Anil Kumar G. v. State Bank of India

2025:KER:28043 **==> picture [58 x 57] intentionally omitted <==** W.A.No.2114 of 2024 1 **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE THE CHIEF JUSTICE MR. NITIN JAMDAR** **&** **THE HONOURABLE MR. JUSTICE S.MANU** **TUESDAY, THE 25[TH] DAY OF MARCH 2025 / 4TH CHAITHRA, 1947** **WA NO. 2114 OF 2024** **AGAINST THE JUDGMENT DATED 03.10.2024 IN WP(C) NO.29742 OF 2024 OF HIGH COURT OF KERALA** ## **APPELLANT/PETITIONER IN W.P.(C):** **ANIL KUMAR G., AGED 44 YEARS S/O. GOPINATHAN PILLAI, SOLE PROPRIETOR OF SANTHAS BEVERAGES, ANITHA BHAVAN KOTTARAKKARA, KOLLAM, KERALA, PIN – 695108.** **BY ADVS. B.J.JOHN PRAKASH P.PRAMEL SOORAJ M.S. VARSHA VIJAYAKUMAR NAIR MANU BABY RAJASREE** ## **RESPONDENT/RESPONDENT IN W.P.(C):** **STATE BANK OF INDIA, REPRESENTED BY AUTHORISED OFFICER, RSARB, LMS COMPOUND, OPP.MUSEUM WEST GATE, VIKAS BHAVAN P.O., THIRUVANANTHAPURAM, KERALA, PIN – 695033.** **SRI.JITHESH MENON, SC, SBI SRI.TOM K.THOMAS** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 25.03.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **==> picture [58 x 57] intentionally omitted <==** 2025:KER:28043 W.A.No.2114 of 2024 2 NITIN JAMDAR, C.J. & S.MANU, J. -------------------------------------------------- W.A.No.2114 of 2024 ------------------------------------------------Dated this the 25[th] day of March, 2025 ## JUDGMENT ## S.MANU, J. Appellant is the Petitioner in W.P.(C)No.29742/2024. In the writ petition, the Appellant sought a direction to the Respondent Bank to recall the classification of the Appellant's account as NPA and forward the accounts to the committee constituted under Ext.P3 circular of the Reserve Bank of India for devising a corrective action plan. A further direction to carry out a techno-viability study was also sought to explore the possibility of rectification and restructuring of the Appellant's account. A direction to recall all recovery measures was also sought. The reliefs were sought on the premise that the Appellant's establishment comes under the category of Micro, Small and Medium Enterprises (MSME) entitled to the benefits under the Master Circular issued by the Reserve Bank of India, in tune with the Framework for Revival and Rehabilitation of MSMEs notified by the 2025:KER:28043 W.A.No.2114 of 2024 3 **==> picture [58 x 57] intentionally omitted <==** Ministry of Micro, Small and Medium Enterprises, Government of India. 2. The Respondent Bank resisted the writ petition and filed a detailed counter affidavit. The Bank contended that the writ petition was not maintainable and that the proper remedy was to approach the Debts Recovery Tribunal. The Bank stated that the account of the Appellant was classified as a problem loan account-SMA 1 from 1 February 2023, as SMA 2 from 3 March 2023 and as SMA 3 from 2 April 2023. Thereafter, the account was referred to the Committee for Revival and Rehabilitation of MSME units in compliance with the guidelines issued by the Reserve Bank of India. Proceedings of the Committee dated 29 April 2023 was produced along with the counter affidavit. The Appellant could not make payments as per the suggestions of the Committee and hence the account was classified as NPA on 29 May 2023. The Bank pointed out that the Appellant had suppressed the reference to the Committee, suggestions made by the Committee and the failure of the Appellant to adhere to those suggestions in the writ petition. The Bank pointed out that a total amount of 1,43,82,224/- was outstanding at the time when the₹ counter affidavit was filed. 2025:KER:28043 W.A.No.2114 of 2024 4 **==> picture [58 x 57] intentionally omitted <==** 3. The learned Single Judge dismissed the writ petition holding that it was open to the Appellant to raise the contentions based on its supposed status as an MSME before the DRT under Section 17 of the SARFAESI Act and hence the writ petition was not an appropriate remedy. In this appeal, the learned counsel for the Appellant contended that the learned Single Judge failed to appreciate that the classification of the Appellant's account as NPA was done without following the due procedure. The learned counsel further contended that the Master Circular issued by the Reserve Bank of India has a statutory flavour and its violation was a sufficient reason for invoking the writ jurisdiction. It was also contended that such a contention is not a matter that can be agitated before the DRT under Section 17 of the SARFAESI Act. Entire pleadings in the appeal and arguments were based on the premise that the Bank had not followed the Master Circular issued by the RBI. 4. The learned Standing Counsel for the Bank contended that the Bank had followed the procedure as contemplated under the Master Circular and that the Appellant