Allowed

Ms Xrbia Ambience Realty LLP v. Asset Reconstruction Company Ltd.

DRT18 Feb 2026SA/458/2025

Case brief

AI extract

What is this about?

In a securitisation application under the SARFAESI Act, the Tribunal allowed the applicant firm to quash enforcement actions concerning 79 specific flats. Ruling that the charge of mortgage was released because the original lender received the sale consideration from a third party, the court restrained the Asset Reconstruction Company from taking possession or selling those units.

What did the court decide?

Application allowed; actions under SARFAESI Act regarding 79 units declared null and void; defendant permanently restrained from taking possession or selling said units.

Ms Xrbia Ambience Realty LLP versus Asset Reconstruction… — Specific Performance | DRT (2026)

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Presented on: 30.04.2025 Registered on: 01.05.2025 Decided on: 18.02.2026 Duration: Y M D

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IN THE DEBTS RECOVERY TRIBUNAL AT PUNE (Before Shri Dilip G Murumkar, Presiding Officer) SECURITISATION APPLICATION No.458/2025

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M/s. Xrbia Ambience Realty LLP., A Limited Liability Partnership Firm registered under Limited Liability Partnership Act, 2008 having its office at – 929, Mantri House, 1^st Floor, Near Dnyaneshwar Paduka Chowk, F C Road, Pune- 411 004.

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Mr. Rahul Nahar

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Age – Adult, Occupation – Business

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Mr. Vishal Nahar Age – Adult, Occupation – Business Both R/at – Ratandeep, Plot No.150, Daulatram Mandir Road, Mukundnagar, Pune – 411 037.

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M/s. Xrbia Hinjewadi Developers Private Limited A Private Limited Company registered under Indian Companies Act, 1956 having its registered office at – 929, Mantri House, 1^st Floor, F C Road, Pune – 411 004.

… Applicants

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Versus

The Authorized Officer, Asset Reconstruction Company (India) Limited A Company incorporated under the Companies Act, 1956 and registered as an Asset Reconstruction Company pursuant to Section 3 of the SARFAESI Act, 2002 having its registered office at The Ruby, 10^th Floor, 29, Senapati Bapat Marg, Dadar (West), Mumbai – 400 028.

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The Branch Manager Asset Reconstruction Company (India) Limited A Company incorporated under the Companies Act, 1956 and registered as an Asset Reconstruction Company pursuant to Section 3 of the SARFAESI Act, 2002 having its registered office at The Ruby, 10^th Floor, 29, Senapati Bapat Marg, Dadar (West), Mumbai – 400 028.

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M/s. Eiffel Lifespaces Pvt. Ltd., Since under CIRP Through Resolution Professional Mr. Raghunath Sabanna Bhandari Flat No.501, Raj Atlantis, 2, Opp. SVP High School, Kanakia, Mira Road, Thane – 401 107. Also at – Office Number 125/126, Patil

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Plaza, Mitramandal Chowk, Parvati, Pune – 411 009.

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1. M/s. Xrbia Developers Limited Since under CIRP Through Resolution Professional Mr. Vikas Gopichand Khiyani Also at – Office Number 125/126, Patil Plaza, Mitramandal Chowk, Parvati, Pune – 411 009.

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1. M/s. Karjat Gold Club Pvt. Ltd. A Private Limited Company registered under – Indian Companies Act, 1956 Having its office at – Unit No.5, 6, 1^st Floor, Plot No.9, Section – 17, Sanpada, Navi Mumbai – 400 703.

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1. M/s. Xrbia Warai Developers Pvt. Ltd., Since under CIRP, Through Resolution Professional Mr. Vikas Gopichand Khiyani Also at – 929, Mantri House, 1^st Floor Near Dnyaneshwar Paduka Chowk, F C Road, Pune – 411 004.

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1. M/s. Xrbia North Hinjewadi Developers Pvt. Ltd., Since under CIRP Through Resolution Professional Mr. Sanjay Vijay Jeswani Also at – 929, Mantri House, 1^st Floor Near Dnyaneshwar Paduka Chowk, F C Road, Pune – 411 004.

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1. M/s. Goodland Properties Pvt. Ltd., A Pvt. Ltd. Company registered under

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Indian Companies Act, 1956 Having its office at - 929, Mantri House, 1^st Floor Near Dnyaneshwar Paduka Chowk, F C Road, Pune – 411 004.

