ORDER : NAGESH BHEEMAPAKA, J. Aggrieved by the action of the 5th respondent in issuing recall notice dated 24.04.2025 classifying petitioner's MSME Suvidha CC Account No. 138115010000006 including all facilities as a Non-Performing Asset (NPA, effective from 31.03.2025 and withdrawing all the credit facilities granted to petitioner, this Writ Petition is filed. 2. The case of petitioner partnership firm which is doing business of Dealership for Tractor Sales, Service in the name and style 'MVR Associates' vide Firm Registration No. 660 of 2022, is that as a part of expansion of business, they obtained credit facility from the 5th respondent bank. The bank sanctioned credit facility to an extent of Rs.6,00,00,000/- vide LR. No. MLP/KMM/2023-24/S-11A, dated 29.04.2023, bearing Loan Account No: Union MSME Suvidha No. 138115010000006. For this purpose, petitioner provided collateral security by depositing their property title deeds. 2.1. It is stated, petitioner is routing its sale transactions into the said account and utilized the credit limit. Due to slackness in business, they agreed to reduce its credit limit by One Crore before December 31, 2024 and also would reduce its credit limit to Three Crores on or before 31.03.2025. After taking into consideration petitioner's regular payment into the CC account, KYC documents, stock statements and inventory, respondent-Bank renewed the loan on 18.11.2024 for the period up to 17.05.2025. 2.2. Petitioner is stated to have made representation dated 11.04.2025 to the 5 th respondent seeking time for reducing the credit limit to Three Crores till 30.06.2025, however, the latter denied the same and asked to issue another representation with modified terms stating that they would reduce credit limit by One Crore before 30.04.2025 and also would reduce credit limit to Three Crores on or before 30.06.2025. While so, respondent-Bank without any notice as per RBI guidelines, issued the impugned recall notice dated 24.04.2025 on the ground that there is a persistent default on the part of petitioner, classifying it as NPA effective from 31.03.2025, which, according to petitioner, is bad in law. 2.3. It is contended that renewed loan is sanctioned on 18.11.2024 and as per the agreed terms and conditions of renewal ‘in case of non-improvement of routing in next six months, branch is advised to explore reducing the limits as mentioned in the note’. The six months period ends with 17.05.2025, hence the impugned notice dated 24.04.2025 is issued much prior to the agreed terms and conditions. The six months period ends with 17.05.2025, hence the impugned notice dated 24.04.2025 is issued much prior to the agreed terms and conditions. It is also stated, petitioner is paying interest regularly and the last payment is dated 31.03.2025. As per the guidelines on Fair Practices Code for Lenders, a prior notice to the borrowers be given before taking coercive action. As per 'Framework for Revival and Rehabilitation of MSMEs', before a loan account of Micro, Small and Medium Enterprise turns into NPA, Banks or creditors are required to identify incipient stress in the account by creating three sub-categories under the Special Mention Account (SMA). Since petitioner is paying interest regularly and there is no default, the question of NPA does not arise. 2.4. As per RBI Circular in regard to NPA/Income Recognition, once debt continues to be in default for a period of 90 days, there are various stages before that i.e. SMAO, SMAI, SMA2 and then NPA. Without issuing any notice/intimation of default much less without categorizing as a special mention account, respondent-Bank issued the impugned notice, is the grievance of petitioner. It is vehemently contended that as per the principles laid down by the MSMED Act and also the RBI Circulars, for every account to be categorized as NPA, prior notices of default are to be given to the borrower, however, respondent-Bank failed to issue such notices. 3. While issuing notice, this Court by order dated 30.04.2025 granted interim stay of all further proceedings pursuant to the impugned notice of the 5 th respondent. 4. The 5 th respondent Bank filed counter mainly stating that there is no turnover as projected by petitioner and the stock which is available as a primary security is not sufficient for the limit already availed by them. At the request of petitioner, Bank renewed the CC limit subject to the terms and conditions dated 18.11.2024 mentioned in the sanction letter. It is clearly mentioned therein that the limit should be reduced by One Crore by 31.12.2024 and further limit of Two Crores should be reduced by 31.03.2025 and the total CC limit should be brought down to Three Crores by 31.03.2025. However, petitioner failed to bring the limits as per the terms of the sanction letter. It is stated, because of the non-compliance of sanction terms and non-availability of drawing power, the Statutory Auditors appointed by RBI have written MOC ‘... However, petitioner failed to bring the limits as per the terms of the sanction letter. It is stated, because of the non-compliance of sanction terms and non-availability of drawing power, the Statutory Auditors appointed by RBI have written MOC ‘... The account is over drawn beyond drawing power as well as sanction limit. In view of above, the account is classified as substandard’ and directed to classify the account as NPA with effect from 31.03.2025 and accordingly, respondent-Bank classified the account as NPA. 4.1. It is also stated, the lis is regarding contractual obligations that too in respect to the credit norms, hence, a writ under Article 226 of the Constitution is not maintainable. 