Dismissed

Ms Balaji Steels and Pipes and Others v. PNB Housing Finance Limited

DRT17 Oct 2025SA/105/2025

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed the Securitization Application challenging a possession notice issued under the SARFAESI Act. The Tribunal held that the respondent bank complied with statutory provisions for notice issuance and publication, and rejected the applicants' claims regarding RBI rescheduling directives.

What did the court decide?

The Securitization Application SA.105 of 2025 stands dismissed and all pending IAs are closed.

Ms Balaji Steels and Pipes and Others versus PNB Housing… — Company and Corporate | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-II, BANGALORE

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Dated of 17^th day of October, 2025

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PRESENT: SHRI T. RAJESH Hon’ble Presiding Officer

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S.A.No.105 of 2025

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M/s.Balaji Steel and Pipes, Registered Office No.4, 16 & 17, Sy.No.68, Mylasandra, Uttarahalli, Kengeri, Bangalore – 560 060.

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Mr.P.Venugopal Naidu, S/o.Late P.G.Kannaiah Naidu, 2^nd Cross, 2^nd Main, Banashankari 2^nd Stage, Padmanabha Nagar, Bangalore – 560 070.

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Mrs.P.Subbamma, W/o. P.Venugopal Naidu, 2^nd Cross, 2^nd Main, Banashankari 2^nd Stage, Padmanabha Nagar, Bangalore – 560 070.

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. . . Applicants.

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Versus

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The Authorised Officer, PNB Housing Finance Ltd., 40, Jhogh Towers, 4^th Floor, 27^th Cross, 5^th Main Road, 4^th Block, Jayanagara, Bengaluru.

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. . . Respondent.

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SA No. 105/2025

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Ld. Counsels on record/appeared :-

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Counsel for Applicants :- M/s.M.A.Rajendra & Associates. Counsel for Respondent :- M/s.FX & Co. (CAVEAT)

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: - O R D E R - :

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The Securitization Application, SA is filed under section 17 of the Securitization And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act; herein after been referred to as SARFAESI Act or the Act, as the case be challenging the measures leading to issuance of possession notice dated 31.12.2024.

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The 1^st Applicant, a partnership firm wherein 2^nd and 3^rd applicants are partners who are none other than husband and wife. The firm is engaged in the business of procuring the raw materials from manufacturers and distributing the steel pipes and allied products. It is stated that the firm availed certain credit facilities from the respondent bank on 30.08.2014. It is also stated that the applicants are regular in their repayments but the loan account of the applicants was classified as Non Performing Assets on 14.10.2024 since they had suffered heavy loss in their business due to COVID-19 disasters. It is admitted that the respondent issued Demand Notice u/s.13(2) of the Act on 18.10.2024 followed by possession notice u/s.13(4) of the Act on 31.12.2024. The

SA No. 105/2025

applicants contend that the RBI as per their notification under clause RF

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2.0 mandates that restructuring and rescheduling of these loans which were standard as on July 2024 are to be rescheduled/ restructured without any discretion or discrimination. It is the case of the applicants that demand notice was not affixed on the conspicuous place of the schedule property and also the respondent failed to publish the same in newspapers having wide circulation. The respondent had also issued sale notice dt.30.01.2025 notifying the auction to be held on 11.03.2025 when this application is pending before this Tribunal as DN.No.419/2025. It is also the case of the applicants that the respondent bank failed to issue/serve statutory notices to all the applicants, the respondent ought to have register the security interest/ charge created over these schedule properties with the Central Registry and that the respondent failed to publish the impugned possession notice in two wide circular newspapers or affix it at a conspicuous place of the schedule property. The applicants further submit that despite the remittances to an extent of Rs.4.00 crores and more, the respondent is now claiming an amount of Rs.3,76,32,962/- in possession notice and also the respondent have not furnished statement of accounts. The applicant also stated that the respondent bank issued two possession

SA No. 105/2025

notices on the same date (i.e.) on 31.12.2024 for the same outstanding liability of Rs.3,76,32,962/- as on 18.10.2024 relating to two loan accounts, one of which is the possession notice pertains to two scheduled properties and the other one is for single scheduled property which are under challenge in one application to avoid multiple litigation. It is also contended that the earlier demand notice issued on 10.08.2022 by respondent bank was withdrawn to cover up the lapses committed by bank’s officials. In the grounds to the SA the applicants are reiterating the contentions as stated above and prayed to set aside the impugned possession notice dt.31.12.2024 issued by the respondent.

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Along with SA, the Applicants had produced the following documents:

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i) Copy of the impugned possession notice dt.31.12.2024. ii) Copy of sanction letter. iii) Copy of demand notice dt.18.10.2024. iv) Copy of the sale notice dt.31.01.2025 issued by the respondent. v) Copy of account statement.

