Dismissed

Juhi Mariam Jacob and others v. Auxilo Finanace Pvt. Ltd.

DRT13 Apr 2026SA/172/2023

Case brief

AI extract

What is this about?

In this Securitization Application under Section 17 of the SARFAESI Act, the Tribunal dismissed the petition challenging the Respondent's actions to take physical possession and auction the mortgage property despite alleged procedural lapses and defense status as an unsecured financial institution. The Court affirmed that the Respondent followed due process.

What did the court decide?

The Securitization Application was dismissed, and pending interlocutory applications were disposed of.

Juhi Mariam Jacob and others versus Auxilo… — Contract and Commercial Disputes | DRT (2026)

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IN THE DEBTS RECOVERYTRIBUNAL- IAT HYDERABAD

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DATED THIS THE 1 3TH DAY OF APRIL, 2026

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PRESENT: GUMMADI GOPICHAND, PRESIDING OFFICER

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sA.NO.172/2023

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Juhi Mariam Jacob, D/o. Jacob Chacko, Female, aged about 27 years, Occ: Student, R/o. Flat No. 14, lna Floor, (Flat No. 1, Block IV) Bharyanagar, Municipal No.l-l-79 12O7, RTC X Roads, Chikkadpally, Musheerabad, Hyderabad-500020, Telangana.

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Jacob Chacko, S/o. late Chacko, Male, aged about 56 years, Occ: Pvt. Service, R/o. Flat No.14, lna Floor, (Flat No. 1, Block IV) Bhagranagar, Municipal No.l-l-79 12O7, RTC X Roads, Chikkadpally, Musheerabad, Hyderabad-500020, Telangana.

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Suja Jacob, W/o. Jacob Chacko, Female, aged about 54 years, Occ: Household, R/o. Flat No.14,2"4 Floor, (Flat No.l, Block IV) Bharyanagar, Municipal No.l-l-79 12O7, RTC X Roads, Chikkadpally, Musheerabad, Hyderabad-500020, Telangana.

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Applicants.

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Versus

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6 Auxilo Finserve Pvt. Ltd.,Finserve Pvt. Ltd.,Ltd., Office: 13 & 14, Lower & 14, Lower 14, Lower Groun Art Guild House, Guild House, House, Phonix Marg, KurlaWest, Mumbai "t1'g npR^,rpe its duly constituted Aduly constituted AA Officer. fu,*t"# Counsel for tlrc Applicants Ramulu. Counsel for the Respondent Sn ./V..B. Sudarshan.

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M/s. Auxilo Finserve Pvt. Ltd.,Finserve Pvt. Ltd.,Ltd., Regd. Office: 13 & 14, Lower & 14, Lower 14, Lower Groun B Wing, Art Guild House, Guild House, House, Phonix LBS Marg, KurlaWest, Mumbai Through its duly constituted Aduly constituted AA Authorized Officer.

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29.O1.2026

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Reserued on 29.O1.2026 Pronounced on 13.04.2026 Uploaded to the Website on 15.04.2026

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SA.No.172/2023

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.:ORDERi

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The Applicants filed the present Securitization Application u/s.17 of the SARFAESI Act,2OO2, challenging the action of the Respondent to take physical possession of the application schedule property in pursuance of the Advocate Commissioner's Notice dt.2l .O4.2O23, pursuant to the orders dt.24.O3.2O23, passed by the Ld. IX Addl. Chief Metropolitan Magistrate, Hyderabad, for taking physical possession of the schedule property.

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.) The averments made by the Applicants in the application, in briet are as under:-

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The Applicants No.2 & 3 came to know that the Respondent has obtained order dt.24.03.2o23 from the Ld. IX Addl. CMM, Hyderabad in Crl.M.P.No.236l2O23, behind the back of the Applicants, without any notice to the Applicants and the Advocate Commissioner appointed in the said proceedings issued Notice dt.2L.O4.2023 to the person available in the schedule property, to vacate the premises within 15 days. The ld. Magistrate has lailed to see that the repayment schedule will commence only after completion of the education of the student and the Education loan account of Applicant No. 1 cannot be classilied as NpA. The Ld. Magistrate has failed to see that the Applicants have paid the instalments regularly and requested the Respondent to reschedule the loan account as per the guidelines of RBI during Covid period. has also failed to see that the mandated notices

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3lu/s-.s)^{aIi.J\4)of the SARFAESIAct} have not been complied

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l fu witrent.

