In Brief
This case involved six consolidated appeals by MSMEs against a High Court order dismissing their writ petitions. The MSMEs challenged banks' actions under the Securitisation Act, arguing banks must follow the 2015 Ministry notification on MSME revival and rehabilitation before classifying accounts as non-performing assets. The Supreme Court held that the notification and RBI Master Directions, issued under statutory authority, are mandatory and binding on banks. The Court set aside the High Court's finding that the restructuring framework was merely directory, clarifying banks must identify incipient stress through the Special Mention Account mechanism before NPA classification. However, the Court also held that MSMEs must authenticate their status and vigilantly invoke the framework's protections.
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