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1. M/s. Goodland Homes Pvt. Ltd., A Pvt. Ltd. Company registered under Indian Companies Act, 1956 Having its office at – 122/126, Patil Plaza, Mitramandal Chowk, Parvati, Pune – 411 009.

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1. M/s. Arini Homes Pvt. Ltd., A Pvt. Ltd. Company registered under Indian Companies Act 1956 having its office at – Office No.21/22, Commerce Avenue, 4^th Floor, Above PNG Jewellers, Paud Road, Kothrud, Pune – 411 048.

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1. M/s. Eden Builders Pvt. Ltd., A Pvt. Ltd Company registered under – Indian Companies Act, 1956 having its registered office at – Office No.21/22, Commerce Avenue, 4^th Floor, Above PNG Jewelers, Paud Road, Kothrud, Pune – 411 048.

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… Defendants

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APPEARANCES For the Applicants For Defendant No.1 & 2

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Mr. N.K. Khasbardar - Advocate Mr. Rajesh Nagori a/w Mr. Sachin Kulkarni – Advocate

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None present for other defendants.

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JUDGMENT

(Delivered on 18^th February, 2026)

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The applicants being aggrieved by measures taken by defendant ARCIL has filed this application u/s 17(1) of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act” for short) seeking following reliefs:

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1. That the notice issued by the Defendant Company U/s 13(2) of Securitisation Act bearing date 11.07.2023 may kindly be declared as null and void and consequently be quashed and set aside.

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1. That the Defendant Company, its officers, agents, servants acting on its behalf may kindly be restrained permanently from executing the order issued by Hon’ble Chief Judicial Magistrate, Pune bearing date 28.03.2025 and the notices of Court Commissioner dtd. 05.03.2025 and 21.04.2025 and the said order/notices may kindly be declared as null and void and may kindly be quashed and set aside.

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1. That the Defendant Company may kindly be restrained permanently from taking any action under the provisions of Securitization Act and particularly to put the suit properties for sell U/s 13(4) of the said Act.

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1. That as and when warranted, the Applicants may kindly be allowed to amend, alter, delete etc, the Securitization

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Application.

1. That the Defendant Company may kindly be permanently restrained from taking possession of 79 Flats and selling the same under the provisions of Securitisation Act.

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1. That it may kindly be declared that the 79 Flats as disclosed in the Pursis of the Applicants dtd. 05.05.2025 stand released from the charge of mortgage of the Defendant Company since, the Original Lender has received the Sale Consideration thereof.

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1. That the order u/s 14 dtd. 28.03.2025, passed by the Hon’ble Chief Judicial Magistrate, Pune may kindly be declared as null and void and may consequently be quashed and set aside.

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Pleadings of both parties can be summarized as under:

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The applicant No.1 is a Limited Liability Partnership Firm engaged in the business of construction and development and applicant Nos.2 and 3 are the Partners. Defendant Nos.3 to 11 are either guarantor or mortgagor of the loan of applicant No.1.

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In or about 2018 applicants approached M/s. Larsen and Turbo Finance Ltd., (L&T Finance Ltd.) for availing certain financial facilities for completion of housing project. The said Company granted the credit facilities to the applicants and the applicants were regularly paying the installments. Further, it is contended that as per contention of defendant Company that the credit facilities were secured by mortgage of properties namely – (i) All that piece and parcel of land bearing Survey (Gat) Nos.36, 37, 39, 40, 42 (Part) and 339 admeasuring

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sum total of 49,210 Sq.Mtrs situated at Village Ambi, Tal. Maval, Dist. Pune along with the entire present and future unsold Units and structure therefrom and including all associated rights titles and interest in the project “Xrbia Ambi”; (ii) All that piece and parcel of the 48 unsold units admeasuring about 28315 sq.fts saleable area in the project Xrbia Hinjewadi Road and receivable from sold and agreed to be sold 22 Units admeasuring 13,695 sq.fts saleable area in the project Xrbia Hinjewadi Road and (iii) All that piece and parcel of 23 unsold Units admeasuring of 13,791 Sq.fts saleable are in the project Xrbia Hinjewadi and receivables from sold or agreed to be sold 12 Units admeasuring 6343 sq.fts saleable area in the project Xrbia Hinjewadi (for short “ suit properties”).

