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Issues: Whether the MSME revival and rehabilitation framework prevented a secured creditor from classifying the borrower's account as non-performing and issuing notice under the SARFAESI regime without first identifying incipient stress, and whether the borrower could invoke that framework for the first time at the stage of action under section 14 of the SARFAESI Act.
Analysis: The framework in the 29 May 2015 notification was read as a whole and harmoniously, so that the sequence of identification by the bank or creditor and identification by the enterprise gave effect to both sides' obligations. The borrower was required to act with vigilance and, where it reasonably apprehended failure of business or inability to pay debts, to initiate the framework by a verified claim. On such invocation, the secured creditor would be bound to consider the request and keep further SARFAESI action in abeyance. However, the framework did not bar the creditor from classifying a defaulting account as non-performing or from issuing notice under section 13(2) where the borrower had not earlier invoked the framework. A claim raised only after notice, and especially at the stage of proceedings under section 14, was treated as a belated attempt to restrain lawful SARFAESI steps. The availability of a statutory remedy under section 17 also weighed against interference under Article 32.
Conclusion: The borrower was not entitled to the claimed protection at the belated stage, and no interference under Article 32 was warranted.
Ratio Decidendi: The MSME revival framework operates on a harmonised scheme of reciprocal obligations: the borrower must timely invoke it with a verified claim, and only then does the secured creditor become bound to consider the claim and hold further SARFAESI action in abeyance; absent such invocation, classification of the account and notice under section 13(2) are not barred, and belated reliance on the framework cannot defeat the SARFAESI process.
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