Dismissed

Hn Satheesh v. Poonawalla Fincorp Limited

DRT15 Jul 2026SA/301/2024

Case brief

AI extract

What is this about?

The tribunal dismissed the applicants' Securitization Application challenging recovery measures under the SARFAESI Act. The court found sufficient proof of compliance regarding service of notices, affixture on assets, and publication in newspapers, holding the respondent's actions legal and not arbitrary.

What did the court decide?

The Securitisation Application was dismissed; the stay granted in the IA stands vacated.

Hn Satheesh versus Poonawalla Fincorp Limited — Banking and Recovery | DRT (2026)

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(

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD

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DATED THIS THE 15TH DAY OF JULY, 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. 301 OF 2024

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H N Satheesh, S/o. Narayana Rao Hullur Aged about 48^years, Occ Business, R/o. 16-139, High School Street, Punganur Town & Mandal, Chittoor District- 517247

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Also at SY No. 152-1, Door No.16-139, Block No.16, High School Street, Punganur Town & lYandal, Chittoor District- 517247

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K Anupama, D/o. Krishnamurthy Nanda Hosahall, Aged about 42 years, Occ House Wife, R/o. 16-139, High School Street, Punganur Town & Mandal, Chittoor District- 517247

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...........Applicants

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Versus

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Poonawalla Fincorp Limited (Formerly Known as Magma Fincorp Limited) Regd Office at No. 201 & 202,2nd Floor, AP 81, Koregaon Park Annex, Mundhwa, Pune-41 1036, Ghorpadi Mundhwa Road, Maharashtra

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Rep by its Authorized Signatory

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.....Respondent

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Counsel for the Applicants : Mr. K. Kranthi Kumar Counsel for Respondent : Mr. D. S. Pavan Kumar

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-:ORDER:-

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The^present Securitization Application is filed by the^Applicants u/s.77 of the Securitisation and Reconstruction of^{FinancialAssets} and Enforcement of Security Interest Act, 2002^{("Act" hereinafterfor} ff6,'tt

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page 2 of5

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SA No. 301/2024

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short) to set aside all the measures initiated by the respondent company under section 13(2), 13(4) and 14 of the Act, including the action of taking physical possession of the SA Schedule Properties via vacation notice dated 09.07.2024 in pursuance to the order in Crl.M.P.No.123 ot 2024 by Chief ludicial Magistrate Chittor.

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The averments of the application, briefly, are that applicants being the borrower and co-borrower, availed a home loan from the Respondent Company in the year 2016 by mortgaging the schedule properties as security and contend that, though they executed the necessary loan documents, the Respondent Company obtained their signatures on several blank printed documents. They further assert that they were regular in repayment of the EMIS and that the Respondent Company, in violation of the RBI guidelines, levied excessive interest and other charges before classifying the loan account as a NPA. The Applicants further allege that the Respondent Company initiated measures under the SARFAESI Act, 2002 without complying with the mandatory provisions of Sections 13(2), 13(3A), 13(4) and 14 of the Act read with Rules 8(1) and 8(2) of the Security Interest (Enforcement) Rules, 2002, (hereinafter "Rules" for short) inasmuch as neither the demand notice under Section 13(2) nor the possession notice under Section 13(4) was served upon them and the possession notice was neither affixed on the secured asset nor published in two leading newspapers as prescribed under the Rules. It ls further alleged that the Respondent Company suppressed material facts and obtained orders under Section 14 of the Act in Crl.lY.P.No.123 of 2024 fot taking physical possession of the secured asset through an Advocate Commissioner. The Applicants assert that they became aware of the proceedings only upon receipt of the Advocate Commissioner's notice dated 09.O7.2024, when a copy of the possession notice dated 12.02.2024 was furnished to them, and further contend that the Advocate Commissioner initlally mentioned

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Page 3 of5

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SA No. 301/2024

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an incorrect case number, namely Crl.M.P.No.37 of^{2022, whichwas} subsequently corrected by notice dated 17.07.2024,^thereby indicating^procedural irregularity. On these^{averments,the Applicants} have filed the^present SA, seeking to declare the^{measures initiated} by the Respondent Company as illegal, arbltrary^{and liable} to^{be set} aside.

