In an important June 3, 2025 ruling, Madras HC set aside Canara Bank’s SARFAESI notices and auction sale against four Trichy MSMEs for skipping the statutory Revival & Rehab Framework (Notification, 29 May 2015) under the MSMED Act. Key points:
=> 2015 Framework binds banks to form “Stressed MSME” committees and propose corrective action plans before classifying loans as NPAs.
=> Digital records and sanction letters clearly showed MSME status—banks can’t claim ignorance.
=> Revival efforts must come first; asset-recovery notices are invalid if rehabilitation steps aren’t taken.
Why It Matters to MSMEs: MSMEs gain a legal shield against premature asset seizures, and banks must partner in enterprise revival, not just debt recovery.
Tip for MSMEs:
Ensure your MSME classification appears in all loan documents, and insist on committee access before any SARFAESI action.
