principles of fairness and justice, which include examining the conduct of the parties involved. When the Appellants, by their actions, accepted the Bank's authority without objection, the High Court will refuse to exercise its writ jurisdiction to assist such Appellants, even if there are questions about the jurisdiction of the Bank. This is because the Appellants' own conduct disqualifies them from claiming such relief. When the High Court declines to interfere in such circumstances, it does not mean that the Appellants' waiver vested the Bank with jurisdiction, assuming it is inherently lacking; it means that the borrower is not entitled to invoke writ jurisdiction irrespective of whether the Bank's actions are without jurisdiction or not. These two concepts are distinct, and the distinction is emphasized by the Hon'ble Supreme Court in the case of M/s. Pro Knit."
10. In a recent judgment of the hon'ble Supreme court in Shri Shri Swami (supra), the dictum was as follows: -
"6. XX xxxx xxxx We would read and interpret the seemingly confusing terms of the Framework harmoniously to ensure that a right under the MSME Act is not destroyed by the SARFAESI Act or vice versa. In our reading, the terms of the Framework do not prohibit the lending bank / secured creditor (assuming that it has no conscious knowledge that the defaulting borrower is an MSME) to classify the 11 W.P.(C) No. 46752 of 2025 2026:KER:22158 account of the defaulting MSME as NPA and to even issue the demand notice under S.13(2) of the SARFAESI Act without such identification of incipient stress in the account of the defaulting borrower (MSME); however, upon receipt of the demand notice, if such borrower in its response under S.13(3A) of the SARFAESI Act asserts that it an MSME and claims the benefit of the Framework citing reasons supported by an affidavit, the lending bank/secured creditor would then be mandatorily bound to look into such claim keeping further action under the SARFAESI Act in abeyance; and, should the claim be found to be worthy of acceptance within the framework of the Framework, to act in terms thereof for securing revival and rehabilitation of the defaulting borrower.
7. As has been noted above, the petitioning enterprise does not seem to have ever claimed the benefit of the terms of the Framework after the demand notice under s.13(2) of the SARFAESI Act was issued. It is at the stage of compliance with an order passed by the relevant Magistrate under s.14 of the SARFAESI Act that this writ petition has been presented before this Court claiming benefits of the Framework to restrain the respondent no.2 and its officers from proceeding further under the SARFAESI Act and other enactments except in the manner contemplated under the said Notification. We find the bona fides of the petitioning enterprise to be suspect.12 W.P.(C) No. 46752 of 2025
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8. Pro Knits is a decision of a coordinate Bench of this Court holding, inter alia, that the Notification is binding on the lending banks / secured creditors. Finding to the contrary by the High Court of Bombay in the judgment and order under challenge in the appeal was, thus, quashed. Though while stressing that the terms of the Framework need to be followed by the lending banks / secured creditors before the account of an MSME is classified as NPA, this decision also lays stress on the obligation of the MSMEs by holding that "it would be equally incumbent on the part of the MSMEs concerned to be vigilant enough to follow the process laid down under the said Framework, and bring to the notice of the Banks concerned, by producing authenticated and verifiable documents/material to show its eligibility to get the benefit of the said Framework". It was cautioned that "if such an Enterprise allows the entire process for enforcement of security interest under the SARFAESI Act to be over, or it having challenged such action of the bank / creditor concerned in the court of law/tribunal and having failed, such an Enterprise could not be permitted to misuse the process of law for thwarting the actions taken under the SARFAESI Act by raising the plea of being an MSME at a belated stage". This decision, however, left unsaid something which we have explained hereinabove while construing the terms consistently to prevent undermining the rights that one central enactment 13 W.P.(C) No. 46752 of 2025 2026:KER:22158 confers by another. xx xxx"
11. In M.D. Esthappan Infrastructure Pvt Ltd. and Ors. V. Reserve Bank of India and Ors., reported in (2025 KHC Online 2176), the question of claiming protection under the MSME framework was inter alia dealt with, and this Court while dismissing the same, rejected the argument that the MSME classification, itself, precludes NPA classification or recovery action and held that it is due to the inaction on the part of the petitioners that no timely steps were taken to activate the revival mechanism. This view was later affirmed by a Division Bench of this Court which held that a borrower who fails to notify the Bank of their MSME status prior to the loan's classification as NPA cannot subsequently invalidate the proceedings under the SARFAESI Act based on that belated claim. Citing the law laid down in Pro Knits (supra), this Court held that such delayed 14 W.P.(C) No. 46752 of 2025 2026:KER:22158 assertion is precluded, emphasizing that borrowers cannot remain passive throughout the recovery process and then attempt to revive lapsed remedies at a convenient stage later. Therefore, a delayed claim of MSME status is unacceptable if the borrower fails to inform the bank in time or takes steps to initiate the necessary corrective action mechanism.
