The Supreme Court of India recently delivered its judgment in Boltmaster India Private Limited & Anr. vs. The Board of Directors of Union Bank of India & Ors., Writ Petition (Civil) No. 7/2025. The petition, filed by Boltmaster India Private Limited, raised significant questions surrounding the enforcement of rights under the Micro, Small, and Medium Enterprises Development Act (MSMED Act), 2006, and related statutory provisions.
The petitioners, represented by Mr. Mathews J. Nedumpara and his legal team, challenged proceedings initiated by the Union Bank of India under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act), 2002. The petitioners alleged that the bank’s actions violated the MSMED Notification dated May 29, 2015, and statutory duties prescribed under banking laws.
Key Legal Issues Raised
The petitioners sought the Supreme Court’s intervention under Article 32 of the Constitution, asserting the following:
1. Failure to Implement MSMED Notification: The petitioners argued that the Central Government and the Reserve Bank of India (RBI) failed to ensure the implementation of the MSMED Notification. This included the creation of committees by bank boards to address stressed MSME accounts.
2. Legality of Classification as NPA: They claimed that the respondent bank unlawfully classified their account as a non-performing asset (NPA) and initiated recovery actions in contravention of the MSMED Notification.
3. Constitutionality of Recovery Laws: The petition challenged sections of the SARFAESI Act, Recovery of Debts and Bankruptcy Act (RDB Act), and Insolvency and Bankruptcy Code (IBC) as unconstitutional, alleging these laws were one-sided and biased against borrowers.
4. Jurisdiction of Civil Courts: The petitioners sought a declaration that certain sections barring the jurisdiction of civil courts were void, asserting that the MSMED Act did not provide an alternative mechanism to resolve disputes.
Court’s Decision
A bench comprising Justice Hrishikesh Roy and Justice S.V.N. Bhatti heard the matter. After considering the arguments presented by the petitioners’ counsel, the Court dismissed the writ petition.
Key observations from the Court included:
– On Jurisdiction Under Article 32: “We see no reason to entertain the Writ Petition filed under Article 32 containing the above prayers.”
– On the Petition’s Merit: The Court refrained from delving into the constitutionality of the cited statutes and the alleged violations, suggesting that alternative remedies were available to the petitioners.