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ii;^{1.5 rPR.2020} I e -The^Applicants not committed any default in the loan account ,%toa,r,. apd€, have not created any security interest in favour v t and the Respondent is not a secured creditor. The ' ke cannot come under the purview ofthe provisions of the SARFAESI Act as it is not a banking company incorporated under

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5,A.No.172/2023

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the Banking Regulations Act, 1949. Respondent will not fall under the definition of Financial Institution to invoke the provisions under the SARFAESI Act.

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iii) The Respondent has not served Demand Notice u/s.13(2) and the Possession Notice u/s.13(4) ofthe SARFAESI Act on the Applicants. The Respondent has not affixed the Possession Notice on the schedule property and has also not published the said notice in two newspapers. The Applicant No.1 is not in India on the alleged dates of Demand Notice and Possession Notice and the alleged publications are not valid and binding against the Applicants. Hence, the SA.

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J. The Respondent filed its Reply Statement denying all the adverse allegations made in the application. The contentions of the Respondent, in brief, are as under:-

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The Applicants availed Education Loan and thereafter committed default in the repayment of the loan amount. Despite regular followup and repeated demands made by the Respondent, the Applicants have failed and neglected to regularize the loan account. Hence, the loan account was classified as NPA with effect from O9.O2.2O22 in accordance with the RBI guidelines. The Respondent issued Demand Notice dt.07.O3.2O22, u/s.13(2) of the SARFAESI Act, calling upon the Applicants to pay the outstanding dues of Rs.36,91,907/- within 60 days and the said notice was served on the Applicants. The Applicants neither sent any reply to the said Demand Notice nor paid the outstanding dues. So, the Respondent

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.rnr issued Possession Notice u/s. 13(a) of the SARFAESI Act, on

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-'^6 .: .2022 and,.t.*-:"]. possession of the property.

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3o . - flfe Respondent published the Possession Notice -schedule in 'The New Indian 1 U tPfl il26 $$p..""' Engtish and 'Mana Telangana' Tetugu newspapers 02.06.2022. The Respondent approached the Ld. IX Addl. Chief

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etropolitan Magistrate, Hyderabad by filing Cr1.M.P.No.236 of

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:'A.No.172/2023

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2023 uls.l4 of the SARFAESI Act, wherein Advocate Commissioner was appointed and he issued notice dt.2l .O4.2O23 to the Applicants to vacate the schedule property within 15 days. As per the guidelines Iaid down by the Hon'ble Supreme Court, it is not necessary to issue notice to the borrower for initiating proceedings u/s. 14 before CMM Courts. Ld. Magistrate has appointed the Advocate Commissioner after his due satisfaction of compliance of the provisions of the SARFAESI Act and the Rules made thereunder by the Respondent.

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ii) The Respondent is having networth of Rs. 167654.92 lakhs as per the linancial statement dt.O2.O5.2O23 and accordingly the

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'Respondent is entitled to proceed under the SARFAESI Act as per the RBI notification dt.24.O2.2O2O. The Respondent has followed due process of law to recover the debt due by proceeding against the mortgaged property and so the present SA may be dismissed.

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Heard both sides. Ld. Counsels appearing for both parties liled their respective Written Arguments.

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Ld. Counsel for the Applicants, in his written arguments apart from reiterating the version of the Applicants, as stated supra, further contended that, the present SA was earlier dismissed for default on 24.10.2024 and taking advantage of the said order, the Respondent proceeded u/s. 14 of the SARFAESI Act, by frling Crl.Mp.No.26 of 2O2S on the file of Ld. IX Addl. CMM, Nampally, Hyderabad and obtained orders of appointment of Advocate Commissioner dt. 1O.01.2025 for taking physical possession of the schedule property.

