The Debts Recovery Tribunal dismissed an applicant's review application for exceeding the 30-day limitation period prescribed under DRT Rules. The Court held the petition was not maintainable as it sought de novo appreciation of facts rather than correcting an error on the face of the record.
Review application and all pending IAs dismissed.
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.
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RA 01 of 2025 IOI
DRT,PATN A
Debts Recovery Tribunal, Patna
Presiding Officer: Shri Kaushalendra Yadav
R. A. Case No. 01 of 2025
IArising out of OA Case no. : 72 of 20231
...... Applicants
VS
.. . Respondents / P..d"- TVb)'
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RA 01 of 2025 IOI
DRT,PATN A
Present : For the Applicants Sh. Sanjeev Ranjan, Advocate For the Respondent Sh. Sanjay Singh Thakur, Advocate
Dated: 08.04.2025
ORDER
This Review Application u/r 5A of Debt Recovery Tribunal (Procedures) Rules, 1993 has been filed by the applicant to review the order dated 30.01.2024 passed in the OA 72/2023 by this Tribunal. During pendency review application the applicants have filed Limitation Petition by way of IA 16/2025 with the prayer to condone the delay in filing of review application.
(qIV/a//b :+11g/
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RA 01 of 2025 IOI
DRT,PATNA
applicants by Bank of Baroda in respect of recovery of loan amount, the applicants searched the newspaper Prabhat Khabar and came to know regarding the Recovery Proceeding pending against the applicants. The applicants thereafter contacted the lawyer. Accordingly, the applicants applied for certified copy of order/judgment dated 03.01.2024 before this Tribunal and the same was made available to the applicants on 28.11.2024 by the Registry of this Hon'ble Tribunal and thus, the Review Application filed on 25.12.2024 is well within time from the date the certified copy of the Judgment and Order under review was made available to the applicants.
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RA 01 of 2025 IOI
DRT,PATNA
of the MSMED Act issued a notification dated 29.09.2015 (Annexure - 23 to the Review Application) for revival and rehabilitation of MSMEs unit. Accoringly, the Reserve Bank of India in order to make the said Framework contained in the Notification dated 29.05.2015 issued revised Framework along with the operating Instructions vide the Communication dated 17th March, 2016, addressed to all the Scheduled Commercial Banks (Annexure - 24 to the Review Application) and further issued the master direction [Lending to Micro, Small and Medium Enterprises (MSME) Sector] Directions, 2016," vide the Notification dated 21st July, 2016. The salient features of the Framework of Direction 4.8 are as under:
i) Before a loan account of an MSME turns into a Non Performing Asset (NPA), banks or creditors should identify incipient stress in the account by creating three sub- categories under the Special Mention Account (SMA) category as given in the Framework. ii) Any MSME borrower may also voluntarily initiate proceedings under this Framework.
iii) Committee approach to be adopted for deciding corrective action plan
iv) Time lines have been fixed for taking various decisions under the Framework.”
The applicant no. 1 had applied for financial assistance of Rs. 5 Crore to purchase a factory running in the name and style of M/s Shankar Agrotech and Foods Pvt. Ltd. with plant, machineries and assets of the property which were mortgaged with Bank of India but the respondent bank sanctioned a sum of Rs. 1.25 Crore only for purchase of land, plant and machinery and further an amount of Rs. 25 Lacs towards working capital. Thus, from the very beginning the respondent bank had
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RA 01 of 2025 IOI
DRT,PATN A
underfinanced the project. Despite repeated requests the respondent bank failed to release additional funds and the account of the applicant company was classified as N.P.A. on 31.03.2021.
The respondent bank did not bring to the notice of this Hon'ble Tribunal in Original Application regarding the factum that the unit of the applicant company was an MSME unit
The Hon'ble Supreme Court in case of M/s Pro Knits Vs. the Board of Director of Canara Bank & Ors. [SLP (C) No. 7898 of 2024] (Annexure - 25 to the Review Application) vide Judgment and Order dated 01.08.2024 held in paragraph no. 13 that the notification dated 29.05.2015 and the Master Direction, 2016 issued by the Reserve Bank of India in exercise of power conferred by Section 21 and 35(A) of Banking Regulation Act having statutory force are binding to all scheduled commercial banks license to operate in India by Reserve Bank of India as stated in the said direction. It further went on to hold that prior to classification of accounts of the borrower account (MSME loan account) as non performing assets, the instruction as contained in the framework for revival and rehabilitation of the MSME unit is required to be followed. The said instruction is part of the measures taken for facilitating the promotion and development of MSME and the secured creditors are bound to follow the same before classifying the account of MSME as N.P.A. Further, the banks are required to identify the incipient stress in the account before the account of MSME unit turns into a N.P.A. by creating three-sub categories under special mention account category and therefore, the Hon'ble Supreme Court set aside the very classification of account as N.P.A. as the bank had not undertaken the said exercise before classifying the account as N.P.A of MSME borrower 'c'o'nt. nZ/v
nZ/v &V\ C
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RA 01 of 2025 IOI
DRT,PATN A
In the present case also the respondent bank has not undertaken the exercise as contemplated in the framework for revival and rehabilitation of MSME unit as contained in the instruction / direction which it was required to follow prior to classification of the account of the applicant MSME borrower company loan account as N.P.A., despite the additional factor that there is a favourable Techno Economic Viability Report of a consultant appointed by the bank to report regarding the technical feasibility and financial viability of the unit which was available and still the bank chose to ignore the mandatory and statutory force of the notification which was binding on the respondent bank. Thus, the classification of the account as N.P.A. was in the teeth of the notification dated 29.05.2015 and the Master Direction, 2016 and thus the bank could not have instituted a suit for recovery, if this fact was brought to the notice of this Hon'ble Tribunal and therefore, this Hon'ble Tribunal was misled by the respondent bank in assuming a jurisdictional fact regarding the account being classified as N.P.A. which classification on the face of it is illegal, invalid and contrary to the notification dated 29.05.2015 issued by the Ministry of Micro Small and Medium Enterprises, Government of India.
