Dismissed

Mr Ajay Kumar Jogu v. Smfc India Home Finance Ltd.

DRT6 Oct 2025SA/139/2024

Case brief

AI extract

What is this about?

Applicants challenged an e-Auction Sale Notice under SARFAESI Act, 2022, alleging failure to serve statutory notices and publish notice correctly. The Tribunal held that since no auction was conducted, the notice was infructuous, dismissed the application, and directed the Respondent to proceed afresh after issuing a fresh notice. No adjudication on statutory notice validity was made.

What did the court decide?

The respondents are directed to proceed afresh for conducting auction of the schedule property by issuing a fresh sale notice following the provisions of SARFAESI Act, 2002 and Rules made thereunder.

Mr Ajay Kumar Jogu versus Smfc India Home Finance Ltd. — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL_ I AT HYDERABAD

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DATED THIS THE 6TH DAY OF OCTOBER, 2025

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No.139/2024

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Mr.Ajay Kumar Jogu, S/o YadagiriJogu,

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Aged 50 years, Occ:pvt.employee, R/o H.No. 16-6-106, Prukawada Near Prtaparudra Function hall, Railway Gate, Warangal-506 002.

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Mrs.Jogu Swapna, W/o Mr.Ajay Kumar Jogu, Aged 46 years, Occ:house wife, R/o H.No. 16-6- 106, Prukawada Near Prtaparudra Function hall, Railway Gate, Warangal-506 002 ... Applicants

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Verszs

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SMFG India Finance Co.Ltd. (formerly Fullerton India Home Finance Ltd.) Rep. by its Authorized officer Megh Towers, 3.d floor, Old No.307, New No.165, Poonamallee High Road, Maduravoyal, Chennai-600 095.. . .. Respondent Counsel for tLrc Applicants 'i',i ,,t[\ Counselfor Respondent tD^{: Sri€At} Kiran Raj 1l n E [cI^1y6 ORDER 1. This Application is filed u and Reconstruction of Financial Assets and Enfo ity Interest Act, 2OO2 (SARFAESI Act,2OO2l challenging the auction conducted by the Respondent on 29.03.2024 in respect of the schedule property pursuant to the e Auction Sale Notice dt.12.O3.2O24 and to declare the same as null and void.

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.) The averments made by the Applicants in brief are as follows:

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The Applicant No.l availed housing loan of Rs.20,7O,00O/- from the Respondent and Applicant No.2 stood as guarantor and created mortgage in respect ofthe schedule property. Due to loss in the business, Applicant No. I could not pay some instalments and the Respondent refused to provide time for repa)ment of the loan amount. The Applicants also filed SA 103/2021 against Fullerton India Home Finance Ltd and the said SA is pending. Without serving demand notice and possession notice, the Respondent straightaway issued e Auction Sale Notice dt.12.03.2024 for conducting auction of the schedule propert5r on 29 .O3.2O24 without following due process of law. The impugned possession notice was not published in newspapers and the same was not aflixed on the schedule property. Similarly, the impugned e Auction Sale Notice dt.12.O3.2024 was not served on the Applicants and also not affixed on the schedule property. The reserve price fixed by the Respondent against the schedule property is very low. Hence the SA.

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The Respondent filed their Reply denying all the adverse allegations made in the sA and contended that the Applicant No.1 availed housing loan from the Respondent whereas Applicant No.2 stood as guarantor and created mortgage against the schedule property to secure the said loan. Thereafter the Applicants committed default in repaying the loan dues and so, the loan account was classified as NpA as per the RBI guidelines. The Respondent issued demand notice dt. 1s.06.2021 and possession notice dt.2L.O9.2O2l to the Applicants and the said possession notice was published in English and Telugu daily newspapers. Thereafter, the Respondent issued e Auction sale Notice dt.l2.og.2o24 for conducting auction of the sched and the. said notice was affixed on the schedule ; published in two leading newspapers. yed to dismiss the SA.

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l! i r- ,.

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Heard Ld. Counsel for the Applicants and Ld. Counsel for the Respondent. Perused the material brought on record.

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Now the points that arise for consideration are

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i. wlrctlrcr the Applicants haue established ang ualid. ground"s for challenging the e Auction Sale Notice dt.12.03.2024 issued. bg the Respondent for conducting auction of the schedure propertg?

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ii. To what relief?

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Point JVo.(if :-

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During the course of arguments, Ld. Counsel for the Applicants and Ld. Counsel for the Respondent reiterated their respective versions as stated supra.

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The undisputed facts of the case are that the Applicant No.1 availed housing loan from the Respondent whereas the Applicant No.2 stood as guarantor and created mortgage against the schedule property and thereafter committed default in repaying the loan dues.

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The specific contention of the Applicants is that without serving demand notice and possession notice, the Respondent straightaway issued the impugned Auction Sale Notice dt.12.03.2024 and the Respondent also failed to follow Rule 3(6)&8(5) of Security Interest (Enforcement) Rules, 2OO2 and so, the said sale notice is illegal and liable to be set aside.

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Per contra, Respondent contended that the Respondent has scrupulously followed the procedure contemplated under the provisions of SARFAESI Act,2OO2 and Rules made thereunder in issuing all the statutory notices to the Applicants.

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In order'to substantiate their contention, the Respondent fited relevant material doc with the Reply filed by them. The Respondent also filed by this Tribunal in SA LO3l21. The said SA was ,rfr,dy[,.1_ffi,t""" nging the proceedings initiated by the Respon$f$" for takiri'g physica{" session of the schedule property ll^-fr t througrri [S-vo ""S 6"f;f; f"iffi rr€r ur s 14 of the SARFAESI Act, 2OO2 and is Tribunal vide order dt.31.O5.2O24

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wherein it is held that "so far as demand notice dt. 1s.06.2o2 r and possession notice dt.21 .o9.2021 issued by the Respondent are concerned, the Respondent has rightly followed the procedure laid down u/s 13(2) & 13(a) of the SARFAESI Act,2oo2 and Rules made thereunder and hence the said notices are legal and valid'. So, in view of the finding given in SA 103/2021, the Applicants cannot re-agitate about the validity or otherwise of the demand notice and possession notice issued by the Respondent in the present SA again.

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so far as the impugned e Auction Sale Notice dt.L2.o3.2o24 is concerned, during the course of arguments, both the Ld. counsel submitted that no auction was conducted by the Respondent in pursuance of the said sale notice and so, the said sale notice becomes infructuous and hence there is no need to decide the validity or otherwise of the said sale notice dt.12.o3.2o24 issued by the Respondent. This point is answered accordingly.

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Potnt No.(ii):-

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t2. In the result , SA 139 124 is dismissed AS there are no merits. The Respondent is directed to proceed afresh for conducting auction of the schedule property by issuing fresh sare notice by dury foflowing the provisions of SARFAESI Act,2OO2 and Rules made thereunder.

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Consequently, the Interlocutory Applications, pending if any, shall stand disposed of. No order as to costs.

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Communicate a copy of this order to the parties concerned.

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(Dctated to the P.s, transcibed bg her, conected, signed. and. pronounced by me in the open 6th daA of October, 2025).

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sd/(c. GoPr CHANDI PRESIDING OFFICIR

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Mr Ajay Kumar Jogu v. Smfc India Home Finance Ltd.

Case brief

What is this about?

What did the court decide?

Mr Ajay Kumar Jogu v. Smfc India Home Finance Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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