Dismissed

Ms Habib Agro Industries Rep by Its Partners and Legal Heir of Late Sri Habib Khan and Others v. the Authorised Officer Indiabulls Housing Finance Ltd.

DRT19 Sept 2025SA/169/2023

Case brief

AI extract

What is this about?

This applicant seeks to set aside possession orders issued under the SARFAESI Act. The Tribunal upheld the respondent's compliance regarding security interest registration and notice service/publication, rejecting claims for interest waiver due to pandemic and deceased borrower status without proof. The application was dismissed.

What did the court decide?

SA No.169/2023 and all pending IAs stand dismissed.

Ms Habib Agro Industries Rep by Its Partners and Legal Heir… — Company and Corporate | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-II, BANGALORE

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Dated of 19^th day of September, 2025

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PRESENT: SHRI T. RAJESH Hon’ble Presiding Officer

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S.A.No.169 of 2023

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M/s.Habib Agro Industries, Represented by its Partners &, Legal Heirs of late Sri Habib Khan.

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(i) Mr.SadathAli Khan, S/o.Late Habib Khan, No.M-3, Nelsen Mandela Road, Bannimantap, ‘A’ Layout, Mysuru – 570 015.

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(ii) Mr.Abid Ali Khan, S/o.Late Habib Khan, No.M-3, Nelsen Mandela Road, Bannimantap, ‘A’ Layout, Mysuru – 570 015.

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(iii) Mr.Mohammed Ali Khan, S/o.Late Habib Khan, No.M-3, Nelsen Mandela Road, Bannimantap, ‘A’ Layout, Mysuru – 570 015.

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(iv) Inayath Ali Khan, Alias Inayat Ali Khan Sadat Ali Khan, S/o.Late Mr.Habib Khan, No.M-3, Nelsen Mandela Road, Bannimantap, ‘A’ Layout, Mysuru – 570 015.

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SA No. 169/2023

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(v) Mrs.Sayeeda Begaum, W/o.Late Habib Khan, No.M-3, Nelsen Mandela Road, Bannimantap, ‘A’ Layout, Mysuru – 570 015.

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(vi) Mrs.Farhana Khanum, D/o.Late Habib Khan, Flat No.103, Arafa Abode, Wheelers Road, Cooks Town, Bengaluru – 560 005.

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(vii) Mrs.Farzana Aga, D/o.Late Habib Khan, No.8/1, Campbell Street Cross, Ashok Nagar, Bengaluru – 560 025.

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. . . Applicants.

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Versus

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The Authorised Officer, M/s.Sanmaan Capital Ltd., No.448-451-Udyog Vihar, Phase-V, Gurugram – 122 016.

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M/s.Sanmaan Capital Ltd., Anand Arcade, MIG No.11/11-A, 1^st Floor, Vishwamanava Double Road, Saraswathipuram, Mysuru – 570 023. . . . Respondents.

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Ld. Counsels on record / appeared :-

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Counsel for Applicants :- Sri M.A.Rajendra. Counsel for Respondents :-M/s.FX & Co.

SA No. 169/2023

: - 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 notices dated 18.11.2022.

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The Applicants 1 to 4 are the partners in M/s.Habib Agro Industries and legal heirs of late Habib Khan. The Applicants 5 to 7 are brought on record as legal heirs of late Mr.Habib Khan and are neither the guarantors/mortgagors to the loan sanctioned to the firm.

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It is the case of the Applicants that the firm M/s.Habib Agro Industries wherein the applicants 1 to 4 are the partners availed Loan against property for Rs.3,60,00,000/- which was sanctioned on 21.10.2014 which was repayable in 180 months. According to the Applicants, the default in loan accounts is due to the business loss occurred apart from COVID-19 pandemic disasters and the accounts were classified as NPA on 23.11.2021 which the applicant alleges without giving due weightage

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to the notifications issued by RBI during the pandemic lockdown period. It is also the case of the Applicants that the request of the applicants to extend concessional rate of interest since the repayment was based on

