Dismissed

M.Thirupathi Reddy v. Phoenix Arc Private Limited

DRT29 Jul 2025SA/481/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed the Securitization Application filed by an individual applicant seeking to set aside the respondent bank's attempt to take physical possession of mortgaged property. The Tribunal held the applicant failed to establish valid grounds and acted without clean hands.

What did the court decide?

The Securitization Application was dismissed; interim stay was vacated and interlocutory applications closed.

M.Thirupathi Reddy versus Phoenix Arc Private Limited — Banking and Recovery | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDEMBAD

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DATED THIS THE 29TH DAY OF JULY, 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,481 OF 2024

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M. Tirupathl Reddy

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S/o Indira Reddy Aged 36^years,Occ: Cab Driver R/o H.No.11-7, TR0002 Tresure Enclave-2 ALRR lunior College, Nadergul, R.R. Dist

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.......Applicant.

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Versus

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M/s Phoenix ARC Pvt. Ltd Regd. Office : 3'd Floor, Wallace Towers 139740/8/1, Crossing of Sahar Road and Western Express Highway. Vile^ParleEast Mumbai, Maharashtra-4oo 057 Rep by its Authroi its Authorized^OfFicer

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....Res7ondent.

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Counsel for the Applicant^{: Mr.T. Ranadhir Singh}

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Counsel for Respondent :^{Mr. v' Santosh}

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-r 93-ql-B:-

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The Applicant filed the^{present Securitisation Applicationu/s 17} of the Securitization and^{Reconstruction of FinancialAssetsand} Enforcement of Security^{Interest Act, 2002 (hereinafter referredto as} "the Act") to set aside the^{action of the respondentin trying to take} physical possession of the application^{schedule property pursuantto} the advocate commissioner^notice dated^{23.77.2024 issued as per} orders in Crl.MP No.124 of^{2024 on the file of learned Chief Judicial} Magistrate Cum PrinciPal^{Senior Civil Judge,R R.} Pist.^{LB Nagarand} pursuant to possession notice dated !6.05.2024/%1'fi

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Page 2 of4

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SA No.rA1/2024

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The case of the applicant, in brief,^is that^{he availed loanby} mortgaging the application schedule^property as security. He suffered health issues due to Covid-19^pandemlc. Without considering the fact, the respondent came along with advocate commissioner on 23.11.2024 to take^{physical possession} of the application schedule property and served seven days vacate notice and possession notice dated 16.05.2024. At that time applicant realized about classification of account as NPA and initiation of Securitization measures. Demand notice alleged to be issued was never served nor the possession notice was served, affixed and published as per Rules 8(1) and 8(2) of the Security Interest (Enforcement) Rulesr 2002 ("Rules" hereinafter). Basing on illegal notices, the respondent further initiated action u/s 14 of the Act to take^{physical possession} of the asset and obtalned orders by misrepresenting that it followed due procedure. The account is not NPA within the definition under Sec.2(1)(o) of the Act. The respondent failed to properly describe the property in the possession notice. The alleged demand notice is not within the spirit of provisions of the Act, against the orders of the Hon'ble Apex Court in Mardia Chemicals vs. Union of India, 2004 (4) SCC 311 and Hon'ble High Court of Judicature at Hyderabad in Sravan Dall Mill vs. Central Bank of India, AIR 2010 AP 35. Hence the SA. 3. The respondent filed reply statement along with documents. The submissions, briefly, are that the applicant availed loan facility of Rs.25 lakhs and 2.5 lakhs in 2019 from Grihum Housing Finance Limited earlier Poonawalla Housing Finance Limited/Magma Housing Finance Limited ("assignor" hereinafter) against mortgage of application schedule property and due to default in payment, account became NPA on 07 .04.2022/ 08 .05 .2022 as per RBI guidelines, followed by issuance of demand notice dated 09.O2.2024 u/s 13(2) of the Act and duly served. As no payment was made, possession notice

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Pate 3 of4

SA No.481/2024

was issued on L6.05.2024, published the same in'Business Standard' and'Mana Telangana' English and Telugu newspapers on 22.05.2024 besides affixture on secured asset. The applicant concealed the material fact of issuing two separate possession notices and service of notices with an intention to get stay. Respondent relied upon judgment in Tom. Thomas vs. State Bank of India, 2017 (2) DRTC 668. The SA is liable to be dismissed.

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The right of advancing arguments of applicant was forfeited on 07.07.?025 . as learned counsel reported not ready despite adjournments. Learned counsel for the respondent reported no oral arguments and he filed written arguments instead. Perused the same along with the material documents brought on record.

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Now, the points for consideration are as follows : -

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i) Whether the applicant made out any valid ground to quash any of the measures initiated by the respondent against the SA schedule propefty?

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ii) To what relieP

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Point No,(i):

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Admittedly, the applicant availed loan facility from assignor lender against mortgage of application schedule property. Loan account became NPA due to default. A perusal of material documents annexed to the reply statement would show that the demand notice was sent to the applicant and also got published the same in English and Telugu newspapers. The respondent issued two separate possession notices in respect of two loan accounts on 16.05.2024, one for Rs.29,92.801.2 and another for Rs.2,52,310.16^ps, sent the possession notice to the applicant vide postal receipts as at pages 19 and 21, published in English and Telugu newspapers and affixed on the secured asset vide copies of^publication and^photographs annexed as pages 22-26 to the reply statement. I fi|rlz no violation of

/,ry\wa^g (-7 8"

Page 4 of 4

sA No.48u2024

Secs.13(2) and 13(4) of^{the Act,2OO2 or Rules 8(1) and 8(2) of} 2002.

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Though two^possession notices^{have been issued, publishedand} affixed on subject^property, the^{applicant has chosenthe possession} notice with least outstanding^{amountof about Rs.2'52 lakhs to his} advantage and it appears that^{based on the outstanding amountin} the impugned^{possession notice this Tribunal passed interim} conditional stay order against^{taking physicalpossession.The} applicant has not uttered a^{word about the other possessionnotice} issued on the same day with an^{outstandingamount of more than} Rs.29 lakhs. This tantamount to^{suppression of material fact before} the Tribunal. The conduct of the^{applicant shows that he has not} come before this Tribunal with^cleanhands.

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In view of the above^{observations, I find that the applicant} utterly failed to make out any^{valid ground to set aside any of the} measures of the respondent against^{the SA scheduleproperty,} Accordingly SA is liable to be dismissed.

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Point No.(ii)

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