12. In view of the law laid down by the hon'ble Apex Court in Pro Knits (supra) and that laid down by the Division Bench of this Court in P.K. Krishnakumar(supra) and by the Single Bench of this court in M.D. Esthappan (supra), if, at the stage prior to the classification of the loan accounts as NPA, the borrowers do not bring to the notice of the Bank that it is an MSME and allow the proceedings under the SARFAESI Act to go through, then they will be precluded from raising it at a belated stage. A combined reading of these judgments along with 15 W.P.(C) No. 46752 of 2025 2026:KER:22158 that of Shri Shri Swami Samarth (supra), made the position more clarified that MSME Framework provisions must be read harmoniously wherein both Banks and MSMEs have complementary obligations regarding obtaining the benefits associated with the said Framework.
13. In the present case, though Ext P3 demand notice dated 24.04.2024 issued by the respondents was replied to by letter dated 04.06.2024, the petitioners had not expressly claimed the benefit of the notification dated 29.5.2015 under the MSMED Act in the said letter. Instead, they had proposed a repayment plan for restructuring alone. In the said letter, it was also specifically stated that the Division Manager, Canara Bank, by letter dated 08.05.2024, had already requested the petitioners to submit necessary documents for considering restructuring and that they are earnestly pursuing the same. In reply to the same, the 16 W.P.(C) No. 46752 of 2025 2026:KER:22158 Bank had again sent a letter dated 15.06.2024, wherein it was stated that although the petitioners were asked to produce authenticated/ verifiable materials to prove their status of MSME, the petitioners had not provided the same. Hence, this inaction on the part of the petitioners in providing relevant documents to substantiate their MSME status reveals the fact that they had failed to discharge their obligation to become eligible for claiming the protection and revival benefits under the MSMED Act.
14. Regarding the reliefs sought touching the question of legality of simultaneous proceedings instituted by the respondent bank, in M/s. Transcore v. Union of India, (AIR 2007 SC 712), the hon'ble Supreme Court had upheld the legality of concurrent proceedings initiated under both the SARFAESI and RDB Acts, emphasizing that the principle of doctrine of 17 W.P.(C) No. 46752 of 2025 2026:KER:22158 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.
15. A learned Single Judge of this Court in M.D. Esthappan (supra), had also reiterated the permissibility of simultaneous proceedings under both the SARFAESI as well as the RDB 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 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 18 W.P.(C) No. 46752 of 2025 2026:KER:22158 remedy. The NPA Act provides a non-adjudicatory mechanism for enforcing the security interest created by the borrower in favour of the bank/FI, 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."
16. Hence, the contentions mooted by the counsel for the petitioners questioning the legality of parallel proceedings 19 W.P.(C) No. 46752 of 2025 2026:KER:22158 under SARFAESI as well as the RDB Acts 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 M/s Transcore (supra) and in M.D. Esthappan Infrastructure (supra).
17. A further argument by the counsel that the judgments in Pro Knits (supra) and Shri Shri Swami Samarth (supra), are wrongly decided, otherwise, is rendered per incuriam and sub silentio, also cannot be accepted. In Bajaj Alliance General Insurance Co. Ltd. v. Rambha Devu [2025) 3 SCC 95], the hon'ble apex Court had emphasized that the doctrine of per incuriam allows a decision to be disregarded only when it demonstrably fails to consider a binding statutory provision or authoritative precedent that would have necessarily led to a different outcome. This principle is confined to the ratio 20 W.P.(C) No. 46752 of 2025 2026:KER:22158 decidendi and does not apply to obiter dicta.
18. A perusal of Article 141 of the Constitution of India reads as follows: -
"Article 141. Law declared by Supreme Court to be binding on all courts.
The law declared by the Supreme Court shall be binding on all courts within the territory of India."
19. Under the Doctrine of Precedent enshrined in Article 141 of the Constitution of India, the law declared by the Supreme Court is binding on all courts within the country, including the High Courts and subordinate judiciary. This constitutional mandate ensures that the law of the land remains uniform and certain, requiring lower courts to strictly follow the ratio decidendi established by the Apex Court. While the Supreme Court is not bound by its own previous rulings and may overrule them to correct errors or adapt to societal changes, all 21 W.P.(C) No. 46752 of 2025 2026:KER:22158 other judicial bodies are duty-bound to apply its precedents. Even the obiter dicta, or incidental observations made by the Supreme Court, carry significant persuasive authority. Thus, given this, the contentions mooted by the petitioners challenging the binding nature of the judgments in Pro Knits (supra) and Shri Shri Swami Samarth (supra) also goes in vain as it holds strong binding authority on all other Courts and Tribunals within the territory of India.