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It is contended that in the year 2023 because of the impact of Covid-19 and other circumstances the applicants suffered huge financial loss and their loan accounts became irregular. The other main cause of default was the higher rate of interest charged by L&T Finance Company. In or about 29^th March, 2023 L&T Finance Ltd assigned the loan liability of applicant to defendant No.1 ARCIL by executing Deed of Assignment but the same was not informed to the applicants.

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In or about 11^th July, 2023 defendant No.1 ARCIL issued Notice u/s 13(2) of the SARFAESI Act to the applicants and defendant Nos.3, 4 and 6, M/s. Xrbia Chakan Developers Pvt. Ltd. However, defendant Nos.3, 4 and 6 are before Hon’ble NCLT, Mumbai. After receipt of Demand Notice, the applicants approached defendant ARCIL and

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informed the officials of defendant ARCIL that the amount claimed in the Demand Notice is not due and payable. The officials of defendant ARCIL assured applicants that sufficient time would be given to them for clearing the outstanding dues.

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However, the defendant ARCIL breached its promise and obtained Order dated 28^th March, 2025 u/s 14 of the SARFAESI Act. The Ld. CJM, Pune appointed Court Commissioner for taking possession. Thereafter the Court Commissioner issued two Possession Notices dated 5^th March, 2025 and 21^st April, 2025 for taking possession of part portion of suit properties.

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Being aggrieved by the said action, the applicants approached the Hon’ble Tribunal and filed the present Securitisation Application on the grounds that the Demand Notice issued by defendant ARCIL is not in accordance with Section 13(3) of the Act. The defendant ARCIL has played fraud on the Hon’ble CJM and applicants by suppressing material facts and making misleading statements. In the Order passed u/s 14 defendant ARCIL have claimed charge over the Units which have already been sold before mortgage. The Order has been passed for 1034 Units of applicant No.1 which have been shown as “Unsold”. However out of 1034 Units, 79 Units have been sold and proceeds thereof has already been appropriated towards Escrow Account and defendant ARCIL has transferred substantial amount towards loan liability of the applicants. Further, the Original Lender has already received the amount of 79 Units and as such defendant ARCIL cannot

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proceed further against the said 79 Units. The value of remaining Units is more than Rs.200 Crores which is sufficient to liquidate the alleged dues of defendant ARCIL. The Notice of Court Commissioner dated 5^th March, 2025 is illegal as the Ld. CJM, Pune has passed the order of appointment on 28^th March, 2025.

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After filing of the present Securitisation Application the applicants moved IA No.1457/2025 seeking interim relief. The said IA was heard on 05^th May, 2025. During the arguments the applicants submitted that out of 1034 Units 79 Units have been sold and proceeds thereof have been credited either to the Escrow account or to the loan liability of the applicants and also showed their readiness and willingness to surrender the remaining Units which are not sold against total number of units of 1034. In response to the said submissions of applicants, the defendant ARCIL agreed to accept the possession of remaining Units by keeping issue of 79 Units open. In view of same, the Hon’ble Tribunal directed both the parties to submit Joint Pursis in the matter mentioning that the defendant ARCIL should not take the possession of the 79 Units. However, defendant ARCIL dissented to sign the Joint Pursis. The Tribunal accepted the Pursis filed by the applicants and passed order directing defendant ARCIL not to take possession of 79 Units.

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On 17^th May, 2025 the Ld. Court Commissioner again issued Possession Notice for taking the possessions of the suit properties on 28^th May, 2025. The applicants filed IA No.1663/2025 challenging the

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said Possession Notice. The Hon’ble Tribunal by Order dated 28^th May, 2025 granted stay for taking possession of 79 Flats/Units till remaining 955 Flats/Units are sold by defendant ARCIL.

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Being aggrieved by the said order, defendant ARCIL preferred Appeal before Hon’ble DRAT, Mumbai and said Appeal was disposed of by order dated 15^th October, 2025. Thereafter, applicants filed Writ Petition before Hon’ble Bombay High Court and same was disposed of with direction to Hon’ble Tribunal to dispose of the present Securitisation Application within one month.

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Hence, relief as claimed may be granted.