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Ld. Co ent, in his written arguments, contended tha for default on 24.10.2024 as the of several opportunities to them, failed to

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'before this Tribunal. After dismissal of the the Ld. IXACMM, Nampally, Hyderabad,

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Act seeking appointment of Advocate

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SA.No.172/2023

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Commissioner and vide order dt.10.01.2025 in Crl.MP.No.26 of 2025, Advocate Commissioner was appointed for taking physical possession of the schedule property. The Advocate Commissioner took physical possession of the schedule property on 14.02.2025. Thereafter, the Respondent issued a composite notice dt.23.O4.2025 under Rules 8(6) & 9(1) of the Securit5r Interest (Enforcement) Rules, 2OO2, for auction of the schedule property on 27 .O5.2025. In the said auction, one Mr. K. Madhu stood as highest bidder and paid Rs.48,50,000/- and the Respondent has issued Sale Certificate to him on 18.05.2025. The present SA was restored by this Tribunal on O4.O8.2O25, which is much after issuance of Sale Certificate to the Auction Purchaser. The Possession Notice and Sale Notice was served on the Applicants but, they failed to redeem the mortgage. The Hon'ble Supreme Court in " Celir LLP Vs. Bafna Motors" [2023^{I.N. SC 838],explicitly held that a borrower has the right to redeem} the mortgage u/s.13(8) of the SARFAESI Act, only up to the point of publication of auction notice i.e., before publication of auction notice and further held that there is no requirement of separate notices under Rule 8(6) and 9(1) and the secured creditor can give a composite notice under the said rules. Accordingly, Ld. Counsel for the Respondent prayed for the dismissal of the present SA.

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Now, the points that arise for consideration are,-

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i) Whether the Applicants have made any valid grounds for setting aside the proceedings initiated by the Respondent under the SARFAESI Act and e thereunder against the application

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ii) To what re * 15 npn eozn 2.. *' t
Polnt No.ll)t *ji:
[+rd6

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Ther is no dispute the Applicant No.1 availed educational loan from the R and the Applicants No.2 & 3 stood

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SA.No.172/2023

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as guarantors for the said credit facility. Even though it is contended by the Applicants that they have not created securit5r interest over the schedule property in favour of the Respondent and that the Respondent is not a secured creditor, they failed to explain as to how the original title deeds of the schedule property went into the hands of the Respondent. It is not the case of the Applicants that they are holding the original title deeds of the schedule property with them. Under such circumstance, I do not find any merits in the contention of the Applicants that the Respondent is not a secured creditor. The Applicants have admitted in their Written Arguments dt. 10.05.2023 that, though they paid the loan instalments regularly before the Covid pandemic, they could not pay the loan instalment during the Covid pandemic. So, in view of non-payment of loan instalments, the loan account of the Applicants was classilied by the Respondent as NPA on O9.O2.2O22. The Respondent has issued Demand Notice dt.07.03.2022 u/s. 13(2) of the SARFAESI Act demanding the Applicants to pay the outstanding dues of Rs.36,91,907/- within 60 days and as the Applicants failed to comply with the said demand, the Respondent issued Possession Notice dt.26.O5.2O22 and took symbolic possession of the schedule property. The Respondent, in its material documents filed along with its Counter, filed copies of Demand Notice d1O7.O3.2022, Possession Notice dt.26.05.2022, copies of postal receipts, postal track reports, photograph depicting affixture of Possession Notice on the schedule property and copies of publication of Possession Notice in The New Indian Express' English daily and 'Mana Telangana' Telugu daily newspapers dt.02.06.2O22. As the Applicants failed to liquidate their liability even after issuance of Demand Notice and Possession Notice, the Respondent proceeded u/s.14 of the SARFAESI Act by frling Crl.M.P.No.236l2023 on the file of Ld. IX Additional Chief Metropolitan

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obtained Advocate Commissioner Warrant. Pursuant to Commissioner issued Notice dt.21.04.2023 to the premises and handover vacant possession of the 15 days. 't\ pn fffr -*4--,-s$.# )i;ii.t,,j',.,/

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S'A.No.172/2023

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Aggrieved by the aforesaid measures taken out by the Respondent, the Applicants frled the present SA and they have also obtained conditional stay orders from this Tribunal and complied the same. However, during pendency of the proceedings, the Applicants remained absent consistently and failed to prosecute the SA. So, this Tribunal dismissed the present SA for default vide order dt.24.1O.2024.