20. On perusal of records, it is noted that the Ext.P3 demand notice was previously the subject matter in Ext.P20 judgment, where it was produced as Ext.P7. Regarding Ext.P21 demand notice, the petitioners have challenged it through W.P (C) 44635/2025, which remains pending before this Court. Furthermore, Ext.P22 auction notice failed to attract any bidders, resulting in no surviving cause of action. Finally, the dispute 22 W.P.(C) No. 46752 of 2025 2026:KER:22158 surrounding the Ext.P23 auction notice was fully adjudicated by this Court in WP(C) 13154/2025, attaining finality via Exhibit R3(a) dated 17/10/2025.
21. Due to defaults in the accounts maintained by the 2nd petitioner at the Changanacherry Branch, the loans were classified as NPA on 16/04/2014, which compelled the bank to issue Ext.P3 demand notice. The 2nd petitioner subsequently challenged this notice by filing W.P(C) 22497/2024, seeking an installment facility; however, that petition was disposed of as withdrawn via Exhibit R3(b), without granting any liberty to the 2nd petitioner.
22. It is pertinent to note that in W.P(C) 22497/2024, the 2nd petitioner failed to raise any contentions regarding benefits under the MSMED Act, a claim they are now attempting to assert in the present petition. Subsequently, the 2nd petitioner challenged 23 W.P.(C) No. 46752 of 2025 2026:KER:22158 the same demand notice Ext P3 again by filing W.P(C) 39257/2024, seeking eligibility under the MSMED Act based on Ext. P1 Udyam Certificate. This petition was dismissed by this Court via Ext.P20, which held that since the 2nd petitioner had never requested restructuring prior to the account being declared an NPA, they were not entitled to agitate such a claim at this belated stage to thwart SARFAESI proceedings. Although, the 2nd petitioner filed a Review Petition 415/2025, it was ultimately dismissed on 03/04/2025, as evidenced by Exhibit R3(c).
23. Challenging the auction proceedings in respect of the gold pledged by the 1st petitioner from the 3rd respondent, petitioners filed W.P(C) 13154/2025 before this Court. Though the cause of action for filing the present writ petition was based on E-auction notice in the said writ petition, contention regarding the eligibility of the 2nd petitioner as MSME with respect to M/s. 24 W.P.(C) No. 46752 of 2025
2026:KER:22158 Ashok Rubber Factory, was also pleaded to argue that the bank's recovery actions ignored mandatory MSMED Act benefits. Since the pleadings and reliefs sought in the current writ petition are identical to those already adjudicated in W.P(C)13154/2025, the petitioners are legally barred from re-agitating these issues through a fresh cause of action, as the judgment in Ext.R3(a) has already explicitly addressed them.
24. In the light of the aforesaid judgments, as the challenge raised by the petitioners regarding benefit under the MSMED Act claimed in the above writ petition is no more res integra, the present writ petition is an abuse of process of law. Moreover, when WP(C) 44635/2025 filed by the petitioners is pending adjudication before this Court, wherein they have challenged Ext.P21, the attempt made by them in simultaneously filing the current writ petition contending similar facts and 25 W.P.(C) No. 46752 of 2025 2026:KER:22158 prayers, is impermissible as it expressly attracts the statutory bar under res judicata as well as constructive res judicata.
25. The hon'ble Supreme Court in Kalinga Mining Corp. v. Union of India, (2013 5 SCC 252), held that there is ample authority for the proposition that even an erroneous decision on a question of law operates as res judicata between the parties to it. The legal validity or correctness of a judicial decision does not influence its operation as res judicata, rather, a decision rendered by a court of competent jurisdiction remains binding between the parties regardless of whether it is perceived as right or wrong. Such a judgment can only be superseded through procedures such as an appeal to a higher tribunal or a review petition as provided by law. Under the principles of Section 11 of the Code of Civil Procedure, it is the actual decision declaring the rights of the parties rather than the underlying legal reasoning or 26 W.P.(C) No. 46752 of 2025 2026:KER:22158 principles that constitutes res judicata. Consequently, when a matter of fact or law has been directly and substantially at issue and subsequently adjudicated, that decision definitively concludes those rights, irrespective of whether the dispute involved pure points of law or different causes of action.