The applicant company had filed writ petition before the Hon'ble High Court vide CWJC No. 5001 of 2023 with a prayer to quash the letter dated 05.05.2022 as the Hon'ble Patna High Court was only the appropriate forum to decide the question regarding the restructuring / revival of the unit and the illegal action of the respondent bank in rejecting the claim for restructuring / revival of the unit of the applicant company. The Hon'ble Patna High Court vide order dated 13.05.2024 directed the applicant company to raise the issue of revival and rehabilitation before the Hon'ble Debts Recovery Appellate Tribunal as the S.A. No. 133 of 2021 has been decided on 24.06.2023 and the
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RA 01 of 2025 IOI
DRT.PATNA
Hon'ble Debts Recovery Tribunal was directed to consider the grounds raised by the applicant company as raised in the present writ petition and pass a reasoned order. The applicant company assailed the order dated 13.05.2024 passed in CWJC No. 5001 of 2023 before the Hon'ble Supreme Court in Special Leave Petition (Civil) No. 128 of 2024 wherein the Hon'ble Supreme Court vide order dated 09.07.2024 relegated the applicant company to approach Hon'ble Debts Recovery Appellate Tribunal against the order of Hon'ble Debts Recovery Tribunal and the Hon'ble Debts Recovery Appellate Tribunal was directed to consider all the contention which has been sought by the applicant company before the Hon'ble Supreme Court which impliedly meant that the scope and ambit of appeal conferred by Section 18 of the Securitization Act has been enlarged as correctness of the order passed by this Tribunal, subject matter of challenge in the Appeal under Section 18 of the Act, has to be tested in context of challenge on an additional ground not considered by the Tribunal.
The review petition is fit to be granted as the documentary evidence which could affect the exercise of jurisdiction could not be brought by the applicants due to want of proper service of notice and since the applicants were not aware or had knowledge regarding the filing of O.A and therefore, were prevented from producing these documents and if the same was produced before the Tribunal, it would have materially affected the decision of the case which would constitute sufficient reasons as the points raised by the applicants were never agitated or argued resulting in miscarriage of justice which could be corrected only in review jurisdiction..
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RA 01 of 2025 IOI
DRT,PATNA
to condone the delay in filing of Review Application after 30 days as law laid down by the Hon’ble Supreme Court in the case of Standard Chartered Bank Vs. MSTC Limited. Moreover, the publication of notice was made in Prabhat Khabar on 07.09.2024 in RC 07/2024 while the notice was delivered to one Santosh Kumar on 22.07.2024 in RC 07/2024 which is evident from the tracking report filed with reply. The applicant Santosh Kumar had appeared before Ld. Recovery Officer on 21.10.2024 by filing Vakalatnama therefore the applicant cannot take shelter of having no knowledge.
The applicant has failed to point out any error apparent on the face of the record in the order dated 03/01/2024 passed in OA 72/2023. In the garb of Review Application the applicants want to touch the merit of the case to avoid deposit of statutory court fee amount as required to file Appeal against order of Recovery Officer and also wants to reopen the entire case which is already concluded vide order dated 03.01.2024 passed in OA 72/2023.
The applicants are litigating in nature and their SA 133 of 2021 and RA 08/2023 both were dismissed by this Tribunal. Apart from this four separate Writ cases filed before Hon’ble High Court of Patna and two cases were also filed before the Hon’ble State Commission, Patna in respect of the same loan account signifying the present RA to be their ninth case. The only objective of the applicants is to frustrate the recovery process of the Bank.
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RA 01 of 2025 IOI
DRT,PATN A
desires to obtain a review of the order made against him, may apply for a review of the order to the Tribunal which had made the order.
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RA 01 of 2025 IOI
DRT,PATN A
the scope of inquiry under Rule SA. The phrase “mistake or error apparent on the face of record" can’t be construed as de novo reappreciation of facts and evidence .
As such this petition for review is not legally maintainable and dismissed accordingly along with all pending IAs.
Order signed, sealed, dated and pronounced in the open court on this 08TH Day of April, 2025.
Dictated & corrected by me.
u/P:/
L/-o'"**
[KaushalendraYadav] Presiding Officer Debts Recovery Tribunal, Patna
2 issues framed by the court
Whether the review application filed beyond 30 days of the impugned order is maintainable.
Whether the grounds raised relate to appreciation of facts and evidence rather than error apparent on the record.
Colour shows how this judgement treated each authority
M/s Pro Knits Vs. the Board of Director of Canara Bank & Ors.Referred¶43
M/s Pro Knits Vs. the Board of Director of Canara Bank & Ors. [SLP (C) No. 7898 of 2024]
Standard Chartered Bank Vs. MSTC LimitedReferred¶56
Standard Chartered Bank Vs. MSTC Limited
1 provisions across 1 enactments
Kulganga Enterprises Private Limited and Ors.
Bank of Baroda
Kaushalendra Yadav
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
