Dismissed

Dharma Srinivas v. LIC Housing Finance Ltd.

DRT23 Sept 2025SA/47/2025

Case brief

AI extract

What is this about?

In a Securitization Application seeking to quash a possession notice under Section 13(4) of the SARFAESI Act, the Tribunal held that the financier complied with statutory requirements despite NPA classification. The applicant failed to establish illegality in the notice service, leading to dismissal of the application.

What the court decided

AI extract

Dharma Srinivas versus LIC Housing Finance Ltd. — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERY^TRIBUNAL -^{II AT HYDERABAD}

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DATED THIS THE 23RD^{DAY OF SEPTEMBER, 2025}

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PRESENT: SH. RAMESHWAR^{KOTHE, B.Com,L'LB. (Hons.), M'A'} PRESIDING OFFICER

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Securitization Application^{No.47OF 2025}

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Dharma Srinivas S/o D. Adinarayana Aged about 45^years Occ: Private Employee H.No.lZ-21 22, Plot No.22 Sy.No.533, Ayodhya^{Nagar, Dammaieguda} Medchal-Mallkajgiri^{District,Telangana-500083}

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..,....APPlicant.

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Versus

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LIC Housing^{Finance Limited} Rep by its Authorized^Person c/i e6moay^{Life Building,zndFloor} 45/47 , veer^NarimanRoad Mumbai, Maharashtra^{State 400001}

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UC Housing^{Finance Limlted} Rep by its Authorized^Person Clo 207,^{2nd Floor, Krishe Sapphire} South Block,^SY.No.88 MadhaPur,^{HitechCitY Main Road} Hyderabad,^{TelanganaState 500081}

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: Mr. G. Dinesh^Patil Counsel for the^APPlicant

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: Mr.Hari Prasad^Podila Counsel for^Res?ondent

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-: (L-B.D-E-B:-

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The Applicant^{filed the present Securitisation Applicationu/s 17} of the Securitizatlon^{and Reconstruction of FinancialAssets and} Enforcement of^{SecurityInterestAct, 2002 (hereinafter referredto as} "the Act") to^{quashthe possession notice dated ll'12'2024issuedby} the respondent^{FI under Sec.13(4) read with Rule 8(1) angS(2)of}

//Mnq'

Page 2 of4

SA No.422025

Security Interest^{(Enforcement)} Rules, 2002^("Rules" hereinafter) in respect of the application schedule property.

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The case of the applicant briefly, is that he availed two housing loans totalling to Rs.33.15 lakhs from 2nd respondent by mortgaging the SA schedule property as security. He was regularly paying the instalments. Without following the RBI Circulars the respondent charged penal interests, capitalized the amount and classified the account as NPA illegally. As per his response to demand notice dated 28.08.2024, he lost his job during Covid-19 and is ready to pay EMIs regularly now. The respondent has not followed the provisions of the Act under Secs.13(2) and 13(4) and Rules 8(1) and 8(2) of Security Interest (Enforcement) Rules, 2002. Hence this SA.

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The respondent bank filed reply statement along with documents. The submissions, briefly, are that the applicant opted availed RBl-mandated Covid moratorium and subsequenuy opted for One Time Restructuring (OTR) in terms of addendum sanction letter dated 27.03.2027. The unpaid interest during Covid moratorium was capitalized as per RBI Circular. The respondent prompuy issued replies to the multiple representations of the applicant. The payments were insufficient to bring the loan accounts to standard status and hence classified as NPA. The Securitization measures have been initiated by issuing demand notice dated tZ.Og.2OZ4. There was no response to demand notice, possession notice was issued on 71.72.2024 sent by registered post to applicant, published in 'Business Standard' and 'Mana Telangana, newspapers on 17.12.2024 besides affixing on secured asset. There is no lapse or illegality in the action taken by the respondent against the secured ass-et. SA is liable to be dismissed. N*s

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Page 3 of4

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sA No.47l2025

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Representative of^{learned counsel for applicantreported no oral} arguments. Heard learned^{counselfor respondentFI. Perused the} written arguments filed for^{the applicant and the materialdocuments} brought on record.

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During the course of arguments,^{learned counsel for the} respondent FI reiterated^{the versionas In the replystatement'} Learned counsel further^{submittedthat all the payments made by the} applicants were duly^{reflected in the account,applicant availed RBI-} mandated Covid moratorium,^{the EMI increaseis a direct resultof the} capitalization of unpaid^{interest and extension of tenureunder OTR} and the outstanding^{dues are accurate and basedon restructuring} terms agreed upon by the^{aPplicant. Whilereferringto the documents} annexed to the^{reply statement,the learned counselsubmitted that} respondent followed due^{procedureof law and accordinglySA is liable} to be dismissed.

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Now, the^points that^{arise for consideration are :-}

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(i) Whether the applicant made out any^{valid ground to set} aside the^{possession notice dated 11.12'2024issued under} sec.13(4) of the Act,^{2002against the applicationschedule}

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property, as PraYed for?

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(ii) To what relieP

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Point No.(i):

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The contention of the^{applicant is that though amountswere} collected for regularizing the^{account,the respondent classlfied the} account as NPA illegally and^{his accountdoes not fall within the} definition of NPA.^{A bareperusalof the statement of account filed by} the respondent FI^{would reflect the entries pertaining to continuous} and irregular^{payments and penal chargesand hencehe cannot be}

//M...o^'n

L-t"

Page 4 of4

sA No.47l2025

permitted to question the classification of NPA. However, it is not disputed by the applicant that he availed Covid-related^moratorium as mandated by the RBL The respondent^FI affirms that the^unpaid interest was capitalized in the form of increased EMI and extension of tenure under One-time Restructuring terms of which^had been^agreed upon by the applicant. Hence the contention of the applicants^{on non-} following of RBI Circular is not acceptable.

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The documents filed by the respondent FI along with its reply statement amply^prove compliance of^provisions under Sec.13(2) and 13(4) of the Act read with Rules 8(1) and 8(2) of the Rules of 2002ⁱⁿ serving demand notice,^possession notice and^publication and affixture of^possession notice. The applicant failed to make out any valid ground to^quash the^possession notice dated 11.12.2024 and accordingly SA is liable to be dismissed.

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Point No.(i:):

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9, In the result, the Securitization Application fails and is hereby dismissed.

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

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Communicate a copy of this order to the^parties concerned and upload in the official website.

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(Typed to my dictation by the PS, coftected, signed ond pronounced by me in the open couft on this the 2i'd doy ol September, 2025).

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frw*^ (PAf,IESHWAR KOTHE) PRESIDING OFFICER

Dharma Srinivas v. LIC Housing Finance Ltd.

Case brief

What is this about?

What the court decided

Dharma Srinivas v. LIC Housing Finance Ltd.

Case brief

What is this about?

What the court decided

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