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After dismissal of the present SA, the Respondent again proceeded u/s.14 of the SARFAESI Act by filing Crl.M.P.No.26 12025 on the file of Ld. IX Addl. Chief Metropolitan Magistrate, Nampally, Hyderabad, and obtained Advocate Commissioner Warrant on 10.01.2025 for taking physical possession of the schedule property. The Advocate Commissioner issued notice dt.27.01.2025 to the Applicants to vacate the premises and handover physical possession of the schedule property. The Respondent in its material documents frled along with its Counter in MA.IR.No.140 12025, annexed copies of Advocate Commissioner's notice dt.27.O1.2025, copies of postal receipts & postal track reports, copies of photographs depicting affixture of Court order and Advocate Commissioner's notice on the schedule property, which amply prove that, the Advocate Commissioner's notice is duly served on the Applicants. Thereafter, the Advocate Commissioner took physical possession of the schedule property by drawing inventory and conducting Panchanama on 14.02.2025. The Respondent has affixed the Public Notice of taking physical possession on the schedule property. The Respondent has published Physical Possession Notice in Business Standard' English and T,[ava Telangana' daily newspafers dt.l7 .O2.2O25. The Respondent Bank in its material documents filed in MA.lR.No.l40 12025, has filed copies

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of inven chanama, photographs depicting affixture of Physical the schedule property and copies of publication of Telugu newspapers, which amply establish /f$lt.tt".m^ilEq $at^{the Rffiondent} duly followed the procedure laid down under gure dfifflf,F)ffi$te Interest (Enforcement) Rules, 2002, while rlt, . - - property. Thereafter, the Respondent

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:'A.No.172/2023

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proceeded for the auction sale of the schedule property by issuing e- Auction Notice dt.23.04.2o25 under Rules 8(6) & 9(1) of the Security Interest (Enforcement) Rules, 2OO2, fixing the auction on 27.05.2025. The Respondent Iiled copies of Sale/Auction Notice dt.23.04.2025 along with postal slips along with its Written Arguments and from the said documents, it is clear that the Respondent has duly sent the said notice to the Applicants. The Respondent has also filed copies of publication of e-Auction Notice in 'Nava Telangana' Telugu and Business Standard, English newspapers dt.23.O4.2O25. In the auction conducted by the Respondent on 27.O5.2O25, one Mr. Madhu Kothapalli, S/o. Ramaiah Kothapalli, stood as highest bidder for Rs.48,50,000/- in respect of the schedule property and upon deposit of entire bid amount, the Respondent issued Sale Certificate dt.lg.OT.2O2S in favour of the said auction purchaser, a copy of which is liled by the Respondent along with its Written Arguments.

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After completion of the entire sale process of the schedule propert5r, the Applicants again approached this Tribunal for the restoration of the present SA and considering which, this Tribunal restored the present SA to file vide order dt.04.08.2o25. Even though the Applicants filed petitions to amend the SA to challenge the aforesaid action of the Respondent for taking physical possession and sale of the schedule property, they did not pursue the same and the said petitions remained un-numbered. So, the measures taken out by the Respondent during the interregnum period of dismissal of SA for default and restoration of SA remained un-challenged.

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As regards the contention of the Applicants that the Respondent is not a pany incorporated under the provisions of the SARFAESI

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$lilE"g$Eql$lR^{not fall underthe definitionof linancialinstitutionand} :':H:::Y:::::':::::::':i:""-i::.:l':-1.:1".:-r^:: jqconcerned, th-e ial Statements, RBI Notification and Certificate '"1#J"m",^il 'l ti #J"&m." $# * the Respondent along with its counter clearly .],rtestablistr^{t!6t$flnespondent Financial Institution} is entitle to invoke S;slEV

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SA.No.172/2023

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the measures under the SARFAESI Act to recover the debt from the borrowers. So, I do not find any merits in the contention of the Applicants that the Respondent is not entitled to proceed under the SARFAESI Act.

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t2. So, for the reasons stated supra, I am ofthe considered opinion that the Respondent has duly followed the procedure laid down under the SARFAESI Act and the Rules made thereunder while proceeding against the schedule property and the Applicants have failed to establish any valid grounds for setting aside the measures taken out by the Respondent. The present SA is devoid of merits and same is liable to be dismissed. Accordingly, this point is answered against the Applicants and in favour ofthe Respondent.

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Potnt No.ltllr

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

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Communicate a copy of this order to the parties concerned.

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(Ddated. to tl@ Priwte Seqetdry, transoibed by f@r, @tede4 signed and pronoutced bA fie in tlle open court oft this tha 1Sn d.aA ofApril, 2026).

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sd/(G. GOPTCHANDI PRESIDII{G OFT'ICER

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T RUE GOPY
CI e4"4t
Attt-fio€l(tarf
Di:.!, HYAERAEAO'

Juhi Mariam Jacob and others v. Auxilo Finanace Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Juhi Mariam Jacob and others v. Auxilo Finanace Pvt. Ltd.

Case brief

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