Dismissed

Jahangir Mohd v. Shriram Finance Limited

DRT1 Aug 2025SA/41/2024

Case brief

AI extract

What is this about?

Applicants filed a security application challenging possession proceedings initiated by Shrirm Finance Ltd under the SARFAESI Act. The Debts Recovery Tribunal examined compliance regarding NPA classification, notice service, and rule adherence, dismissing the application. The court held applicants failed to prove illegality in the lender's steps. The application was dismissed with no costs awarded

What did the court decide?

The Securitization Application was dismissed and interlocutory applications were disposed with no order as to costs.

Jahangir Mohd versus Shriram Finance Limited — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERYTRIBUNAL - I AT HYDERABAD

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DATED THIS THE O 1 ST DAY OF AUGU s,T, 2C,25

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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SA.No.4 1/2C24

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Jahangir Mohd, S/o. Md. Allahauddin, Gender: Male, Aged about 50 years, Occ: Shama Enterprises,

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R/o.5.249, Opp. Green Bawarchi, Chintal, HMT Townshhip, euthbullapur, Malkajgiri - Medchal _ 500 054.

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Mohammed Shama Begum, W / o. Mohammed Jahangir, Gender: Female, aged about 42 years, R/o.5.249, Opp. Green Bawarchi, Chintal, HMT Townshhip, euthbullapur, Malkajgiri - Medchal _ 5OO 054.

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Showkath Ali, S/o. Shaik Ali, Gender: Male, aged about 36 years, R/o. H.No.31.6g, Nanda Nagar, Chintal, Near IDpl, Hyderabad _ 500 OS4.

Applicants.

Versus

Shrirm Finance Ltd.,

Rep. by its Authorized, Officer, #3-6-478, 4th Floor, Anand Estate l-iberty^{Road, Himayathnagar,} Hyderabad - 500 029.

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Respondent.

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Counsel for the Respond.ent :

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Sn^y. Krishna Mohan Rao. Sri M. Indrasen.

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The Applicants 17 of the SARF' physical

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tion Application under section :tion of the Respondent to take *o"^{"D'l'ffiffiIff ion E} ule property in pursuant of W---#'

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SA.No.41/2024

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the Vacate Notice dt.2o.o L.2024, issued in crl.M.p.No.szg/2023 on the file of chief Metropolitan Magistrate, Medchal-Markajgiri.

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2' The averments made in the application, in brief, are that, the Applicants availed a loan of Rs.50,00,000/- from the Respondent by mortgaging the application schedule property in favour of the Respondent as security for the said loan. The Applicants were regular in the payment of roan installments and however, due to losses sustained in their business during covid-19 pandemic, they paid the instalrments in piece_meal basis' subsequently, the Applicants paid the loan installments with additional interest also, without any default, and the latest installment paid by them was in January, 2024. while so, the Applicants came to know that, on 20.01 .2024, the Respondent employees arong with Advocate commissioner visited the schedule property and threatened the tenants of the Appricants to vacate the schedule property and they affixed notice on the main door of the schedure property. The Respondent, despite receiving substantial amounts to the credit of the loan account, is taking coercive steps to harass the Applicants. The Respondent has not served the Demand Notice on the Applicants. The Respondent has not folowed Rules g(1), (2), (s) & (6) and 9(1) of the security Interest (Enforcement) Rules,2oo2. Hence, the sA.

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3' The Respondent filed its Reply statement denying all the adverse allegations made in the application. The contentions of the Respondent, in brief, are that, the Applicants after availing the loan of Rs.5o,0o,00o/_ from the Respondent, committed default and failed to adhere to the terms and conditions of the loan agreements, which resulted in the classification of the loan account as,NpA w.e.f. rr.os.2o2t. So, the ' and sarrle. ''^: received by the Applicants. Since the not respond said Demand Notice, the Respondent (e * 01ru82fl6 -Ev r rd cp ud - ,^{'

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SA.No.41/2024

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issued Possession Notice dt.26.O4.2023 u/s.13(a) of the SARFAESI Act and thereafter published the said possession Notice in English and Telugu newspapers. Since the Applicalts did not respond to the Possession Notice also, the Respondent approached the Ld. Chief Metropolitan Magistrate, Medchal-Malkajgiri District vide Crl.M.P.No.578 /2029, wherein Advocate Commissioner was appointed and he issued vacate notice dt.20.O 1.2024 for taking physical possession of the schedule property. The Respondent has duly forlowed the procedure laid down under the SARFAESI Act and the SA is liable to be dismissed -

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Heard both the Ld. Counsels and perused the Written Arguments filed by the Ld. Counsel for the Respondent.

