Dismissed

S Nadeem Shuleb v. Union Bank of India

DRT5 Jan 2026SA/248/2025

Case brief

AI extract

What is this about?

In an application under Section 17 of SARRAFISA 2002, a Debts Recovery Tribunal declined to set aside measures for taking possession of mortgaged property. The tribunal held the applicant failed to substantiate claims of illegal interest or non-compliance with RBI guidelines and found the bank had duly followed statutory procedures.

What did the court decide?

The Securitization Application is dismissed; interim applications, if any, stand closed.

S Nadeem Shuleb versus Union Bank of India — Securities and Capital Markets | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL^_ II^{AT HYDERABAD} DATED THIS THE OsTH DAY OF JANUARY,²⁰²⁶

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

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Securitization Application No.248 oF 2025

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S. Nadeem Shu leb S/o Sri Aslam Basha Aged 30 years, Occ: Business D. No.16- 11-25, Tippukhan Street Hindupur Town, Sri Satya Sai District

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.......Applicant.

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Versus

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The Authorized Officer Union Bank of India Hindupur Branch, Sri Satya Sai District

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....Respondent.

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Counsel for the Applicants : Mr. T. Nagender

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Counsel for Respondent : Ms. Sangeeta laiswal

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-: CL-B.gEB:-

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The Applicant filed the present Securitisation Application u/s 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the Act") to set aside all the measures of the respondent bank against the SA schedule property under Secs.13(2) and 13(4) of the Act, 2002, including taking physical possession pursuant to advocate commissioner notice in Crl.MP No.50 of 2025.

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The case of the applicant, in brief, is that he availed housing loan of Rs.37 lakhs in 2023 against mortgage of application schedule property. The advocate commissioner served notice only on 2L.05.2025 and no notice was issued prior to that. Possession notice was issued when advocate commigtloner and respondent bank ,/,,/ I^\rnn _.( ///'.^*

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Page 2 of 6

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5A No.248/2025

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officials came to the^{property. As per possesslon noticedated} 10.02.2025, the^{claim is exorbitant due to chargeof heavy interest} aqainst the RBI^{guidelines. Though applicant remitted amounts, due} to continuous business^{losses he couldnot pay the due amountsThe} applicant is^{reslding in the property with dependentfamilymembers} and in the event of^{dispossession, grave injustice would be done'} Without considering the^{situation, payments made by the applicant} into the loan account and^{without serving notices properly,the} respondent bank^{is contemplatingto takephysical possession illegally} hence thls SA.

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The respondent^{bank filed replystatementalongwith} documents. The applicant^{failed to make payments in the loan} account as^{per agreedterms of sanctionand accordinglyaccount} became NPA on 05.10.2024^{as per RBI guidelines and thereafter} Securitization^{proceedings have been initiatedby issuing demand} notice dated^{08.70.2024 for Rs.37,56,530,22ps as on 05 10 2024} which was^{received by the applicant vide postaltracking reportAs no} payment was made,^{possessionnotice dated10 02 2025 was sentby} registered^post to^{the applicant,publishedin'sakshi'and'HansIndia'} newspapers on^{74.O2.2025 and got afflxed on the mortgaged} property on 10.O2.2025.^{Thereafter,a redemption noticewas also} issued on^{f5.O3.2025, sent to the applicant by registered post with} acknowledgment^{due.The respondentbank filed Sec 14 application} before learned^{Chief Judicial Maglstrate Cum Principal Assistant} Sessions Judge,^{Ananthapur,whichwas numbered as CrI MP No'50 of} 2025 and an^{advocate commissioner cameto be appointedtherein'} who in turn^{issued vacate notice.The interest has been chargedas} per terms and conditions^{of the sanctionas agreedby the applicant'} u' The respondent^{bank has strictly followed} ffiy""Pto."dut" 1//' -1.'^te

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Page 3 of6

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5A N0.24812025

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prescribed under the Act and Rules thereunder.^{Hencethe SA is liable} to be dismissed.

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Learned counsel for applicant^reported on^{05.12.2025that no} oral arguments but filed written^{arguments. Heard learnedcounsel} for the respondent bank.^{Perusedthe written argumentsof the} applicant along with the^{material brought on record'}

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Vlde his written arguments,^{learnedcounsel for applicant} reiterated the version as^{in the application.He would further contend} that Hon'ble Apex court^{in united Bank of lndia vs. satyawati Tondon} (2010) S Scc 110, underscored that the Tribunal is a forum^for protection against illegal or oppressive use of power by the banks while enforclng the securities. The applicant^{made periodicpayments} despite financial distress on account of^{businesslosses. Without} considering the same, bank issued demand notice with^inflated outstanding amount by charging excess interest.^The demand^notice and^possession notice are ex facie vitiated for non-service.^The advocate commissioner's notice is undated antedated and served subsequent to actual date of physical possession. Learned counsel relied on^judgement of Hon'ble Apex Court in Mardia Chemicals vs. Union of India (2004) 4 SCC 311 wherein it was emphasized strict compliance with notice requirements to safeguard borrower's rights. The applicant is entitled to challenge possession notice as per judgement of Hon'ble Madras High Court in Sofiya Implex Pvt. Ltd. vs. SBI (2015) i CTC 5. It is further contended that the respondent bank failed to disclose the interest rate etc., Hon'ble Allahabad High Couft in Bank of Baroda vs. Liga Furniture Trading (2010) 9CC OnLine All 746 held that RBI guidelines are binding on enforcement proceedings and breaches thereof are grounds to set aside coercive actions. The applicant cannot be deprived of the fundamental right to /ye

