Dismissed

Babu Challa Reddy v. Ms Gic Housing Finance Private Limited

DRT9 Apr 2026SA/112/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal examined an application challenging the Respondent's proceedings u/s. 14 of the SARFAESI Act, 2002, to take physical possession of mortgaged property. The Applicants alleged failure to follow RBI guidelines for NPA classification and service of notices. The Tribunal held the Respondent followed statutory procedures, including valid service of demand and possession notic

What did the court decide?

The Single Application No. 12/2024 was dismissed for lack of merits; interim applications pending if any stand disposed of.

Babu Challa Reddy versus Ms Gic Housing Finance Private Limited — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL -¹ AT^HYDERABAD

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DATED THIS THE^gTH DAY OF APRIL, 2026

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PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.No.112/2024

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Sri Babu Challa Reddy, S/o Challa Hanumanth Reddy, Aged 54 years, Occ:RTC employee

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R/o 13-139, Krishna Reddy Colon, Ward No.4, Swaroop Nagar, Bibisaheb Maqta, Peerjadiguda, Uppal, Hyderabad-500039

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Mrs.Reddy challa Manjula, W/o Sri Babu Challa Reddy, Aged 45 years, Occ:home maker R/o 13-139, Krishna Reddy Colon, Ward No.4, Swaroop Nagar, Bibisaheb Maqta, Peerjadiguda, Uppal,

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Hyderabad-SOO O39. ... Applicants

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Versus

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GIC Housing Finance Ltd. Rep. by its Authorized Officer Situated at 4m floor, 3-6-43814, Narsapur House, Himayath Nagar, Hyderabad-SOO 029. .. . Respondent

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Counsel for the Si Apurua M.Gokhale
Counsel for Si Dhirendra Kumar Singh
12.03.2026
.04.2026
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1. This Applicants u/ s. 17 of the SARFAESI Act,
"qd
2002, initiated by the Respondent for
taking physical possession of the schedule property through Advocate

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commissioner pursuant to the orders of^{Ld.CMM,Malkajgiri District,} Hyderabad in Crl.M.P.No.46l24 to declare the same as^{illegal and void.}

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The averments made in the application, in brief, are that: The Applicants availed mortgage loan of Rs.21 lakhs from the Respondent in the year 2015 against the mortgage of schedule^property and regularly paying the instalments but the Respondent charged heavy rate of interest and so, the Applicants requested the Respondent for settlement of the entire loan. While things stood thus, the Respondent illegally declared the loan account of the Applicants as NPA on 29.06.2023 without following the RBI guidelines. Thereafter, the Respondent issued demand notice dt. 18.06.2023 claiming exorbitant amount of Rs.15,55,366/- Thereafter, without issuing possession notice, the Respondent obtained orders in Crl.M.P.No.46 124 on the file of Ld.CMM, Malkajgiri District, Hyderabad for appointment of advocate commissioner for taking physical possession of the schedule property. The Respondent Without serving demand notice and possession notice to the Applicants, straightaway initiated proceedings u/s 14 of the SARFAESI Act, 2OO2 for taking physical possession of the schedule property through advocate commissioner pursuant to the orders of Ld.CMM, Malkajgiri District, Hyderabad and so, the said proceedings are not legal and valid.. Hence the SA.

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The Respondent filed Reply denying all the adverse allegations made in the SA and contended that the Applicants availed mortgage loan of Rs.17,67,652/- to be repaid it 24O months, from the Respondent against the mortgage of schedule property. In view of the default Applicants, the Respondent issued several reminders account of the Applicants was classified as NPA on fp,2e.ot. 3as B. S"ia.tines^{of RBI. Thereafter,the Respondent} issued demand nori& dt.t8.07.2023 and the said notice was sent to ,ng^q#fl"rm" Regd. post and the said notice was also 2

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published in two daily newspapers.. Thereafter, the Respondent issued possession notice dt.09.11.2023 and the said notice was sent to the Applicants and the szune was published in two leading newspapers and also affixed on the schedule property. Subsequently, the Respondent proceeded u/s 14 of the SARFAESI Act, 2OO2 for taking physical possession of the schedule property pursuant to the orders of Ld.CMM, Malkajgiri District, Hyderabad in Crl.M.P.No.46l24 and the advocate commissioner issued notice to the Applicants demanding to handover the possession of the schedule property and challenging the said proceedings, the Applicants liled the present SA and obtained interim stay and complied with the conditional order but still the account is not come out of the ambit of NPA. Thus the Respondent has duly followed the procedure and there are no violations. Accordingly, Respondent prayed to dismiss the SA.