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The respondent filed their statement of objection denying all the contentions of the applicants in total, except what is specifically admitted in their objections. The respondent denies the contentions of

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the applicants that they were regular in discharging the liability and

SA No. 105/2025

they suffered heavy loss due to COVID-19. The respondent also denied the contentions of the applicants regarding RBI notification for restructuring and rescheduling of loans and no such circular mandating restructuring was placed by the applicants to support their claim. It if further denied that the question of affixing and taking publications of demand notice does not arise as it is served on the applicants. The respondent admitted the issue of sale notice dt.31.01.2025 but submitted that the sale in response to the said sale notice did not materialize and the respondent is in the process of issuing another sale notice in accordance with law. The respondent is denying the contentions of the applicants that without giving an opportunity to hear the grievances of the borrower the respondent straight away issued the auction sale notice on 30.01.2025. The applicants admitted the service of demand notice and possession notice and hence applicant’s contention that the respondent has failed in service of statutory notices is denied. The contention that the respondent has not provided the statement of accounts is denied. It is also stated that the respondent is justified in claiming an amount of Rs.3,76,32,962/- as per the terms and conditions agreed upon by them. No illegality is committed by the respondent in issuing two possession notice dt.31.12.2024 as the

SA No. 105/2025

mortgaged properties are situated in different places. The respondent also admitted the withdrawal of demand notice dt.10.08.2022 but denied the other averments. The respondent contended that the loan sanctioned under loan A/c.No.00196700005557 on 30.08.2014 for a sum of Rs.6,67,50,000/- during the COVID on due avail of moratorium got restructured vide sanction letter dt.29.12.2020 for a sum of Rs.4,36,52,993/-. The loan sanctioned under loan A/c.No.00196700005558 on 30.08.2014 for a sum of Rs.90,00,000/-

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was also during the COVID got restructured vide sanction letter dt.29.12.2020 for a sum of Rs.51,42,525/-. Hence, the respondent prayed for dismissing the SA.

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Along with objection, the respondent had produced the following

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documents:

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i) Copy of the authorisation letter.

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ii) Copies of the sanction letters dt.30.08.2014. iii) Copies of the loan agreements dt.30.08.2014.

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iv) Copy of the Request letter dt.19.12.2020.

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v) Copy of the sanction letter dt. dt.29.12.2020. vi) Copies of the loan agreements dt.29.12.2020 and undertaking dt.29.12.2020.

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vii) Copies of the demand notice dt.18.10.2024, postal receipts, and served RPAD covers.

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viii) Copies of the possession notice dt.31.12.2024 and postal receipts.

SA No. 105/2025

ix) Copies of photographs for having pasted the possession notice dt.31.12.2024 on the outer door of the premises.

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x) Copies of paper publications published in two leading newspapers namely Business Standard and Hosa Digantha on 04.01.2025.

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xi) Copy of the Central Registry. xii) Copy of the order dt.21.02.2025 in Crl.Misc.No.436/2025. xiii) Statement of Accounts.

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Heard the Ld. counsel for both sides.

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The only issue that arises for consideration is as to the legality of measures initiated and continued leading to the impugned possession notice.

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The applicant is having no dispute as to the availment of the credit facility, creation of Security Interest in lieu of the security and is also admitting the defaults occurred in the account though the same is attributed to Covid 19. The applicant though is contending that the respondent failed to extent the RBI directions as to the Covid-19, which mandates re-schedulment of credit facilities, no such directives by RBI is produced by the applicant. In view of the above, this Tribunal is not inclined to accept the contention of the applicant in this regard.

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The next contention taken by the applicant is that there is no service of demand notice. This contention is successfully countered by the respondent as the proof of desptech and service of demand notice. In

SA No. 105/2025

view of the production of the proof as to the service of demand notice,

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there is no force in the contention of the applicant that there is no publication and affixture of demand notice.

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The next contention of the applicant as to the issuance of two possession notices is justified as there is no illegality in issuance of separate possession notices in respect of different properties.

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The compliance as to Rules 8(1) and 8(2) of Security Interest (Enforcement) Rules is produced by the respondent as the proof of despatch, affixture and publication of the possession notice is produced along with the objection. In view of the above, this Tribunal is satisfied that there is due compliance of Rule 8(1) and 8(2).

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No other contention is taken by the applicant either at the time of hearing or on the pleadings.

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In view of the discussion as held above and finding arrived there in, this Tribunal is of the considered opinion as the measures initiated and continued by the respondent leading to the impugned notice are in accordance with statute and the SA is liable to be dismissed.

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In the result

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i) SA.105 of 2025 stands dismissed.

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ii) All pending IAs closed

SA No. 105/2025

iii) In the facts and circumstances of the case, there is no orders as to

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cost.

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( Dictated to PS, transcribed by him, corrected, signed and pronounced by me in the Open Court, this 17^th day of October, 2025 )

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Sd./- (T. RAJESH) PRESIDING OFFICER

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Ms Balaji Steels and Pipes and Others v. PNB Housing Finance Limited

Case brief

What is this about?

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Ms Balaji Steels and Pipes and Others v. PNB Housing Finance Limited

Case brief

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