Debts Recovery Tribunal dismissed the applicant's application challenging the possession notice under the SARFAESI Act. The court held the secured creditor followed statutory procedure and noted death by natural death was not covered by insurance policies cited.
No order as to costs. Application dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE DEBTS RECOVERYTRIBUNAL - 1 AT HYDERABAD
DATEDTHISTHE 3oTH DAYoF JUNE. 2026
PRESENT: SRI GUMMADI GOPICHAND, PRESIDING OFFICER
SA.No.373/2024
Smt.Dhanavth Priya Nayak, W/o Late Dhanavath Bala Kishan Nayak, Aged 37 years, Occ:house wife, R/o H.No.5-5, Shankarampet Mandal, Khajapur, Medak District-502248.
... Applicant
Versus
3.HDFC Life Insurance Company Ltd., Office at 136 floor, Lodha Excelus, Apollo Mills Compound, ttttvt,JqS-hi M Mahalaxmi, Mumbai-4OQ0if--,. '.- ... Respondents '., (,:'8r..... *.t'. - i .,.'A. Bhaskar Rao Counsel for the Applicciit';.$:i.:j' Chitturi Counsel'for tne ii np$n6srui.':+ Counsel for 2"4 Counsel for no.3 0 ,:;ii liiiz0 Gang adhar Rao Deshpande Reserued on Pronounced on Uploaded to the
ORDER
The Applicant is the co-borrower and mortgagor to the housing loan of Rs.32 lakhs availed by her husband late Dhanavath Bala KishanNayak from the lst Respondent in the year 2023. The Applicant is the absolute owner and possessor and the SA schedule property and mortgaged the same in favour of the 1st Respondent in security to the loan availed by her husband. On the advice of the 1.t Respondent officials, the borrower availed insurance policies for the said loan from Respondents No.2&3 herein to secure the said housing loan and the policy period commenced from 10.11.2023 to 09.11.2026. After vialing the said loan, the borrower i.e. Dhanavath Bala Kishan Nayak suddenly died on 17.11.2023 due to heart attack and after the demise of the borrower, the Applicant suffered severe hnancial crisis. Thereafter, instead of closing the loan account by adjusting the insurance amount, the lst Respondent demanded the Applicant to pay the outstanding loan amount and subsequently classihed the loan account as NPA. The Applicant requested the Respondents No.2&3 to release the amount covered under insurance policies availed by her husband to the lst Respondent. But the lst Respondent initiated proceedings under the provisions of the SARFAESI Act, 2002 and failed d notice and possession notice to the Applicant as well as e deceased borrower. The impugned possession notice ' ';ri' -^" erp ed in two leading newspapers nor affixed on the so, the said notice is not legal and vaiid. Hence the
J. The 1"t Respondent filed their Reply denying a1l the adverse allegations made in the SA and contended that Mr.Bala Kishan Nayak along with the Applicant herein availed loan to an extent of Rs.32 lakhs from the l"t Respondent and the Applicant herein created mortgage against the schedule property. The borrower and the Applicant voluntarily taken the insurance policies and it would cover the risk of repayment of the above loan facility in case of occurrence of any insured event to the insured person such as 1) major medical illness & procedures 2) personal accident and 3) loss ofjob. Respondent No.3 has not issued any insurancepolicy to the deceased borrower since by the time ofissuance of the insurance policy, Mr.Bala Kishan Nayak had already passed away, as such the premium amount which was deducted by the 1st Respondentwas reversed and adjusted to the loan accountof the Applicant.Thereafter,in view of the default committed by the borrowerand the Applicant herein, the1st Respondent classified the loan accountas NPA and issued demand notice dt.26.O4.2024 andpossession notice dt.27.O7.2024 to the Applicant and the legal heirs of the deceased borrowerand the said notices were received by the applicant. The saidpossessionnoticewas published in two daily newspapers. Thereafter, thelst Respondent also proceeded u/s 14 of the SARFAESI Act, 2OO2 andthe advocatecommissioner appointedby the Ld.Sr.Civil Judge, Medak inCrl.M.P.No.42124had taken the physical possession and handed over thepossessionof the secured asset to Respondent No.1 on07.O2.2O25. Thus,the l=t Respondentfollowedthe procedure contemplated under theprovisionsof SARFAESIAct, 2002and Rules made thereunder and thereare no deviations' Accordingly l"t to dismiss the SA.
