Dismissed

Shaik Abdul Mahboob Basha v. LIC Housing Finance Ltd. and Others

DRT12 Aug 2026SA/210/2023

Case brief

AI extract

What is this about?

Deletion of judgment text here due to illegible artifacts (e.g., 'Disnissey;l#3,f,llll1y', 'OStrOt', 't-'/'). The intelligible portions indicate an application under Section 17 SARFAESI Act to set aside possession measures was dismissed because the applicant's claims were subsequent to the mortgage.

What did the court decide?

Securitisation Application dismissed; Interlocutory Applications pending closed; Stay vide earlier order vacated.

Shaik Abdul Mahboob Basha versus LIC Housing Finance Ltd. and… — Banking and Recovery | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL^_ II AT HYDERABAD

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DATED THIS THE 12TH DAY OF AUGUST, 2026

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

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Securitization Application No. 210 OF 2023

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Shaik Abdul Mahboob Basha, S/o S.A. Azeez, Aged about 50 years, Occ: Govt. Employee, R/o.Flat-302, 2nd floor, Vijaya Residency, 42-777/t/r/302, Andal Nagar, Moula Ali, Hyderabad

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...........Applicant

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Versus

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LIC Housing Ltd., 201, 2nd Floor, Krishe Sapphire, Near IMAGE Hospital, Hitech City Main Road, Hyderabad-081,

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Rep. by its Authorized Officer.

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Benjamin Lally, W/o. M. N. Raj Kumar Aged about 57 years, Occ; Employee, R/o.Durai Pellai Illam, Pillayarkoil Street, Arumbakkam, Chennai-600 106

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Vivek Kumar Agarwal, S/o. R. S. Agarwal, Aged about 50 years, Occ; Business, R/o.H.No. 17-5412, Ramnagar Colony, Alwal, Secunderabad-500 010 ..... Respondents

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Counsel for the Applicant : M/s. T. Sridhar Reddy Counsel for Respondent No.l : M/s. Hari Prasad^podila Counsel for Respondent No.2 & 3. Disnissey;l#3,f,llll1y.

Page 2 of 6

SA No. 210/2023

-:ORDER:-

The^present Securitization^{Applicationis filed by the Applicant} u/s.L7 of the Securitisation^{and Reconstructionof FinancialAssets} and Enforcement of^{SecurityInterest Act, 2002 ("Act" hereinafterfor} short) to set aside all^{the measures initiated by the respondent,} including the action of taking^{physical possession of the SA schedule} property via warrant dated^{19.04.2023 as per orders in} Crl.M.P.No.24Sof2022onthefileofHon'bleChiefMetropolitan Magistrate, Malkajgiri^{in pursuanceof the possessionnotice dated} 28.09.2022 under^{section 13(4) of the Act.}

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2, The averments of^{the application, in brief, are that applicant} purchased the Schedule Property^{from RespondentNo'2under an} Agreement of Sale dated^{07.07.2007 for aconsiderationof} Rs.4,00,000/-,^{paid Rs.3,00,000/- towards advance and the balance} Rs.1,00,000/- on 05.08.2007,^{on which date vacantpossessionwas} allegedly delivered^{to him, He asserts that, though the Agreement} disclosed the existing^{mortgagein favour of RespondentNo'1,} Respondent No.2 had^{undertaken to clear the same' The Applicant} states that he remained^{in possessionof the property and cameto} know of the subsequent^{proceedingsonly on 06'06'2019, when a} court bailiff visited^{the property pursuant to a decree obtainedby} Respondent No.3 in^{O.S. No.121 of 2010 on the basis of a} subsequent Agreement^{of sale dated 03.07.2009.He accordingly filed} a Claim Petition in^{E.A. No.53of 2019 in E'P. No.51of 2018, which is} stated to be^{pending.The Applicantfurthercontendsthat on} 20.04.2023 an^{Advocate Commissionerattempted to take physical} possession pursuant to the^{PossessionNotice dated28.09.2022} issued by Respondent^{No.1 under Section 13(4)of the SARFAESIAct} and the Extension^{Warrant dated 19.04'2023 issuedin} crr.M.p.No.24' of^{2022. He areses that the u"^w;rur"t"}

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Page 3 of 6

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SA No. 21012023

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the person in actual possession and did not serve the SARFAESI notices upon him, nor were the earlier^possession Notice dated 23.02.2022 duly affixed or published as required under the Security Interest (Enforcement) Rules, 2002 (hereinafter "Rules" for short). It is further contended that the attempt to dispossess him during the pendency of his Claim Petition, without following due process and in violation of principles of natural justice, is illegal and arbitrary. Accordingly, the applicant prays for setting aside the SARFAESI measures initiated against the SA schedule property.

