Banks, NBFCs not bound to take revival measures for MSME before declaring it NPA: Bombay High Court

The Court held that such a process under the MSMED Act could only be carried out on an application by an MSME. It rejected an argument by MSMEs that banks/NBFCs should mandatorily first adopt such restructuring measures.
Bombay High Court
Bombay High Court

The Bombay High Court recently dismissed a clutch of petitions filed by nineteen Micro, Small and Medium Enterprises (MSMEs) challenging the decision of banks and non-banking financial companies (NBFCs) to declare them as Non-Performing Assets (NPAs) [A Navinchandra Steels Pvt. Ltd. V. Union of India & Ors and connected petitions].

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