TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 55
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....tances and in view of the above facts, it is deemed that the borrower concern has not satisfactory cause to submit against the Bank's grounds for classifying their account as fraudulent. Accordingly, by reiterating the RBI Master Direction and Hon'ble High Court of Madras order dated 19.12.2023, no proper reply submitted for the findings in the Forensic audit report even after providing the personal hearing, the Bank determines M/s.Kirubha Exports, its proprietrix Mrs.V.T.Kirubha and the guarantor Mr.A.Vimal Kumar as Frauds." 2. The specific case of the petitioner is that the petitioner is engaged in cashew nut processing unit and that on account of various factors such as imposition of customs duty, demonetization of currencies ....
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....025. However, there were no bidders and therefore a fresh auction may be held. However, it is submitted that since the procedure prescribed under the aforesaid MSME notification was not followed, the impugned communication of the fourth respondent declaring the petitioner's account as fraudulent is liable to be interfered with. 5. Opposing the prayer, the learned Standing Counsel for the respondents submits that the declaration of the petitioner's account and the guarantors account as fraudulent is in accordance with the RBI circular dated 15th July 2024 bearing reference RBI/DOS/2024-25/118 DOS.CO.FMG.SEC.No.5/23.04.001/2024-25. It is submitted that since the petitioner is in arrears of over 18,65,95,374/- as on 01.07.2025 sale ....
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.... Court has observed as under: "8. Pro-Knits:(supra) is a decision of a coordinate Bench of this Court holding inter alla, that the Notification is binding on the lending banks/secured creditors. Finding to the contrary by the High Court of Bombay in the judgment and order under challenge in the appeal was, thus, quashed. Though while stressing that the terms of the FRAMEWORK need to be followed by the lending banks/secured creditors before the account of an MSME is classified as NPA, this decision also lays stress on the obligation of the MSMEs by holding that "it would be equally incumbent on the part of the MSMES concerned to be vigilant enough to follow the process laid down under the said Framework, and bring to the notice of t....
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....ion the property on 5th August 2025 which also did not fructify. By way of rejoinder the learned counsel for the petitioner on the other hand, would submit that the petitioner was issued with the show cause notice dated 16.09.2023 to which the petitioner has replied on 15.11.2023. That apart it is submitted that the show cause notice itself was issued in the backdrop of the order dated 20.02.2023 by the bank wherein there were indications that the petitioner was a MSME and therefore it was incumbent on the part of the respondent to have comply with the framework under S.O.1432 (E) dated 29.05.2015 of the Ministry of Micro, Small and Medium Enterprises. It is submitted that since the bank has failed to comply with the above stipulation in th....
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....ependently. As long as the RBI circular dated 15th July 2024 is in force, the petitioner cannot have any case to question the declaration of the petitioner's account as fraudulent as the purpose for which the said circular has been issued was to provide a framework to the bank for prevention, early detection and timely reporting of incidents of fraud to Law Enforcement Agency (LEAs), Reserve Bank of India (RBI) and NABARD and dissemination of the information by RBI and the matter is connected therewith or incidental thereto as has been stated in para 1.3 of the RBI circular/instruction dated 15.07.2025 bearing reference RBI/DOS/2024-25/118 DOS.CO.FMG.SEC.No.5/23.04.001/2024-25. "1.3 Purpose These Directions are issued ....