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11. The position regarding the MSME framework was further clarified in M.D. Esthappan Infrastructure Pvt Ltd. & Ors. v. Reserve Bank of India & Ors. [2025 KHC Online 2176], wherein this Court rejected the contention that MSME classification itself acts as an automatic bar to NPA classification or recovery proceedings. This Court observed that the failure to trigger the revival mechanism was attributable solely to the petitioners' inaction. This principle was subsequently affirmed by the Division Bench, which held that a 2026:KER:3869 borrower who fails to disclose their MSME status prior to an account being classified as an NPA is precluded from subsequently challenging SARFAESI Act proceedings on that basis. Citing the law laid down in Pro Knits (supra), this Court further emphasized that borrowers cannot remain passive throughout the recovery process only to assert lapsed remedies at a belated stage. Consequently, a claim for MSME protection is legally untenable if the borrower fails to notify the bank or invoke the corrective action mechanism within the prescribed timelines. The learned counsel for the respondents also points out that Ext.P13 sanction letter, which the petitioner relied on, shows the rate of interest applicable for non-MSME accounts, which also reveals that the petitioner enterprise is not an MSME.

16. A learned Single Judge of this Court in M.D. Esthappan (supra) had also reiterated the permissibility of simultaneous proceedings under both 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 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.