Dismissed

Mr N Lakshmi Raman Mohan and Another v. Hinduja Housing Finance Limited

DRT14 May 2026SA/370/2025

Case brief

AI extract

What is this about?

A Receivables Transfer Tribunal dismissed an application to quash recovery measures under the SARFAESI Act. The court held that the applicant failed to prove regularization of payments and accepted the secured creditor's entitlement to physical possession of the schedule property under Section 14.

What did the court decide?

The Securitization Application was dismissed; measures initiated by the Respondent under the SARFAESI Act were not quashed.

Mr N Lakshmi Raman Mohan and Another versus… — Contract and Commercial Disputes | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD

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DATED THIS THE 14TH DAY OF MAY, 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. 370 OF 2025

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Mr. N. Lakshmi Raman Mohan

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S/o. Mr. N. Hara Narayana Rao, Aged about: 44 Years, Occupation: Business

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Mrs. Kancharla Tajasree W/o. Mr. N. Lakshmi Raman Mohan Aged about 40 years, Occupation: House Wife Resident of Plot No. 562, Vasnthanagar Colony, Near Commercial Complex, Kukatpally, Hyderabad- 500072

.......Applicants

Versus

The Branch Manager

M/s. Hinduja Housing Finance Limited Having its branch office at: 7-l-621/28, Near Union Bank, Opp: SBI & IDFC Bank ATM, S R Nagar, Hyderabad- 500038

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Also at

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No.27A, Developed Industrial Area, Guindy, Chennai- 600032

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....Respondent

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Counsel for the Applicants : Ms. H. Shyamala Counsel for Respondent Company: Mr. T. Ranadhir Singh

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-:@_B:-

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The present Securitization Application is filed by the Applicants u/s.17 of the Securitisation and Reconstruction of Financial^{Assets and} Enforcement of Security Interest Act, 2002 ("Act" hereinafter for short) to set aside all measures initiated by the Respondent^Company, including the action of taking the^{physical possession of the SA schedule} property through Advocate Commissioner notice dated 31'07.2025ⁱⁿ Owr*

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PaBe 2 of 5

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sA No. 370/202s

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Crl.M.P.No.136 of 2025 in^{the file of learned II AdditionalChiefJudicial} Magistrate, Medchal-^{Malkajgiri Districtat Kushaiguda as null and void.}

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The fact of the case as averred by^{the applicantin the SA, in brief,} are that the Applicant is^{engaged in used car businesswho availed} secured loan against schedule^{property. He had been regularlyservicing} the loan through EMIS except for a^{temporary default of four} instalments, which were subsequently^{regularisedand fully clearedby} 31 lvlarch 2025. Despite such compliance^{Respondent Companyimposed} undisclosed penalties and charges without^{prior intimationor} transparency and thereafter^proceeded to^{initiate coercive recovery} measures. Respondent Company without^{issuing proper demand notices} or furnlshing any authenticated statement of the^{allegedoutstanding} dues, approached the II Additional^{ChiefJudicial Magistrate, lvlalkajgiri,} and obtained ex-parte orders by^placing misleading facts^beforethe Judicial Magistrate, thereby violating the^principles of natural^justice. The mandatory procedural requirements under the SARFAESI Act and Rules-particularly Sections 13(8), 42(3-A) and 17(5) of the Act, read with Rules 8(6), 8(7) and 9(1) of the Security Interest^{(Enforcement)} Rules, 2002 (hereinafter "Rules" for short)-have not been complied with by the Respondent Company. Specific lapses include failure to issue the prescribed 30-day statutory notices prior to auction, nonpublication of the possession and sale notices in the requisite newspapers, and defective or non-service of notices as per the statutory mandate. In support of the submission that non-compliance with statutory notice and timeline requirements vitiates the entire recovery and auction process, the Applicant relies upon the judgment of the Supreme Couft in Mathew Varghese v. M. Amritha Kumar l(2014) S SCC 6101. The Appllcant further alleges mala fide conduct on the part of the Respondent Company, including deliberate undervaluation of the secured asset (valued at more than Rs.2 crores) El recovery. of a /A*,<.',g!\ / -../| /\ -,\t'\

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Page 3 of 5

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5A No.37012025

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comparatively lesser alleged outstanding (below Rs.61 lakhs), nonresponse to written representations and Right to Information applications, and failure to reconcile the account or furnish a transparent statement of dues. The Applicant also contends that the possession notice dated 31 July 2025 is illegal, as it was neither properly served upon him nor duly published in the newspapers and is further alleged to be defective and unauthenticated on the face of record. The action of requiring the Applicant and his family to vacate the residential property within only 15 days, without adherence to due process or prior notice, is assailed as arbitrary and in violation of the SARFAESI provisions and prior judicial orders. Hence, the Applicant prays that the present Securitization Application be allowed and that the action to take physical possession of SA Schedule^property be set aside.

