Execution of MSME Award – Attachment of Bank Account – Cash Credit Account – Pending Application before Executing Court Where an award passed by the Micro and Small Enterprises Facilitation Council is under execution and an application for vacating the attachment is already pending before the Special Court for Commercial Disputes, the High Court, in exercise of supervisory jurisdiction under Article 227 of the Constitution of India, ought not to interfere with the attachment order. However, when the attached account is a cash credit account, freezing of such account, resulting in the borrower’s inability to deposit amounts and exposing the account to classification as a Non-Performing Asset (NPA), warrants limited modification of the attachment order to permit deposits into the account. (Paras 5–6)

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Civil Procedure – Article 227 – Execution of MSME Award – Attachment of Bank Account – Cash Credit Account – Pending Application before Executing Court

Where an award passed by the Micro and Small Enterprises Facilitation Council is under execution and an application for vacating the attachment is already pending before the Special Court for Commercial Disputes, the High Court, in exercise of supervisory jurisdiction under Article 227 of the Constitution of India, ought not to interfere with the attachment order.

However, when the attached account is a cash credit account, freezing of such account, resulting in the borrower’s inability to deposit amounts and exposing the account to classification as a Non-Performing Asset (NPA), warrants limited modification of the attachment order to permit deposits into the account.

(Paras 5–6)

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RATIO DECIDENDI

When an application to vacate an attachment order is pending before the executing court, interference by the High Court under Article 227 is unwarranted; nevertheless, where the attachment operates upon a cash credit account and prevents the judgment-debtor from depositing amounts, thereby risking the account being treated as a Non-Performing Asset, the attachment order may be suitably modified to permit deposits into the account without vacating the attachment.