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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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whether the Applicants haue establisLed ang ualid grounds for challenging the proceedings initiated bg tle Respondent for taking

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phgsical possession ofthe schedule propertg u/ s 14 ofthe SARFAES/ Act, 2OO2 through aduocate commi.ssioner?

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ii. To what relief ?

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Polnt trIo.(t):-

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During

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ents, Ld. Counsel for the Applicants and Ld.
t reiterated their respective versions as stated
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The undisputed facts of the case are that the Applicants availed mortgage loan from the Respondent and created equitable mortgage in respect of the schedule property to secure the said loan and thereafter, committed default in repaying the loan dues.

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The specific contention ofthe Applicants is that the Respondent declared the loan account as NPA without following the guidelines of RBI and without serving possession notice, straightaway, initiated proceedings for taking physical possession of the schedule property through advocate commissioner u/s 14 of the SARFAESI Act, 2002 without following the procedure and so, the said proceedings initiated by the Respondent against the schedule property are null and void.

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Per contra, Respondent contended that after availing the loan, the Applicants committed default in repaying the loan dues as per the terms of the loan agreement and so, the loan account was classified as NPA on 29.OL.2023 as per the guidelines of RBI but not on 29.06.2023 as alleged by the Applicants. The Respondent has duly followed the procedure contemplated under the provisions of SARFAESI Act,2OO2 and Rules made thereunder and in issuing all the statutory notices to the Applicants and also in taking physical possession of the schedule property u/s l4 of the SARFAESI Act,2OO2.

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To substantiate their contention, Respondent filed material documents along with the Reply filed by them. As per the said documents, it is clear that after classifying the loan account of the Applicants as NPA as per the guidelines of RBI, the Respondent issued demand notice dt. 18.07.2023 u/s l3(2) of the AESI Act, 2OO2 and the said notice was sent to the Applican t as evidenced by the postal track reports Iiled by, said notice was also published in Telugu as evidenced by the copies of paper 6tio"^{r,r8dudpn"&Fp"d} 1t. Thus there is valid service of demand {i 4 ).dr €ij Wr,*'---"dq

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notice on the Applicants. As the Applicants failed to comply with the said notice and also not raised any objections to the said notice, the Respondent issued possession notice dt.09.11.2023 u/s 13(4) of the Act, 2002 and the said notice was sent to the Applicants through Regd.post as evidenced by the postal track reports liled by the Respondent. The said possession notice was published in Telugu and English daily newspapers as evidenced by the copies of paper publication filed by the Respondent and the said notice was also affixed on the schedule property as depicted in the photographs filed by the Respondent. Thus, the Respondent has duly followed Rule 8(1)&(2) of Security Interest (Enforcement) Rules, 2002 in issuing possession notice dt.09.1 1.2023.

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As per the provisions of Section 14 of SARFAESI Act, 2002, after issuance of possession notice u/s 13(4) of the SARFAESI Act, 2OO2, the secured creditor is at liberty to approach the concerned District Magistrate or Chief Judicial Magistrate for taking physical possession of the secured asset. In the instant case, after issuing demand notice and possession notice to the Applicants, the Respondent being secured creditor, approached Ld.CMM, Malkajgiri District, Hyderabad u/s 14 of the SARFAESI Act, 2002 by liling Crl.M.P.No.46 124 for appointment of advocate commissioner for taking physical possession of the schedule property. Id.CMM, Malkajgiri District, Hyderabad, after considering the material on record, appointed advocate commissioner for taking physical possession of the schedule property and the said advocate commissioner issued notice to the Applicants to vacate the schedule property and admittedly, the Applicants received the said notice. So, the said proceedings initiated by the Respondent for taking physical possession ofthe schedule property are perfectly legal and valid.

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ffno

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circumstances, I am of the opinion that the to any relief as there are no merits in the SA. interference of this Tribunal with the ndent for taking physical possession of

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the schedule property u/s¹⁴ of the^{SARFAESIAct,2002. Accordingly,this} point is answered in favour of the Respondent^{and againstthe Applicants.}

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Point No.(tl)r

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