5. Petitioner filed reply mainly stating that it has already deposited Rs. One Crore into the cash credit account and submitted e mail representation dated 10.07.2025 requesting the bank to reduce the sanction limit to Rs. Five Crores. Further representations dated 11.04.2025 were also made to respondent-Bank, however, the bank turned deaf ear to all these representations. 6. Heard learned counsel for petitioner Sri M.V. Hanumantha Rao and Smt. V. Dyumani, learned Standing Counsel for respondent bank. 7. It is an undisputed fact, as contended by petitioner and not rebutted by respondent-Bank that no prior notice/intimation of either default by petitioner or decision of bank to treat petitioner's account as NPA, is given to petitioner. Petitioner contends that such a prior-notice is mandatory not only as per the guidelines on Fair Practices Code for Lenders' but also as per the 'Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises' issued vide notification dated 29.05.2015 issued by Central Government in exercise of powers u/Sec. 9 of the MSMED Act. 8. Learned counsel for petitioner rightly relied on the judgment in M/s PRO KNITS v. The Board of Directors of Canara Bank (SLP (C) No. 7898 of 2024) dated 01.08.2024, wherein the Hon'ble Supreme Court held: "The instructions/directions issue by the Central Government under Section 9 of the MSMED Act and by the RBI under Section 21 and Sec. 35A have statutory force and are binding to all the Banking companies." 9. Undisputedly, petitioner sent e mail to respondent- Bank on 11.04.2025 at 19.05 hrs, as: ‘Kindly request that you please give us an extension time period to reduce our credit limit as here I attached the request letter for your reference’. Undisputedly, petitioner sent e mail to respondent- Bank on 11.04.2025 at 19.05 hrs, as: ‘Kindly request that you please give us an extension time period to reduce our credit limit as here I attached the request letter for your reference’. They also submitted another representation: ‘... Regarding to it, we promised to pay back the loan and limit the loan, but due to unexpected reasons we have failed to pay the loan to you. It is requested you to give time till June 30th 2025 to limit loan amount. Before the requested time period we will pay back the loan to you. If in case of any failure of payment from our side we are liable for the actions taken by you against us for our default. Hence it is requested you to grant time for use to pay the loan to you’. 10. Petitioner is stated to have submitted yet another representation dated 11.04.2025: ‘... we wanted to limit our loan amount by paying 1 crore rupees on or before April 30th 2025 and 2 crore rupees on or before June 30th 2025. If there is any default in our loan payments before the said dates we will be liable for the action taken against us by the bank. It is requested and prayed to you to accept and give me this opportunity to pay the loan’. Undisputedly, respondent-Bank has not considered and passed orders on the representations. 11. Another factor is that renewed loan was sanctioned to petitioner on 18.11.2024. As per the agreed terms and conditions of renewal letter 'in case of non-improvement of routing in next 6 months, Branch is advised to explore reducing the limits as mentioned in the note’. So the time limit is up to 17.05.2025, whereas the impugned recall letter was issued on 24.04.2025. 12. The Government of India and the State Government are, time and again, trying to encourage entrepreneurs and self- employment. Petitioners are budding small entrepreneurs and stated that they are providing employment to 20 members. If the Bank is harsh in extending its helping hand, petitioner and its dependents will be on roads. It is not out of place to mention that the Government of India has brought into play a policy called ‘Make in India’ in 2014 to transform the country into a global manufacturing hub. If the Bank is harsh in extending its helping hand, petitioner and its dependents will be on roads. It is not out of place to mention that the Government of India has brought into play a policy called ‘Make in India’ in 2014 to transform the country into a global manufacturing hub. It aims to achieve this by encouraging both domestic and foreign companies to invest in manufacturing in the country, with a focus on improving the business environment, fostering innovation, and building world- class infrastructure. The initiative is built on four pillars: new processes, new infrastructure, new sectors, and a new mindset. 13. Respondent-Bank being a public sector undertaking, is supposed to keep in mind the policy of Government of India in dealing with loans of young entrepreneurs. Therefore, if respondent-Bank takes a lenient and sympathetic view and considers the request of petitioner, it will be appreciated. In view of the above discussion, without going into the merits as to issuance of recall notice dated 24.04.2025 is correct action or not, this Court deems it appropriate to dispose of the Writ Petiton. 14. Respondent-Bank is directed to consider and pass orders on the representation of petitioner dated 11.04.2025 keeping in view the terms and conditions of renewal letter dated 18.11.2024; guidelines on Fair Practices Code for Lenders; Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises issued by Government of India's notification dated 29.05.2015 and the Government's policy of 'Make in India'; undertaking given by petitioner in its representations that if it fails to fulfill/remit within the time limit given by Bank, Bank is at liberty to proceed against it and pass appropriate orders within four weeks from the date of receipt of a copy of this order. Till such orders are passed by the Bank, operation of the impugned recall notice dated 24.04.2025 is put on hold. 15. The Writ Petition is accordingly disposed of. No costs. 16. Consequently, the miscellaneous Applications, if any shall stand closed.