NPA classification under SARFAESI upheld where the bank gave reasons and no arbitrary action was shown.

Bank classification of an account as NPA under the SARFAESI framework was upheld where default was established and minor discrepancies in dates were treated as immaterial. The bank's reply to the borrower's objections contained reasons for rejecting the representation, and no material showed arbitrary action or non-compliance with statutory requirements warranting writ interference. RBI guidelines were treated as executive instructions rather than enforceable constraints on the action taken in these facts. The availability of remedies within the SARFAESI mechanism also weighed against intervention, and the challenge to the NPA declaration and related notices failed.

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Issues: Whether the bank's classification of the account as a non-performing asset and the notices issued under the SARFAESI Act were liable to be quashed for alleged non-compliance with RBI guidelines and for inadequate consideration of the borrower's objections.

Analysis: The account was found to have been declared NPA on the basis of the borrower's default, and the discrepancy in the dates mentioned in the papers was treated as immaterial. The bank's reply to the borrower's representation recorded reasons for non-acceptance, and the Court found no material to show arbitrary classification or violation of statutory requirements warranting interference in writ jurisdiction. The RBI guidelines relied upon were treated as executive instructions, and in the facts of the case the bank was held to have sufficiently explained its action. The availability of remedies under the SARFAESI framework also weighed against interference at this stage.

Conclusion: The challenge to the NPA classification and the SARFAESI notices failed, and the writ petition was dismissed.

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