Indian Bank and Others ...Respondent(s) ********** K INDIRA GOLDA, Advocate(s) for Petitioner(s) CORAM : THE CHIEF JUSTICE DHIRAJ SINGH THAKUR SRI JUSTICE RAVI CHEEMALAPATI DATE : 10th September, 2024. PER DHIRAJ SINGH THAKUR, CJ (Oral): The petitioner challenges the action of the respondent bank invoking the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, "SARFAESI Act") and also challenges the order passed by the Principal Senior Civil JudgecumChief Judicial Magistrate, SPSR Nellore District, dated 16.05.2023, whereby an Advocate Commissioner was appointed for taking over the physical possession of the property belonging to the petitioner, which was an asset secured by the bank for repayment of the loan advanced to the petitioner. 2. Learned counsel for the petitioner challenges the action of the respondents primarily on two grounds. 2 HCJ & RCJ WP_19858_2024 Firstly, on the ground that being an MSME, the subject property of the petitioner could not have been made the subject matter of auction inasmuch as the bank had not followed the mandate of notification bearing number S.O.1432 (E), dated 29.05.2015, issued by the Central Government, in exercise of the powers conferred in terms of Section 9 of the Micro, Small and Medium Enterprises Development Act, 2006 (for short, "MSMED Act"). Secondly, that the Rule 8(6) and Rule 9(1) of the Security Interest (Enforcement) Rules, 2002 (for short, "the Rules") had been violated in issuing the sale notice, dated 22.08.2024, by the respondent bank. 3. Reliance was placed on the Apex Court judgment rendered in the case of M/s. Pro Knits vs. The Board of Directors of Canara Bank and others1 wherein it was held by the Apex Court that the instructions issued by the Central Government dated 29.05.2015, in exercise of powers under Section 9 of the MSMED Act, had statutory force and were binding on all the Scheduled Commercial Banks, licensed to operate by the Reserve Bank of India. In Pro Knits (supra), the Apex court held: "15. What is contemplated in the "Framework for Revival and Rehabilitation of MSMEs" contained in the Instructions/Directions stated hereinabove, is required to be followed prior to the classification of the borrower's account, (in the instant case MSMEs loan account), as NonPerforming Assets. The said Instructions contained in the Notification dated 29.05.2015 as part of 1 2024 SCC OnLine SC 1864 3 HCJ & RCJ WP_19858_2024 measures taken for facilitating the promotion and development of MSMEs issued by the Central Government in exercise of powers conferred under Section 9 of the MSMED Act, followed by the Directions issued by the RBI in exercise of the powers conferred under Section 21 and 35A of the Banking Regulation Act, the Banking companies though may be „secured creditors‟ as per the definition contained in Section 2(zd) of the SARFAESI Act, are bound to follow the same, before classifying the loan account of MSME as NPA. 16. We may hasten to add that under the "Framework for Revival and Rehabilitation of MSMEs", the banks or creditors are required to identify the incipient stress in the account of the Micro, Small and Medium Enterprises, before their accounts turn into nonperforming assets, by creating three subcategories under the "Special Mention Account" Category, however, while creating such subcategories, the Banks must have some authenticated and verifiable material with them as produced by the concerned MSME to show that loan account is of a Micro, Small and Medium Enterprise, classified and registered as such under the MSMED Act. The said Framework also enables the Micro, Small or Medium Enterprise to voluntarily initiate the pro