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5A No.248/2025

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property guaranteed under Article 300A,^{learned counsel reliedon} judgement of Hon'ble Supreme Court in K.7. Plantation^{Pvt' Ltd} '^vs' state of Karnataka^{(2011)9 scc 1. If the applicantis forcedto} vacate, he will be left^{homelesshowever, alternative measure such as} regularization of account and^{balance of conveniencelies with the} applicant. In thls context,^{learned relled on judgementof Hon'ble} Apex Court in Chintaman^{Rao vs. Stateof Madhya Pradesh (1955)} iCR 123. Accordingly^{learned counselwould pray to set asideall the} measures against^{the application scheduleproperty.}

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During the course of arguments,^{learned counsel for the} respondent reiterated the^{version as in the reply statementAt the} very outset she contended^{that the applicant was aware of his family} position as on the date of availing^{the loan and he has to abideby the} terms and conditions^{of the sanction, as agreedby him'Due to failure} to comply the same,^{the account becameNPA and Securitization} proceedings had to be initiated.^{The dues under demandis public} money and the^{respondent bank being securedcreditor,is under} bounden duty to^{recoverthe same through legal remediesavailable} to it. Learned^{counselrefutedthe contention of charging exorbltant} interest and said^{interest waschargedas per terms of sanction in} strict compliance^{of RBI guidelines. Whilerelyingon the documents} annexed to the^{reply statement as proof of strict complianceof the} procedure as^prescribed in^{the Act and the Rules of 2002, learned} counsel sought^{for dismissal of the SA'}

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

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i) Whether^{the applicantmade out any valid groynd} lo ' iuash any of the measures of the respondent against the iA schedute ProPe,tY,^ut P,uY"d^{to'?@Zrx,r</sup>}

ii) To what reliee

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sA No.248l202s

Point No,(i):

Admittedly the applicants availed housing loan from the respondent bank against mortgage of the application schedule property and committed default in repayment on account of business loss. Pertinently, the loan availed is housing loan and non-payment of EMIS cannot be attributed to business losses. Having agreed to terms and conditions of sanction, the applicant failed to adhere to the same. Hence classifying the accounts as NpA and initiating Securitization measures cannot be treated as illegal.

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The application schedule property is the secured asset and the respondent bank being the secured creditor is bound to follow RBI guidelines to declare the account as NpA consequent upon failure in repayment beyond the time period stipulated by the RBi and initiate action for recovery. Except averring charging of excess rate of interest, non-compliance oF RBI guidelines, deprivation of right to property etc., the applicant has not substantiated the same by placing on record the specific RBI Circular the respondent bank failed to follow, correspondence if any, with regard to rate of interest or any other grievance. It proves that the applicant totally failed to conduct the account diligently. Hence his contentions are not acceptable and the^judgements relied on by him are not of help to the applicant in the circumstances of the case.

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On the other hand, the respondent bank placed on record sufficient proof as to service of demand notice, possession notice and affixture and publication of possession notice. As per Sec.14 of the Act,2002 the respondent being secured creditor is entiued to take action for taking physical possession of the secured asset. I find no deviation in the procedure foltowed by the respondeqffut:, , /./ <-as\\a

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sA No'248/2025

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In view^of the above^{observations, it is concluded that the} make out any^{valid groundto set aside any of the} applicant^{failed to} measures of^the respondent^{includingthe action to takephysical} SA schedule^{property. Accordingly SA is liable to be} possession of the dismissed.

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Point No,(ii):

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the Securitization^{Applicationfails and is hereby} t2. In the^result, dismissed. the Interlocutory^{Applicationspending' if any'} 13. ConsequentlY, shall stand^closed'

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L4.^{No orderas to costs'}

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15.^{Communicate a copy of this orderto the partiesconcernedand} upload^{in the official website'}

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(Typed to my^{dictation by the-Ps' corrected'signed ond pronounced by me in the opencourt on this} 'tie os'h doY^{of \onuory,2026)'}

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Hf,t'r'r"c (RAMEsHwAR-[oiHl PRESIDING^OFFICER

S Nadeem Shuleb v. Union Bank of India

Case brief

What is this about?

What did the court decide?

S Nadeem Shuleb v. Union Bank of India

Case brief

What is this about?

What did the court decide?

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