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Defendant No.1 ARCIL by filing Reply (Exhibit-15) resisted the application on the grounds that the present Securitisation Application is filed on false and baseless grounds and is devoid of merits. Since the applicants failed to clear the outstanding loan amount, the defendant ARCIL has rightfully taken action under the SARFAESI Act.

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It is contended that in the year 2018 applicant Nos.1 to 3 along with defendant Nos.4 and 6 approached L&T Finance Limited for availing certain credit facilities which were granted to them. Thereafter, in the year 2021 applicant Nos.1 to 3 again approached L&T Finance Limited and requested for additional credit facilities which were granted to them. After availing the credit facilities, the applicants and defendant Nos.3 to 11 breached the terms and conditions of Loan Agreements and failed to make payments. Consequently, the accounts were declared as NPA on 16^th May, 2023. L&T Finance Limited by

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Assignment Agreement dated 29^th March, 2023 assigned the debt of applicant Nos.1 to 4 and other Xrbia Group Companies to defendant No.1 ARCIL.

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It is further contended that since applicants failed to repay the outstanding amount, on 11^th July, 2023 defendant No.1 ARCIL issued Demand Notice u/s 13(2) of the SARFAESI Act. Defendant No.1 ARCIL also issued Notice u/s 13(4) of the SARFAESI Act and published the same in Free Press Journal and Nav Shakti against applicants and other borrowers and guarantors for taking symbolic possession of the suit properties.

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Thereafter between July, 2023 and March, 2024 applicants along with other borrowers approached defendant No.1 ARCIL with a request to restructure their existing loan facilities. In response, defendant No.1 ARCIL provided a draft Master Restructuring Agreement, however the applicants failed to respond. During this period, defendant No.1 ARCIL came to know that applicants have disposed of substantial project assets without obtaining prior written consent and No Objection Certificate from it. Thus, considering the defaults committed by applicants’ defendant No.1 ARCIL filed various litigations proceedings against Xrbia Group before DRT Pune, The Metropolitan Magistrate Court and The Economic Offences Wing, Mumbai which are pending. Further, simultaneous proceedings are ongoing before NCLT Mumbai against various entities of Xrbia Group.

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It is further contended that after the issuance of Demand Notice and

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Possession Notice, multiple insolvency proceedings have been initiated against various group companies under Section 7, 9 and 95 of the Insolvency and Bankruptcy Code, 2016, an attempt to invoke insolvency proceedings as a shield against enforcement of securities. It is further contended that despite completing a major portion of the Xrbia Ambi project and selling the same, the applicants failed to remit the payment due under the agreed loan agreement.

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It is further contended that the Notices u/s 13(4) of the SARFAESI Act were pasted on the mortgaged properties and were published on 15^th May, 2024 and 22^nd May, 2024 in the two newspapers. Thereafter, defendant No.1 ARCIL filed Application u/s 14 of the SARFAESI Act before the Chief Judicial Magistrate, Pune for taking possession of the suit properties. By order dated 28^th March, 2025, Chief Judicial Magistrate, Pune appointed Court Commissioner for taking physical possession of the suit properties.

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It is further contended that the Interim Application and Securitisation Application filed by applicants are totally untenable and frivolous. The applicants are trying to frustrate the execution of the order and delay the lawful process of possession. The applicants did not clear the outstanding dues even after the defendant No.1 ARCIL took symbolic possession of the suit properties.

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The allegation that defendant ARCIL has played fraud and suppressed material facts from Chief Judicial Magistrate, Pune is baseless and entirely misconceived. The applicants have sold 72 Units without

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seeking NOC of defendant No.1 ARCIL and have not deposited any sale proceeds in the Escrow Account. The total amount deposited is Rs.60,88,77,228/- which is glaringly insufficient and clearly does not reflect the full receivables from the said units. Defendant No.1 ARCIL is contractually entitled to recover the balance of the receivables for the 79 Units and proceed with taking possession of remaining unsold units. It is further contended that the mentioning of date 5^th March, 2025 in Possession Notice is typographical mistake in the English version of the possession notice. Further, clarificatory email was sent by the Court Commissioner on 28^th April, 2025.

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It is further contended that the actions undertaken by defendant No.1 ARCIL are within the legal framework of SARFAESI Act. They, therefore, prayed for dismissal of the present Securitisation Application.