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The Respondent Bank filed its reply statement along with supporting documents. The averments thereof, in brief, are that Respondent No.2 had originally mortgaged the Schedule property with LIC of India in 1999 and, upon takeover of the loan by Respondent No.1 in 2006, executed the necessary loan documents and Memorandum of Deposit of Title Deeds in favour of Respondent No.1, thereby creating a valid security interest. The Bank states that the loan account was classified as NPA on 07.08.2019 due to persistent default, followed by issuance of the Demand Notice dated 29.04.2022 and Possession Notice dated 28.09.2022, and thereafter proceedings under Section 14 of the SARFAESI Act in Crl.M.p.No.24B of 2022, pursuant to which an order dated 19.04.2023 was obtained from the learned Chief Metropolitan Magistrate, Malkajgiri, The Respondent further contends that the Applicant, being a third party to the loan transaction, claims interest in the Schedule Property only on the basis of an unregistered Agreement of Sale dated 07.07.2007 and an unregistered payment receipt dated 05.08.2007, while Respondent No.3 also claims an interest on the basis of a subsequent Agreement of Sale. It is contended that both alleged transactions .were subsequent to creation of the mortgage in favour of LIC of India anci, therefore, cannot affect or defeat the riqhts of the secured creditor.

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Page 4 of 6

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sA No.210/2023

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The Bank denies any^{collusion or unlawfulintention to dispossess the} Applicant and asserts^{that all measures underthe SARFAESIAct were} undertaken in^{accordance with law. Accordingly,the Respondent} Bank^prays for dismissal^{of the SA.}

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Despite being afforded^{sufficient opportunities, the Applicant} failed to take necessary^{steps to bring Respondent Nos'2 and 3 on} record. Accordingly, the S.A.^{stooddismissed againstRespondent} Nos.2 and 3, as^per the^{docket order dated 27.01.2026.}

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Learned counsel for the applicant reported that^{orders may be} Heard learned counsel for^{the respondent} passed based on record. No.1. Perused the^material brought on record.

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Learned counsel for^{the Respondent Bank deniedthe averments} of the Applicant and^{placesreliance upon the material papers} annexed with the^{reply statement. It is submitted that the Applicant} account was classified^{as NPAin accordancewith RBI guidelines and} that the Respondent^{Bank had strictly followedthe due procedure} prescribed under the SARFAESI^{Act, 2002 and the Rules framed} thereunder. Accordingly,^{soughtfor dismissalof the S'A'}

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The^points for consideration^{are as follows : -}

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i) Whether the^{Applicantmade out any valid ground for} quashing the action of the Respondent^{Bank for takingthe} physicai possession of the SA^{schedule propertythrough-} Advocate Commissioner^{appointedunder the provision of} the section 74 of^{the SARFEST Act?OStrOt}

ii) To what relief?

t-'/

Page 5 of 6

SA No. 21012023

Point No.(i):

From the material on record, it is evident that the Schedule Property was mortgaged in favour of LIC of India in the year 1999 and the said loan was subsequently taken over by Respondent No.1 in the year 2006, whereas the Applicant claims interest under the Agreement of Sale dated 07.07.2007. Thus, the Applicant's alleged transaction is subsequent to the creation of the mortgage in favour of the secured creditor and, therefore, cannot defeat the prior security interest. The Applicant is admittedly a third party to the loan transaction and claims an interest in the SA schedule property under the Agreement of Sale dated 07.07.2007, whereas the mortgage in favour of the secured creditor was created much prior thereto. Therefore, the Applicant, being a subsequent third-party claimant, cannot chaltenge or seek to defeat the pre-existing security interest of the Respondent Bank on the strength of such subsequent transaction, The Applicant has also failed to establish any illegality or material irregularity in the SARFAESI measures warranting interference under Section L7 of the Act. The pendency of E.A.No.53 of 2019 in E.P.No.51 of 2018 also does not, by itself, invalidate the subsisting mortgage or the measures taken by the secured creditor under the SARFAESI Act. The Respondent Bank, after classification of the account as NPA, issued the demand and possession notices and thereafter obtained orders under Section 14 of the Act in Crl.M.P.No.248 of 2022 for taking physical possession. The Applicant has failed to establish any material illegality or procedural irregularity in the said measures warranting interftrUence by (his Tribunal under ' : section 17 of the Act. AWr#

.' I.^..

Page 5 of 5

SA No.2LO|2O23

Point No.(ii):

g. In the result, the Securitisation^{Applicationfails and is hereby} dismissed.

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Consequently, stay^{grantedvide order dated 12.05.2023 in} IA.No.12B6 of 2023 in the^{sA stands vacated and Interlocutory} Applications^pending, if^{any, shatl stand closed.}

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No order as to costs.

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t2. Communicate a^{copy of this order to the partiesconcernedand} upload in the official^website.

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(Typed to my dictation by the steno,^{corrected,signedond pronouncedbyme in the opencourt on this} the 72'h doy of August,^2026).

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(RAMESHWAR KOTHE) PRESIDING OFFICER

Shaik Abdul Mahboob Basha v. LIC Housing Finance Ltd. and Others

Case brief

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What did the court decide?

Shaik Abdul Mahboob Basha v. LIC Housing Finance Ltd. and Others

Case brief

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What the court decided

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