This is a short order in an application for interim relief to restrain a bank from enforcing possession. The court examined RBI guidelines on asset restructuring and found no prima facie case.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
27/12/2023 |
Ex. No. |
Before Presiding Officer Dr. Rekha G. Dhakar, DRT-1, Mumbai. Order in IA No. 3521/2023 in SA 247 of 2023 Eagle Steel Rolling Mills Pvt Ltd Vs Canara Bank |
Next date |
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| D | R | T1 MUMBA Advocate Sanjay Dubey, Zulfiq Multani appeared for the Applicant. Advocate appeared for the Respondent. IA No. 3521/2023 1. By way of the present IA the Applicant is praying to restrain the Respondent from taking coercive steps in pursuance to the auction dated 11.08.2023 for sale of land and building Immovable property being: All that piece and parcel of the land and building under Plot No. C-4/1 and Plot No. C-24, Taloja Industrial Estate within the Village limits of Navade, Admeasuring 12530 Sq.mtrs., situated within the Registration District of Raigad and Sub District of Panvel and within the limits of Maharashtra Industrial Development Corporation owned by M/s Eagle Steel Rolling Mills Private Limited. (hereinafter referred to as “Property in question for immovable property”), Plant and Machineries at Plot No. C-4/1 and Plot |
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| No. C-24, Taloja Industrial Estate within the Village limits of Navade, Admeasuring 12530 Sq.mtrs., situated within the Registration District of Raigad and Sub District of Panvel |
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| DRT1 MUMBAI and within the limits of Maharashtra Industrial Development Corporation owned by M/s Eagle Steel Rolling Mills Private Limited (hereinafter referred to as “the property in question for moveable property”); auction notice dated 06.12.2023 for sale of plant and machinery movable properties, including proceeding with auction scheduled on 11.01.2024; and impugned Possession Warrant dated 11.12.2023 including proceeding for forceful possession of the immovable property as well as movable property on 27.12.2023. 2. Ld. Counsel for the Applicant submits that the Respondent has wrongly classified the account as NPA on 30.08.2021 which was communicated vide a defective demand notice dated 28.02.2023. He submits that the account was restructured on 24.12.2021 and further, the Respondent has regularised the account however, despite regularisation, the Respondent wrongly classified the account as NPA on 30.08.2021, thus, he prayed that the |
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| Respondent may be restrained from taking any coversvie steps against the Applicant. |
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| T1 MUMBAI 3. On the other hand, Ld. Counsel for the Respondent strongly objected on the present IA as well as on the maintainability of the present SA. He submits that in the earlier SA, this Tribunal has already extended time for taking possession i.e. after 14/12/2023 therefore, she submits the present SA is filed to avoid the said order passed by this Tribunal. She also seeks time for filing reply on the present SA as well as on pending IA. 4. Heard the rival contention of the parties and perused the record. 5. The Applicant has raised an objection that the account was restructured on 24.12.2021 however, the account was classified as NPA on 30.08.2021 thus, the |
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| D | declaration of the account as NPA on 30.08.2021, is bad in law. 6. Admittedly, the account was declared as NPA on 30.08.2021 however, the account was restructured on 24.12.2021. The RBI Guidelines dated 04.07.2017 provided that when the account is restructured then it could |
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| become a sub standard account. The relevant guidelines are extracted herein below: |
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| “2.2.7.2 The accounts classified as |
| 'standard assets' should be |
| immediately re-classified as |
| I 'sub-standard assets' upon restructuring. |
| BA 2.2.7.3 The non performing assets, upon restructuring, would slip |
| DRT1 MUM into further lower asset classification category as per extant asset classification norms with reference to the pre-restructuring repayment schedule.” (emphasis provided) 7. Therefore, as per Prudential guidelines 2.2.7.3, the NPA upon restructuring would slip into further lower asset classification thus, the objection of the Applicant that the account was wrongly declared as NPA on 30.08.2021 has no substance. |
| 8. In so far as objection pertaining to the demand notice is concerned, Ld. Counsel for the Respondent is seeking time for filing reply on the same therefore, the prayer for reply by |
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| the Respondent is allowed. The said issue would be decided after the reply of the Respondent. |
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| DRT1 MUMBAI 9. Thus,prima facie, no case made out for interim relief therefore, the present IA is hereby dismissed. P.O. DRT-I Tjs/-42 |
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2 issues framed by the court
Whether the applicant is entitled to an interim stay on coercive steps and forceful possession taken by the bank.
Whether the classification of the account as NPA prior to restructuring is illegal under RBI guidelines.
1 provisions across 1 enactments
Eagle Steel Rolling Mills Pvt Ltd
Canara Bank
Dr. Rekha G. Dhakar
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
