Dismissed

Sri Rajkumar Margam and another v. Phoenix Arc Pvt. Ltd.

DRT5 May 2026SA/17/2025

Case brief

AI extract

What is this about?

Debts Recovery Tribunal at Hyderabad considered an application challenging physical possession proceedings initiated by a secured creditor under the SARFAESI Act. The Tribunal found that statutory notices were duly served and published, and directed the advocates commissioner to proceed with possession.

What did the court decide?

The application was dismissed; proceedings for taking physical possession of the schedule property through advocate commissioner were permitted.

Sri Rajkumar Margam and another versus Phoenix Arc Pvt. Ltd. — Specific Performance | DRT (2026)

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IN THE DEBTS RECOVERY^{TRIBUNAL _ 1 AT HYDERABAD}

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DATED THIS THE 5TH^{DAYOF MAY, 2026}

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PRESENT: SRI GUMMADI^{GOPICHAND, PRESIDING OFFICER}

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SA.No.17 /2025

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Sri Rajkumar Margam, S/o M.Krishna, aged³⁹ Years, Occ: business

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Smt. Renuka Margam, W/o RAj kumar margam, Aged 35 years, Occ:business Both are R/o H.No.18-O5-158, Thotla Wada, Karimabad, Warangal-5O6002 R/o H.No. 18-05-¹ 58(new), 18/338/2(o1d) Thotla Wada, Karimabad, Warangal-506002

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... Applicants

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Versus

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M/s Phoenix ARC Pvt.Ltd, Rep. by its Authorized Officer Situated at Wallace Towers, 3'd floor, 139-140/I, Crossing of Sahaar Road & Western Express Highway, Vile Parle Estate, Mumbai-SO0 057.

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... Respondent

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Counsel for the Applicants : Sri D. Roghatrulu Counsel for Respondent : Sn V. Santosh

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:13.O3.2O26 :05.05.2026 :06.05.2O26

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ORDER

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[5ilAYrrp6 * B^1. This applicdtl is filed by the Applicants u/s. 17 of the SARFAESI enging the proceedings initiated by the Respondent for Rs,:^*ryffi# possession of the schedule property through Advocate

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commissioner pursuant to the^{orders ofLd.CJM,Warangalin} Crl.M.P.No.l52l24^{pursuant to the possession notice dt.16.05.2024} and to declare the^{sameas illegal and void.}

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The averments made in the^{application, in brief, are that:}

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The Applicants availed LAP loan^{of Rs.23.50 lakhs from Magma} Housing Finance in the^{year 2O2O against the mortgage of schedule} property and the Applicants were^{regularly paying the instalments.} Subsequently, the loan account^{was assignedto the Respondent} herein. Due to Covid-19 and^{medical problems,the Applicantscould} not pay some instalments and^{thereafter, the Applicants requested the} Respondent to regtilarize the loan account.^{But withoutconsidering} the same, the Respondent illegally declared^{the loan account as NPA.} The Respondent without serving demand^{noticeand possession notice} to the Applicants, straightaway initiated^{proceedingsu/s 14 of the} SARFAESI Act, 2OO2 for taking^{physicalpossession of the schedule} property through advocate commissioner pursuant to the^{orders of} Ld.CJM, Warangal and SO, the said^proceedings are^{not legal and} valid. The impugned possession notice was neither^{publishedin two} daily newspapers nor affixed on the schedule^{property. Hence the SA.}

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The Respondent filed their Reply denying all the adverse allegations made in the SA and contended that the Applicants availed credit facility from Griham Housing Iinance Ltd., earlier known as Magma Finance Ltd against the mortgage of schedule property. The >-" ,fft$e$Uffiailed^{two loans from the Respondentcompany and} ii * ;! &0":o:%":t":1 ::^{aerautt^t"} ,:'rT-::' ":^{the dues} '",^": ": il * ^^{.the default.,d[mmitted by the Applicants, the Respondent classified} [g, U I ltld] '[B[" "iF", as NPA on 31.os.2o21 and issued demand notice ii..%-,* dt.01.q3.ffi "7" 13(2) of the SARFAESI Act, 2oo2 and the said ''W;,#ffW,nttotheAppli.,1..throughRegd.post.Thereafter,the >-:i

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Respondent issued possession notice^{dt.17.O5.2O24 and sent the said} notice to the Applicants through^{Regd.Post and the same was} published in Business Standard and Mana Teiangana^daily newspapers and the said notice was also^{affixed on the scheduie} property. Thus the Respondent has duly followed the^{procedure and} there are no violations. Accordingly, Respondent^{prayed to dismissthe} SA.