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the income to be generated out from the Agro based industry and also COVID-19 package disasters, are not considered by the respondents. It is further contended by the applicants that the possession notice was neither affixed nor published in two leading newspapers which is having wide publicity in the locality. It is also contended that the recovery proceedings are initiated without being registered the charge/security interest with the Central Registry as per provisions of 26-D of the Act. It is further contention of the applicants that the debt is not a legally recoverable debt since the waiving of compound, penal and other charges debited to the account during COVID-19 disaster period are claimed in the due amount. It is the case of the applicants that the applicants challenged the earlier possession notice dt.18.11.2022 in SA No.80/22 and 82/2022 in respect of properties situated at Mysuru and the same was disposed since the respondent bank withdrawn the said statutory notices on the ground that legal heirs of late Habib Khan as not brought on record. It is further case of the applicants that they informed the death of Mr.Habib Khan in 2017 itself and not belatedly after 5 years. The applicant is putting forward another contention that

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main borrower expired on 14.3.2017 and the bank continued to collect

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EMIs till the alleged classification of account as NPA. In this regard it is

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also contended that by the death of the borrower the mortgage ought to have been redeemed as the facility is covered by insurance. Hence, the

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applicants prayed to set aside the impugned possession notice issued by the respondent institution.

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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.18.11.2022.

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ii) Copy of demand notice dt.14.07.2022.

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The respondent filed their statement of objection contending that the service of demand notice is admitted by the applicants in averments but in contra raised the ground that they are not served with demand notice. The respondent contended that the classification of account of the applicants as NPA is justified as no material evidence has been placed by the applicants before this Tribunal in order to demonstrate that there was restriction imposed by the Government or RBI during the COVID period. It is contended that nothing is available on record to hold that the respondent could not be permitted to classify the loan account as NPA on 23.11.2021. The demand notice dated 14.7.2022 was issued and had been received by borrowers and the other applicants. It is also stated that the demand notice was also published in two dailies. The

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respondent also contended that the applicants have been provided with

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the benefits as per the criteria only on which the applicant falls. The averments of the applicants that the possession notice was not published and security interest is not registered with Central Registry are baseless. 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 Board of Resolution

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ii) Copy of the loan application.

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iii) Copy of the sanction letter dt.13.10.2014.

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iv) Copies of the loan agreement dt.21.10.2014 and declaration dt.21.10.2014.

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v) Copies of the demand notice dt.14.07.2022, courier receipts and Delivery status.

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vi) Copies of paper publications Vishwavani dt.02.08.2022 and Business Standard dt.02.08.2022.

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vii) Copies of the possession notice dt.18.11.2022, courier receipts and delivery status.

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viii) Copies of photographs for having pasted the possession

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notice dt.18.11.2022 on the outer door of the premises.

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ix) Copies of paper publications Business Standard and Vishwavani both covers Mysore on 23.11.2022.

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x) Copy of the CERSAI Certificate.

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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 not disputing the availment of credit facility and creation of mortgage. The applicant though is admitting the creation of Security Interest is challenging the competency of the respondent initiating the measures contending that the Security Interest is not registered with the Central Registry. However, this contention is successfully rebutted by the respondent as they had produced the proof as to the registration of the Secured Asset with Central Registry.

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The next contention taken by the applicant is that they were not extended the benefits as directed by RBI in lieu of Covid-19. This contention have to viewed in the light of clear admission of the applicant as to the defaults committed by them in repayment. The

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applicant had not specifically pleaded which beneficial notification they were entitled for and which direction of RBI is not extended to them.

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The applicant is also putting forward a case that the respondent had collected EMIs after the death of the borrower is of no legal consequences. The other contention taken by the applicant that by virtue of insurance policy the entire liability of the deceased borrower will be wiped off and will result in redemption of mortgage is also raised without any proof as to the sanctioning of any insurance claim. In the absence of any proof as to the insurance claim, this Tribunal is not inclined to accept the said contention.

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The respondent along with their counter had produced the proof as to the Service of demand notice. Hence the respondent had proved the compliance of rule 3. The respondent had also published the demand notice is two dailies.

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The impugned possession notice is also served, published and affixed as required by statute as evidenced by the production of Annexure R9; proof as to the service, Annexure R10; proof as to the affixture and Annexure R11; proof as the publication. Even though the applicant had put forth a contention that the purported paper publication cannot be

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considered as compliance of rules as the publications were not taken

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out in newspaper having wide circulation in the area. The applicant had

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not placed on record any document which throws light as to the circulation of newspapers in which publications is taken out.

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Even though the publication in ‘Business standard’ cannot be consideration as a proper publication as required by rules, this Tribunal is not inclined to interfere with the measures on that sole ground, as no prejudice is caused to the applicant by the said publication or improper publications.

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Hence on consideration of the discussions as held in aforementioned

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

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