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The sum and substance of the reply statement and additional reply of the Respondent Company, in brief, is that the Applicant, along with his wife, approached the Respondent Company on 02.03.2020 for a housing loan, which was sanctioned for an amount of Rs.62,58,000/-. The borrowers executed all requisite loan and security documents and created an equitable mortgage by deposit of the original title deeds in favour of the Bank. However, after availing the loan, the Applicants defaulted in repayment, in consequence whereof the loan account was classified as a NPA on 30.06.2023 in accordance with the Reserve Bank of India guidelines. Subsequently, the Bank initiated recovery proceedings under Section 13(2) of the Act by issuing a demand notice dated 11.09.2023 for Rs.64,07,155/-. As the notice sent through registered post was returned unserved, the Bank effected substituted service by publishing the notice in Financial Express (English) and Nava Telangana (Telugu) on 07.11.2023. In view of the Applicants'failure to discharge their liability within the statutory^period of^{60 days,} the^Bank proceeded under Section 13(a) and issued a^possession notice dated - 22.0t.2024, taking svmboric^possession of the *ffi\i:.w

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Page 4 of 5

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sA No' 370/202s

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compliance with^{Rule B(1) of the Rules,2002. The possession notice} was duly affixed on^{the propertyand publishedin the aforementioned} newspapers on 25.01.2024.^{As the Applicantscontinued to remain} non-compliant, the^{Bank approachedthe jurisdictionalMagistrateunder} Section 14 of the^{SARFAESIAct by filing Crl. M.P. No' 136 of 2025} seeking assistance for^{takingphysicalpossession.The Magistrate} allowed the application^{and appointed an Advocatecommissioner, who} issued a vacate^{notice to the Applicants.The Bank submitsthat the} Applicants were duly served^{and that all statutory procedures under the} SARFAESI Act and^{Rules have been strictly adheredto without any} deviation or illegalitY.

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Both Learned Counsel for the^{Applicantas well as Respondent} Company reported that^{order may be passed based on records. Perused} the material brought on^record.

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

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i) Whether the applicant made out any^{validground to quash} any of the measures initiated by the^{respondent againstthe} SA schedule^propefty as PraYed^for?

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ii) To what relief?

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Point No.(i):

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Admittedly the applicants availed loan against mortgage of SA schedule property and committed default i[^payment. No^proof of regularizing the account is^placed on record. Hence the contention of regularity in payment cannot be accepted. The Respondent Company being secured creditor is entitled to initiate SARFAESI action as a consequence of account becoming NPA.

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No occasion arises to examine contentions on non-compliance of Secs.13(B) and Rules 8(6), B(7), 9(1) of 2002 as no documentary proof

OY**

Page 5 of 5

SA No.370/2025

is placed showing that the Respondent company initiated action for sale of the subject property.

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The Respondent Bank placed on record proof of sending, publishing of demand notice and possession notice and also affixture of possession notice. However these documents remained unrebutted. As a secured creditor, the Respondent company is entitled to take physical possession of the secured asset under sec. 14 of the SARFAESI Act which cannot be categorized as illegal or arbitrary.

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In the view of above observations, I hold that the applicants utterly failed to make out valid ground to set aside the measures initiated by the Respondent Company under the SARFESI Act against the application Schedule property.

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Point No.(ii):

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In the result, the securitisation application fails and is hereby dismissed.

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Consequently, Interlocutory Applications pending, if any, shall stand closed. No order as to costs. Communicate a copy of this order to the parties concerned and upload in the official website.

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(fyped to my dictotion by the PS, corrected, signed ond pronounced by me in the open court on this the u'h doy of uoy, 2026).

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ESHWAR KOTHE) PRESIDING OFFICER

Mr N Lakshmi Raman Mohan and Another v. Hinduja Housing Finance Limited

Case brief

What is this about?

What did the court decide?

Mr N Lakshmi Raman Mohan and Another v. Hinduja Housing Finance 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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