salaried. The 2"d Respondent issued Group Hospital Shield valid from 10.11.2023 to 09.11.2026 for a sum of Rs.60,000/- and ICICI Griha Raksha Policy Building cover for an assured sum of Rs.12,60,015/Medical reports and post mortem report are not filed by the Applicant so as to conlirm the death of late Dhanavath Bala Kishan Nayak due to heart attack however, since the deceased borrower died a natural death and so, the said death is not covered in the policy and accordingly, Respondent No.2 is not liable to pay the assured amounts. Accordingly, 2nd Respondent prayed to dismiss the SA.
Point JVo.(i):-
During ents, Ld. Counsel for the Applicant and Ld. nt and Ld.counsel for the 2"a Respondent reite ions as stated supra. f( * '1 3 0 ,.rult 1625 5l 7. Th o dispute the fact that one Bala Kishan Nayak as bo licant herein as co-borrower availed housing loan e' ent and the Applicant herein created mortgage
against the schedule property and the borrower had taken insurance policies from the 2"d Respondent. After availing the loan, the borrower and the Applicant committed default in repaying the loan dues. The borrower expired due to heart attack and thereafter, the 1"t Respondent declared the loan account of the deceased borrower as NPA.
5
death and the said death is not covered in the above statedpolicies and so, the 2nd Respondent is not liable to pay the assured amounts covered under the aforesaid insurance polices obtained by the deceased borrower. Whereas Respondent No.3 has not issued any insurance policy to the borrower since by the time of issuance of the policy, Mr.Bala Kishan Nayak passed away on 17.11.2023 and so, the premium amount which was deducted by the 1"t Respondent was reversed and adjusted to the loan account of the Applicant. However, the insurance claim shall be adjudicated by the Hon'ble District Consumer Commission-lll, Hyderabad wherein the Applicant liled a consumer case.
j ro mntrftd % Hon'l h CourA of Andhra Pradesh in M/s Solithro Prfuate Lirnlted t9t.t ,P W*rr,'#
Vs. The Deb* recovery Tribunal-l, reported in 2018 SCC Online Hgd. I88, has held in paragraph 17, which is as follows:
n$eB rd'dUell]frere in issuing possession notice dt.27.O7.2024 uls ,the lst Respondentalso proceeded u/s14 of pursuant to the orders of Ld.Sr.Civil Judge,
commissioner took physical possession of the
schedule property by duly obtaining panchnama and also handed over the possession of the secured asset to the l't Respondent. However, the Appiicant has not challenged the said proceedings in thepresent SA. Accordingly, this point is answered in favour of the RespondentsNo. 1&2 and against the Applicant.
Point No.(ii):-
(Dictated to the P.S, transcibed bg her, corrected, signed and pronounced bg me in the open court on this the 30th dag of June, 2026)
sd/(G. GOPI CHAND) PRESIDING OFFICER
30 Juilzm :i
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2 issues framed by the court
Whether the applicant established valid grounds to set aside the possession notice issued under Section 13(4) of the SARFAESI Act.
Whether the 1st Respondent followed due procedure in issuing demands and possession notices under the SARFAESI Act.
Colour shows how this judgement treated each authority
M/s Solithro Private Limited v. The Debt Recovery Tribunal - 1Explained¶36
M/s Solithro Private Limited v. The Debt Recovery Tribunal - 1
2 provisions across 1 enactments
Smt. Dhanavth Priya Nayak
IFK Home Finance Ltd.
ICICI Lombard General Insurance Co. Ltd.
HDFC Life Insurance Company Ltd.
Gummadi Gopichand
As recorded by the court registry
2 orders share this CNR
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