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Heard Ld. Counsel for the Applicants and^{Ld.Counselfor the} Respondent. Perused the material brought^{on record.}

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Now the points that arise for consideration^are

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i. whether the Applicants haue established any ualid^grounds for challenging tle proceedings initiated bg the Respondent for^taking phgsical possession of the schedule propertg u/s 14 of the SARFAESIAcI, 2 0O2 through aduocate commissioner?

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ii. To uhat relief ?

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Point IVo.lif :-

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During the course of arguments, Ld. Counsel for the Applicants and Ld. Counsel for the Respondent reiterated their respective versions as stated supra.

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The undisputed facts of the case are that the Applicants availed loan the Respondent and and thereafter, committed default in dues.

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on of the Applicants is that the Respondent without

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j f,T f,B?')f,ft"o"* X. serving demand tice and possession notice, straightaway, initiated physical possession of the schedule property

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R$w:td"w dg:'iAg

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through advocate commissioner u/s 14 of the SARFAESI Act,^2OO2 without following the procedure and so, the said proceedings initiated by the Respondent against the schedule^propert5r are null and void.

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Per contra, Respondent contended that after availing the loan facilities, 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 and the Respondent issued all the statutory notices to the Applicants by duly following the procedure contemplated under the provisions of SARFAESI Act, 2OO2 and Rules made thereunder and also in taking physical possession of the schedule property u/s 14 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 on 31.05.2021, Respondent issued demand notice dt.O1.O2.2O24 u/s 13(2) of the SARAFAESI Act, 2OO2 and the said notice was sent to the Applicants through Regd.Post as evidenced by the postal track reports filed by the Respondent and the said notice was also published in two daily newspapers as evidenced by the copies of paper publication filed by the Respondent. Thus there is valid service of demand notice on the Applicants. When the Applicants failed to comply with the said notice, the Respondent issued possession notice dt.17.05.2024 u/s 13(a) of the Act,2OO2 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 $-Telugu^{and Englishdaily newspapersas evidenced by the} blication filed by the Respondent and the said notice the schedule property as depicted in the copy of tF e3 the Respondent. Thus, the Respondent has duly of Security Interest (Enforcement) Rules, 2OO2 in ij^{rft:fi1$rd:l,#} otice dt.17.05.2024. W;;w

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As per the provisions of Section 14 of SARFAESI Act, 2OO2, after issuance of possession notice uf s 13(a) 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.CJM, Warangal u/s 14 of the SARFAESI Act, 2OO2 by liling Crl.M.P.No.l52l24 for appointment of advocate commissioner for taking physical possession of the schedule property. Ld.CJM,Warangal, 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. So, the said proceedings initiated by the Respondent for taking physical possession of the schedule property are perfectly legal and valid.

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So, considering all the circumstances, I am of the opinion that the Applicants are not entitled to any relief as there are no merits in the SA. So, I see no ground warranting interference of this Tribunal with the proceedings initiated by the Respondent for taking physical possession of the schedule property u/s 14 of the SARFAESI Act,2OO2. Accordingly, this point is answered in favour of the Respondent and against the Applicants.

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Point No.(ii):-

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25 is dismissed as there are no merits.
d,?'4
tue
).t ^ ? -- -., ^--- *
s 8.5"&u.lu$, , rlocutory Applications, pending if any, shall stand
as to costs.
W

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Communicate a copy of this order to the parties concerned.

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(Dctated to the P.S, transcribed bg her, corrected, signed and pronounced bg me in the open court onthis the Sth dag of Mag,, 2026)

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sd/(G. GOPr CHANDI PRESIDING OFFICER

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Sri Rajkumar Margam and another v. Phoenix Arc Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Sri Rajkumar Margam and another v. Phoenix Arc Pvt. Ltd.

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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