Dismissed

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

DRT17 Oct 2025SA/116/2025

Case brief

AI extract

What is this about?

An application challenging Section 14 orders issued by a Civil Magistrate under the SARFAESI Act was dismissed. The Tribunal held that the Authorized Officer's measures were lawful, the demand notice was validly served, and the issuance of separate possession notices was justified, as compliance with Rule 8 rules was proven. Allegations of false affidavits lacked specific particulars.

What did the court decide?

SA No.116 of 2025 stands dismissed; all pending IAs closed.

Ms Balaji Steels and Pipes and Others versus PNB Housing Finance Limited — Arbitration | 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.116 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, 3^rd Floor, 27^th Cross, 5^th Main Road, Jayanagara, 4^th Block, Bengaluru.

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. . . Respondent.

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SA No. 116/2025

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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 the procurement of Section 14 orders by the respondent in Crl.Misc. No.690/2025 dt.17.04.2025 passed by the IInd Additional Chief Judicial Magistrate, Bengaluru.

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The 1^st Applicant, a partnership firm with 2^nd and 3^rd applicants as 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 contended that the Firm availed certain credit facilities from the respondent bank during 2018. It is also contended that the borrowers were regular in their repayments but the loan account of the applicants was classified as Non Performing Assets on 14.10.2024. The Applicants case is that they had suffered heavy loss in their business due to COVID-19 disasters and the

SA No. 116/2025

respondent initiated further measures by issuance of possession notice u/s.13(4) of the Act on 31.12.2024 which is not served on all the applicants after issuing the demand notice. The applicants filed SA 105/2025 challenging the said possession notice before this Tribunal. It is the case of the applicants that the respondent ought to have registered the security interest created over the properties with the Central Registry, the respondent failed to publish the impugned possession notice in two leading newspapers which alleged to have been complied and claimed in the petition submitted before the Hon’ble Addl. CJM in Crl.Misc.No.690/2025. The applicants are also having case that subsequent to the remittances to an extent of Rs.4.00 crores the respondent is claiming Rs.3,69,36,728.40. The applicants further contended that the respondent have not furnished statement of accounts. 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 Section 14 order procured by the respondent.

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

SA No. 116/2025

i) Copy of the impugned order passed by Hon’ble II ACJM at Bengaluru in Crl.Misc.No.690/2025 dt.17.04.2025 and copy of the petition filed by respondent bank.

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ii) Copy of the statement of account.

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The respondent filed their statement of objection denying all the contentions of the applicants. The respondent denies the contentions of the applicants that they were regular in discharging the liability and also that they suffered heavy loss due to COVID-19. The respondent submitted that the applicants have filed SA 105/2025 challenging the impugned possession notice dt.31.12.2024 in which the respondent had filed detailed statement of objection and the same is pending for consideration. The respondent also denied the contentions of the applicants that the security interest was not registered, respondent failed to publish and affix the impugned possession notices and false affidavit has been filed by the respondent while obtaining section 14 orders. The respondent is also refuting the contentions of the applicants that the remittances are not appropriated towards the loan account and that there is no legally recoverable debt. The respondent further denied the contention of the applicants that the Ld. Magistrate has passed an order based on the possession notice and classification of the account as NPA which are contrary to the RBI guidelines. The respondent contended that

SA No. 116/2025

they provided the statement of account. The respondent contended that

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they acted within the scope of law and 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.26.09.2014 & 30.08.2014.

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iii) Copies of the loan agreements dt.30.08.2014.

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iv) Copy of the Request letter.

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v) Copy of the sanction letter dt. dt.29.12.2020.

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vi) Copy of the loan agreement dt.29.12.2020

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vii) Copy of undertaking dt.29.12.2020.

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

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ix) Copies of the possession notice dt.31.12.2024 and postal receipts and photographs for affixture of possession notice.

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x) Copies of paper publications in Business Standard and Hosa Digantha.

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xi) Copies of appeal and statement objection in SA 105/2025. xii) Copy of the charge registered in Central Registry.

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xiii) Copy of the order dt.17.04.2025, petition and affidavit in Crl.Misc.No.590/2025.

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xiv) 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

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measures initiated and continued leading to the leading to the procurement of section 14 orders.

SA No. 116/2025

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 reschedulment of credit facilities, no such directives by RBI is produced by the applicant. In view of the about, 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 as to the despatech and service of demand notice. In view of the production of the proof as to the service of demand notice, 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 notice 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 rule 8(1) and 8(2) of Security Interest (Enforcement) Rules is produced by the respondent as the proof of dispatch, affixture and publication as to the possession notice is produced

SA No. 116/2025

by the respondent. Even otherwise the issuance of possession notice is

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not sinequanon for initiation of section 14 measures.

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Even though the Applicant is contending that the Section 14 order is obtained by filing a false affidavit, no particulars as to the alleged misstatement in the affidavit is forthcoming in the pleadings or documents.

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13 Hence on consideration of the discussions as held in aforementioned paragraphs and findings therein, this Tribunal is satisfied that the measures initiated and continued by the Authorised officer is in accordance with statute. The applicant had failed in putting forward any

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valid challenges against the measures and hence this SA is liable to be dismissed.

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In the result,

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i) SA.No.116 of 2025 stands dismissed

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ii) All pending IA’s stands closed.

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iii) No orders as to cost.

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Issue copies in accordance with rule 16 of the Debt Recovery Tribunal

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(procedure) rule.

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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./-

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(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?

What did the court decide?

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

Case brief

What is this about?

What did the court decide?

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