M/S. Pro Knits vs The Board Of Directors Of Canara Bank

The Supreme Court upheld the High Court's decision that banks and NBFCs are not mandated to adopt the restructuring process outlined in the Notification dated 29th May 2015 under the MSMED Act without an application from the MSMEs. The Court clarified that the provisions of the SARFAESI Act, particularly Section 35, take precedence over the MSMED Act, allowing banks to classify loan accounts as Non-Performing Assets (NPA) without following the restructuring guidelines if no application was made by the MSMEs. Consequently, the appeals were dismissed, affirming the legality of actions taken under the SARFAESI Act.