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The following points arise for my determination and I record my findings thereon as under:

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(1) Whether action invoked under the provisions of the SARFAESI Act by the defendant ARCIL is legal and valid in the eyes of law?

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(2) Whether applicants are entitled for reliefs as claimed?

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(3) What Order? Findings:

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Point No.1 – In the negative only in respect of 79 Units/Flats. Point No.2 – In the affirmative to the extent of 79 Units/Flats .

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Point No.3 – As per final order.

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REASONS

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Heard the learned Advocate appearing for the applicants and defendant ARCIL. In order to substantiate the case of the applicants and defendant ARCIL their learned Advocates filed Written Notes of Arguments (Exhibit-18 and Exhibit-19, respectively) and also made oral submissions.

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Both the parties relied on documents produced by them and I refer only documents relevant to decide the dispute between the parties.

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Defendant No.3 M/s. Eiffel Lifespaces Pvt. Ltd., defendant No.4 M/s. Xrbia Developers Limited, defendant No.6 M/s. Xrbia Warai Developers Pvt. Ltd., and defendant No.7 M/s. Xrbia North Hinjewadi Developers Pvt. Ltd., are before NCLT, Mumbai.

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Defendant Nos.5, 8 to 11 did not appear which are formal parties.

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The learned Advocate appearing for applicants relied upon the following Judgments:

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(1) Standard Chartered Bank Vs. V. Noble Kumar and Others reported in MANU/SC/0874/2013.

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(2) Tirupati Storage and Allied Pvt. Ltd. Vs. The United Commercial Bank, Kolkata reported in MANU/BH/0825/2012.

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(3) Madhu Sudan Ghosh and Ors. Vs. The Bank of Baroda and Ors. reported in MANU/WB/0349/2010.

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(4) Punjab National Bank Vs. Telstar Industries Pvt. Ltd. Reported in

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MANU/GJ/2992/2019.

The learned Advocate appearing for defendant No.1 ARCIL relied upon the following Judgements:

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1. Standard Chartered Bank Vs. V. Noble Kumar and Others reported in (2013) 9 Supreme Court Cases 620.

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2. ARCE Polymers Private Limited Vs. M/s. Alphine Pharmaceuticals Private Limited and Others [Civil Appeal No.7372 of 2021 decided by Hon’ble Supreme Court on 3^rd December, 2021].

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3. Phoenix ARC Private Limited Vs. The State of Maharashtra and Ors. [Writ Petition No.9749 of 2021 decided by Hon’ble Bombay High Court on 3^rd August, 2022].

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Point Nos.1 to 3

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Since all these points are interconnected with each other, I record my findings thereon simultaneously.

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Following are admitted facts:

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(a) The applicants have taken loan from M/s. Larsen and Turbo Finance Ltd., (L&T Finance Ltd.), original lender.

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(b) The said loan has been assigned to defendant ARCIL in the month of March, 2023.

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(c) Property bearing Survey (Gat) Nos.36, 37, 39, 40, 42(Part) and 339 situated at Village Ambi, Tal. Maval as well as properties at Hinjewadi are mortgaged.

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At the time of challenging Possession Notice, the applicants surrendered possession of mortgaged suit properties except 79 Units

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standing thereon. Applicants are ready to surrender possession of 18 vacant Units also which is seen from e-mail dated 11^th February, 2026 produced vide Pursis (Exhibit-24). Therefore, real dispute is only in respect of 79 Units. Hence, I scan evidence in respect of only 79 Units. 28. The applicants have challenged Demand Notice dated 11^th July, 2023 issued by defendant ARCIL claiming Rs.111,92,53,965/- on the grounds that no details of debit and credits are given therein.

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On cursory perusal of Demand Notice it appears that details like principal amount, amount of penal interest, unapplied interest, rate of interest at which amount is to be paid, amount of debit and credit of the loan account are lacking. Therefore, prima facie , it appears that Demand Notice is defective.

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During pendency of this proceeding, applicants surrendered major part of mortgaged properties to defendant ARCIL of which value is about Rs.1,97,26,85,300/- as per Valuation Report produced by the applicants along with Pursis dated 28^th January, 2026 (Exhibit-21) whereas admittedly today’s dues are Rs.151 Crores. As per observations made in the case of Standard Chartered Bank Vs. V. Noble Kumar the secured creditor is entitled to take possession of the property and alienate the same to the extent of recovery of its claim and not more than that. In my candid opinion, the defendant ARCIL can recover its whole outstanding amount by disposing off mortgaged properties of which possession is with them.