26. In fact, the legal regime under SARFAESI and the RBI MSME circulars remains unchanged, and the reliefs sought in the current writ petition are substantially identical to those rejected in previous rounds. The Court cannot entertain repetitive litigation simply because a party rephrases their challenge or invokes constitutional provisions that have already been addressed. Therefore, the petitions are barred by res judicata, and the doctrine applies with full force in the present context to prevent multiplicity of proceedings and to uphold the finality of judicial determinations.
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27. The Hon'ble Supreme Court in Celir LLP v. Sumati Prasad Bafna and Ors. (2024 SCC Online SC 3727) went on to hold that where the same set of facts give rise to multiple causes of action, a litigant cannot be permitted to agitate one cause in one proceeding and reserve the other for future litigation. Such fragmentation aggravates the burden of litigation and is impermissible in law. The Court reiterated that all claims and grounds of defence or attack which could and ought to have been raised in earlier proceedings are barred from being re- agitated subsequently. A party must bring forward the entirety of its case in one proceeding and not in a piecemeal or selective manner. Courts must examine whether a matter could and should have been raised earlier, considering the scope of the earlier proceedings and their nexus to the controversy at hand.
28. When the subject matter or seminal issues of a 28 W.P.(C) No. 46752 of 2025 2026:KER:22158 later proceeding are similar or connected to those already adjudicated, the subsequent action constitutes impermissible re- litigation. Once a cause of action has been judicially determined, all fundamental issues related to it are deemed conclusively decided and any attempt to revisit these matters, even through formal distinctions in pleadings violates the principle of finality. Furthermore, any plea or issue raised and subsequently abandoned in earlier proceedings is considered waived and cannot be resurrected.
29. Having regard to the fact that the petitioners neither previously raised their MSME status nor provided authenticated documents to substantiate their claim, as held in Pro Knits(supra), P.K. Krishnakumar(supra), M.D. Esthappan (supra) and Shri Shri Swami Samarth(supra), it is appropriate to hold that they stand estopped from seeking 29 W.P.(C) No. 46752 of 2025 2026:KER:22158 protection and associated benefits under the relevant notification at this late stage, particularly after allowing the SARFAESI proceedings to commence without objection. Also, in view of the judgment in Transcore (supra) and other relevant decisions regarding the legality of parallel proceedings, it is proper to hold that the invoking remedies under SARFAESI as well as the RDB Acts simultaneously, is permissible. As far as the binding nature of Pro Knits (supra) and Shri Shri Swami Samarth (supra) is concerned, the dictum laid down by the hon'ble supreme court in these decisions must be observed by all the other courts and Tribunals as per Article 141 of the Constitution of India.
30. As regards the challenges made against the SARFAESI proceedings, it is well established that the petitioners have already instituted number of writ petitions disputing the same, and the contentions and reliefs sought by them in the 30 W.P.(C) No. 46752 of 2025 2026:KER:22158 current writ petition is expressly barred by res judicata and constructive res judicata owing to the similarity in facts and prayers found in the earlier litigations. The current petition is devoid of any merits and is nothing but an abuse of process of law as this Court finds no valid grounds to invoke the jurisdiction of Article 226 of the Constitution of India. Hence, the petitioners are not entitled for any indulgence of this Court.
Given the above reasoning, I am not inclined to grant any reliefs sought by the petitioners and therefore, this writ petition stands dismissed.
Sd/-
BASANT BALAJI, JUDGE dl/ 31 W.P.(C) No. 46752 of 2025 2026:KER:22158 APPENDIX OF WP(C) NO. 46752 OF 2025 PETITIONER EXHIBITS Exhibit P1 A COPY OF THE UDYAM CERTIFICATE NO. UDYAM-KL-07- 0012749 DATED 17.06.2022, ISSUED TO THE PETITIONER NO. 1 BY THE MSME MINISTRY, GOVERNMENT OF INDIA Exhibit P2 A COPY OF THE UDYAM CERTIFICATE NO. UDYAM-KL-07- 0004707 DATED 16.04.2021, ISSUED TO THE PETITIONER NO. 2 BY THE MSME MINISTRY, GOVERNMENT OF INDIA Exhibit P3 A COPY OF THE 13(2) DEMAND NOTICE DATED 24.04.2024 ISSUED BY RESPONDENT NO.3, Exhibit P4 TRUE COPY OF THE REPLY DATED 04/06/2024 BY THE 2ND PETITIONER TO THE RESPONDENT NO.3, Exhibit P5 TRUE COPY OF THE LETTER DATED 15/06/2024 BY THE 3RD RESPONDENT TO THE 2ND PETITIONER, Exhibit P6 A COPY OF THE REPRESENTATION DATED 13/09/2024 SUBMITTED BY THE 1ST PETITIONER Exhibit P7 A COPY OF THE REPRESENTATION DATED 19/02/2025 SUBMITTED BY THE 1ST PETITIONER Exhibit P8 A COPY OF THE REPRESENTATION DATED 31/01/2024 SUBMITTED BY THE 2ND PETITIONER Exhibit P9 A COPY OF THE JUDGMENT DATED 01.08.2024 IN SLP 7898/ 2024 OF THE SUPREME COURT [IN THE MATTER OF M/S. PRO KNITS V. THE BOARD OF DIRECTORS OF CANARA BANK & ORS.] Exhibit P10 A COPY OF THE MSME NOTIFICATION NO. S.O.1432 (E) DATED 29.05.2015, ISSUED BY THE MSME MINISTRY, GOVERNMENT OF INDIA, Exhibit P11 A 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 P12 A COPY OF THE RBI NOTIFICATION RPCD.NO. PL NFS.BC.57/06.04.01/2001-2002- DATED 16.01.2002 Exhibit P13 A COPY OF THE RBI NOTIFICATION DBOD.BP.BC.NO.