had suppressed material facts. He referred to the counter affidavit of the Bank and also to the proceedings 2025:KER:28043 W.A.No.2114 of 2024 5 **==> picture [58 x 57] intentionally omitted <==** of the Committee for Revival and Rehabilitation of MSMEs, which considered the issue of the Appellant. He invited our attention to the copy of the proceedings produced as Ext.R1(a), which shows that on 29 April 2023, a meeting of the Committee was conducted and the Appellant had also participated in the meeting. The Committee persuaded the Appellant to remit a minimum amount of 50,000/- to₹ avoid slippage of the account, so that more time could be provided. However, the Appellant did not make the payment as suggested. Learned Standing Counsel submitted that the Appellant had not even mentioned about the reference to the Committee, the meeting held on 29 April 2023 and the suggestions made by the Committee in the pleadings of the writ petition as well as in this appeal. He therefore contended that the Appellant is guilty of suppression of material facts. 5. We find considerable merit in the submission of the learned Standing Counsel for the Bank that material facts have been suppressed by the Appellant. The entire case is made up on the substratum of alleged non-compliance with the guidelines issued by the RBI regarding MSMEs. However, it is evident from Ext.R1(a) that a reference was made to the Committee by the Bank before classifying the account as NPA. Appellant had participated in the meeting of the 2025:KER:28043 W.A.No.2114 of 2024 6 **==> picture [58 x 57] intentionally omitted <==** Committee held on 29 April 2024. These facts, undoubtedly, are material facts as far as the case of the Appellant is concerned. By not disclosing these facts in his writ petition as well as in this appeal, the Appellant has resorted to the suppression of material facts. 6. In Prestige Lights Ltd. v. State Bank of India[1] , the Hon'ble Supreme Court held as follows:- “ 33. It is thus clear that though the appellant Company had approached the High Court under Article 226 of the Constitution, it had not candidly stated all the facts to the Court. The High Court is exercising discretionary and extraordinary jurisdiction under Article 226 of the Constitution. Over and above, a court of law is also a court of equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the writ court may refuse to entertain the petition and dismiss it without entering into merits of the matter. 34. The object underlying the above principle has been succinctly stated by Scrutton, L.J., in R. v. Kensington Income Tax Commrs. [(1917) 1 KB 486 : 1(2007) 8 SCC 449 2025:KER:28043 W.A.No.2114 of 2024 7 **==> picture [58 x 57] intentionally omitted <==** 86 LJKB 257 : 116 LT 136 (CA)], in the following words: “It has been for many years the rule of the court, and one which it is of the greatest importance to maintain, that when an applicant comes to the court to obtain relief on an ex parte statement he should make a full and fair disclosure of all the material facts—facts, not law. He must not misstate the law if he can help it—the court is supposed to know the law. But it knows nothing about the facts, and the applicant must state fully and fairly the facts, and the penalty by which the court enforces that obligation is that if it finds out that the facts have not been fully and fairly stated to it, the court will set aside, any action which it has taken on the faith of the imperfect statement.” (emphasis supplied) 35. It is well settled that a prerogative remedy is not a matter of course. In exercising extraordinary power, therefore, a writ court will indeed bear in mind the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppresses relevant materials or is otherwise guilty of misleading the court, the court may dismiss the action without adjudicating the matter. The rule has been evolved in larger public interest to deter unscrupulous litigants from abusing the process of court by 2025:KER:28043 W.A.No.2114 of 2024 8 **==> picture [58 x 57] intentionally omitted <==** deceiving it. The very basis of the writ jurisdiction rests in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are suppressed or are distorted, the very functioning of the writ courts would become impossible.” 7. Appellant has not disclosed complete facts and furthermore tried to mislead the Court. As the Appellant resorted to unfair practice of suppressing material facts, we decline to consider his contentions in this appeal. The appeal is hence dismissed. We refrain from imposing exemplary costs on the Appellant, taking note of the precarious financial situation pleaded in the writ petition. 8. Writ Appeal is disposed of as above. Sd/- NITIN JAMDAR CHIEF JUSTICE Sd/- S.MANU JUDGE skj