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The Respondent Company filed reply statement^alongwith documents. The averments thereof, briefly, are that it^{is admitted} that Applicants had availed a housing^loan of^Rs. 21,30,000^{in the} year 2016 by mortqaging the schedule properties as security and had executed all necessary loan and security documents after^accepting the terms and conditions. It^is averred that^{the Applicants committed} persistent defaults in repayment of the EMIs, resulting in the loan account being classified as a NPA on 05.08.2023. The^Respondent further asserts that a demand notice dated 31.10.2023^underSection 13(2) of the Act, 2002 was issued and duly^{served uponthe} Applicants and, upon their failure to discharge the^{outstanding dues,} a^possession notice dated 12.02.2024 under^{Section13(4) of the Act} read with Rule 8(1) of the^Rules, 2002^{was issued, affixed on the} secured asset, and^published in two^{newspaperson 16.02.2024in} compliance with Rule 8(2) of the^Rules. It^{is further contended that,} as the Appllcants failed to regularise^{the loan account,the} Respondent initiated^proceedings under Section¹⁴ of^{the SARFAESI} Act before the Chief ludicial Maglstrate,^{Chittoor, for takingphysical} possession of the secured asset. Accordingly, the Respondent^prays for dismissal of the SA with costs.

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4, Right of Applicants to advance arguments^{was forfeited on} 23.06,2026 after affording ample opportunity.^{Heardlearnedcounsel} Utffo*

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Page 4 of 5

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sA No. 301/2024

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for the Respondent. Perused the written arguments filed by the Respondent and also perused the material brought on record.

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Learned counsel for the Respondent Company reiterated the contents of its reply statement, denied the allegation of the Applicants and placed reliance upon the material papers annexed to the reply statement. It is submitted that the Applicants,account was classified as NPA in accordance with RBI guidelines and that the Respondent Company had strictly followed the due procedure prescribed under the SARFAESI Act, 2002 and the Rules framed thereunder. Accordingly, sought for dismissal of the S.A.

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The points for consideration are as follows : -

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i) Whether the Applicants made out any valid ground to quash any of the measures initiated by the respondent against the SA schedule properties as prayed for?

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ii) To what relief?

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Point No.(i):

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Admittedly, applicants availed the housing loan by creating mortgage over the SA schedule properties and failed to discharge the outstanding liability in accordance with the terms of the loan. In view of the admitted default, the action of the Respondent Company in classifying the loan account as a NpA and initiating measures under the provisions of the SARFAESI Act,2OO2 cannot be said to be illegal, arbitrary or irregular, as contended by the Applicants.

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B. The Respondent Company filed material documents along with reply statement as proof of compliance of due procedure of law. Pages 5 to 16 of the material paper filed separe,r"rr*ffiI

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Page 5 of 5

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SA No.301/2024

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copies of postal track report proving service of demand notice. Similarly, Pages 17 to 22 are the Photostat copies of postal receipt of Possession Notice dated L2.02.2024, photographs as proof of affixture on secured assets and publication of the same in English and Telugu (vernacular language) newspapers on 16.02.2024. In view of sufFicient proof place on record, I find no infraction of section 13(2) & 13(4) of the Act and Rules 3, B(1) & B(2) of the Rutes, 2002. As a secured creditor the Respondent Company initiated the SARFESI proceedings, which cannot be categorized as illegal or arbitrary.

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In view of the above observations, it is evident that the Applicants have failed to establish any valid ground to interdict the measures initiated by the Respondent Company under the provisions of the Act against the SA schedule properties. Accordingly, the SA is liable to be dismissed.

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Point No.(ii):

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In the result, the Securitisation Application fails and is hereby dismissed. 11. Consequently, stay granted vide order dated 16.O7.2O24 in IA.No.205B of 2024 in the SA stands vacated and Interlocutory Applications pending, if any, shall stand closed.

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t2. No order as to costs.

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Communicate a copy of this order to the parties concerned and upload in the official website.

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(Typed thelsth to dayofruty,2o26). my dictotion by the Steno., corrected, signed ond pronounced by me irylhg.ppen court on this

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fiQgi.ror\l ( 6n*ftilorrrr PRESIDING OFFICER

Hn Satheesh v. Poonawalla Fincorp Limited

Case brief

What is this about?

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Hn Satheesh v. Poonawalla Fincorp Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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