34/21.04.132/2005-06- DATED 8.9.2005 Exhibit P14 A COPY OF THE RBI NOTIFICATION RBI/2012-13/156 DATED 01.08.2012 Exhibit P15 A COPY OF THE JUDGEMENT DATED 01.05.2023 PASSED BY SUPREME COURT IN CIVIL APPEAL NO.6662/2022, KOTAK MAHINDRA BANK LTD V. GIRNAR CORRUGATORS PVT. LTD &ORS Exhibit P16 TRUE COPY OF THE JUDGMENT IN WRIT PETITION NO.
30885/2024, SARK SPICE V. RBI DATED 22/11/2024 OF THIS HONOURABLE COURT 32 W.P.(C) No. 46752 of 2025 2026:KER:22158 Exhibit P17 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 P18 TRUE COPY OF THE COMMON JUDGMENT IN THE 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 P19 A COPY OF THE JUDGMENT DATED 07/11/2024 IN WRIT APPEAL NO.1728/2024 PK KRISHNAKUMAR V INDUSIND BANK &ORS Exhibit P20 A COPY OF THE JUDGMENT DATED 28.02.2025 IN W.P.(C) NO. 39257/2024 M/S ASHOK RUBBER FACTORY V. RESERVE BANK OF INDIA & OTHERS) Exhibit P21 A COPY OF THE DEMAND NOTICE DATED 30/10/2025 BY THE RESPONDENT BANK TO THE PETITIONERS Exhibit P22 A COPY OF THE FINAL REMINDER CUM AUCTION NOTICE DATED 16/06/2025 BY THE RESPONDENT BANK TO THE 1ST PETITIONER FOR RS.3,33,800/- (WRONGLY SHOWN AS RS.3338000/-) Exhibit P23 A COPY OF THE FINAL REMINDER CUM AUCTION NOTICE DATED 30/06/2025 BY THE RESPONDENT BANK TO THE 1ST PETITIONER, FOR RS.3,60,000/-
Exhibit P24 A TRUE COPY OF THE JUDGEMENT OF THE SUPREME COURT DATED 28/07/2025 IN WPC 684/2025 [IN SHRI SHRI SAMARTH CONSTRUCTION & FINANCE SOLUTION V. THE BOARD OF DIRECTORS OF NKGSB BANK LTD. & ORS.] Exhibit P25 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 P26 A 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 P27 A COPY OF THE ORDER OF THE NCLT MUMBAI IN CP(IB) NO.3025(MB) OF 2019 Exhibit P28 A COPY OF THE ORDER OF NCLT-I, MUMBAI, PASSED IN CP(IB) NO.845(MB) OF 2022 33 W.P.(C) No. 46752 of 2025 2026:KER:22158 RESPONDENT EXHIBITS Exhibit-R3 (a) True copy of the judgment dated 17/10/2025 in W.P.(C) 13154 of 2025 passed by this Hon ble Court. Exhibit-R3 (b) True copy of the judgment dated 01/10/2024 in W.P.(C) 22497 of 2024 of this Honble Court Exhibit-R3 (c) True copy of the judgment dated 03/04/2025 in R.P. 415 of 2025 passed by this Honble Court PETITIONER EXHIBITS Exhibit P29 A TRUE COPY OF THE SALE NOTICE DATED 22.01.2026 ISSUED BY THE 3RD RESPONDENT