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Now, the points that arise for consideration are;_

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(i) Whether the Applicants have made out any valid grounds for

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setting aside the proceedings initiated by the 1 st Respondent

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Bank under the SARFAESI Act against the application schedule

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property?

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(ii) To what reliep

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Polnt No.ll):-

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The Applicants have not disputed ava ing of credit facilities from the Respondent by mortgaging the application schedule property. The contention of the Applicants is that, they were paying the loan installments regularly but the Respondent has illegally classified the loan account as NpA and proceeded under u/s.r4 of the sARFAESI Act to take physi of the application schedule property, without serving (2) and the possession Notice u/s. 13(4) of the Respondent contended that the *

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SA.No.41/2024

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Appricants committed default in the repayment of the roan amount and as such the roan account came to be crassified as NpA as per RBI guidelines and the Respondent has duly forlowed the procedure raid down under the SARFAESI Act and the Rules made thereunder while proceeding against the application schedule property and to substantiate the same, the Respondent filed materiar documents arong with its Reply statement. The statement of account filed by the Respondent clearly shows that, the loan account was not maintained regularly by the Applicants and so, the classification of the loan account as NpA by the Respondent cannot be found fault. The Respondent filed a copy of the Demand Notice dt.tg.o4.2o22, issued u/s. rB(2) of the SARFAESI Act, along with postal acknowledgement cards, from which it is very clear that the said Demand Notice was duly served on the Applicants. The Respondent has arso fired a copy of the possession Noitce dt.26.o4.2o23, issued u/s.13(4) of the SARFAESI Act, arong with copies of postal acknowledgement cards and returned postal cover, from which it is very clear that the possession Notice was received by Applicants No.1 & 2 and whereas the said possession Notice sent to Applicant No.3 got returned un-served. The Respondent also filed a copy of photograph depicting affixture of possession Notice and copies of publication of possession Notice in Engrish and Telugu newspapers. So, it is very clear that, the Respondent has duly served Demand Notice u/s.13(2) and the Possession Notice u/s.13(a) of the SARFAESI Act on the Applicants and the Respondent has also duly complied with Rule g(1) & (2) of the security Interest (Enforcement) Rure s, 2oo2. since, the Applicants did not repay the loan outstanding even after receipt of the aforesaid statutory notices, the Respondent has proceeded u/s.14 of the SARFAESI Act, by approaching Ld. cMM, Medchal-Malkajgiri Dir strict, f ror taking php{ar e,p**_Sjoq of the application schedute property. ;o$hd not yet initiated steps for sale of the of Rule 8(5), (6), g(1) of the Rules, rise. So, I hold that, the Applicants {* ,':9. *':,t:=l;, "a'^ "'-,#$ !vxii{'*v

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SA.No.41/2024

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have failed to establish valid grounds for setting aside the steps taken by the Respondent under the sARFAESI Act against the schedule property and the present SA, which is devoid of merits, is liable to be dismissed. Accordingly, this point is answered against the Appricants and in favour of the Respondent.

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Polnt No.lftl:-

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In the result, the present Securitization Application is dismissed. Consequently, the Interlocutory Applications, disposed -- of. No order as to costs. pending if any, shall stand

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E' communicate a copy of this order to the parties concerned.

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l7!;:':"t;'y16i: ;;;L"i.**' transcibed bs her, corected, sisned and pronounced. bs me in the open court on this

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sd/(e. coPrcHANDl PRESIDING OFFICER

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01tu82m

Jahangir Mohd v. Shriram Finance Limited

Case brief

What is this about?

What did the court decide?

Jahangir Mohd v. Shriram Finance Limited

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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