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The defendant ARCIL is pressing that 79 mortgaged Units have been

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sold by the applicants. According to them, the applicants have sold out those 79 Units without obtaining NOC from it or L&T Finance Ltd., original lender. So also, amount received from selling those 79 Units is not paid to defendant ARCIL or L&T Finance Ltd., original lender.

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According to applicants, during lockdown they obtained loan/financial assistance from Eiffel Shelters Pvt. Ltd for Rs.18 Crores and out of that amount Rs.17,97,98,065/- was paid to L&T Finance Ltd., and allotted those 79 units to Eiffel Shelters Pvt. Ltd. All these events ensued with the consent of L&T Finance Ltd., original lender and Joint Meeting of these three parties held on 11^th November, 2020 in that respect.

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The letter dated 5^th February, 2026 of Eiffel Shelters Pvt. Ltd and Statement of Accounts of it maintained with Punjab National Bank and MOU dated 1^st December, 2020 between applicant No.1 and Eiffel Shelters Private Limited and Statement of Account produced by the applicants along with IA No.400/2026 and IA No.372/2026 corroborates the case of the applicants. From these documents it reveals that Eiffel Shelters Private Ltd through its bank i.e. Punjab National Bank paid Rs.17,97,98,065/- to L&T Finance Ltd, original lender on behalf of applicant No.1 in pursuance of MOU dated 1^st December, 2020 and as per said MOU 79 Units have been allotted to Eiffel Shelters Private Ltd.

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It is to be noted that defendant ARCIL has neither obtained information nor filed affidavit of L&T Finance Ltd, original lender to

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show that sale consideration of 79 Units is not received to it.

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On taking into consideration this documentary evidence, I candidly hold that applicants have paid more than the sale consideration of 79 Units to L&T Finance Ltd, original lender through Eiffel Shelters Private Ltd.

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The applicants have not taken NOC from L&T Finance Ltd, original lender for selling 79 Units. However, since original lender L&T Finance Ltd., accepted sale consideration of 79 Units, NOC is deemed to have been given by conduct i.e. by accepting price of 79 Units. Therefore, it could be said that charge on these 79 mortgaged Units has been released by L&T Finance Ltd., original lender.

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At this juncture, it is to be noted that dispute regarding 79 Units was earlier raised by defendant ARCIL and applicants had moved IA No.1663/2025. On hearing both the parties, stay for taking possession of 79 Units described in Possession Notice scheduled on 28^th May, 2025 was granted. The said order was challenged by defendant ARCIL before Hon’ble DRAT, Mumbai. However, Hon’ble DRAT has not set aside the impugned order passed by this Court. Therefore, Order passed therein has attained finality and now defendant ARCIL cannot again raise the same dispute.

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It is also pertinent to note that applicants made amendments in the pleadings of this application. However, defendant ARCIL chose not to file Statement of Objection to amended plaint. Therefore, an inference could be drawn that defendant ARCIL has admitted the case of the

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applicant.

In view of above observations, it is safe to hold that having obtained order u/s 14 of the SARFAESI Act by defendant ARCIL is not maintainable and sustainable in law. Consequently, I hold that action initiated by defendant ARCIL under the SARFAESI Act is not legal and valid in the eyes of law. Therefore, applicants are entitled for relief as claimed.

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Before parting with Judgment, I, with great regards, mention that Authorities cited on behalf of defendant ARCIL are not applicable to present case as they turn on different points than facts of the present case. Per contra , Authorities cited by applicants are squarely applicable to the present case.

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Therefore, by answering these points accordingly , I proceed to pass the following order:

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ORDER

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A. Securitisation Application No.458/2025 is allowed.

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B. All actions taken by defendant ARCIL under the SARFAESI Act only in respect of 79 Units (enlisted with Pursis Exhibit-9) are hereby declared as null and void.

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C. Since charge of mortgage on 79 Units is held to be released, the defendant ARCIL is permanently restrained from taking possession and selling those Units under the provisions of SARFAESI Act.

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D. All pending Interlocutory Applications, if any, shall stand disposed off.

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Pronounced in open Court.

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Place: Pune Date: 18.02.2026