Dismissed

Mr L N Kiran kumar v. Gic Housing Finance Ltd.

DRT29 May 2026SA/518/2024

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed a securitization application filed by borrowers to set aside a demand notice and possession notice under SARFAESI Act. The court held that the lender complied with statutory requirements regarding notice service and publication, and increase in EMI was not a valid ground for default.

What did the court decide?

SECURITIZATION APPLICATION DISMISSED.

Mr L N Kiran kumar versus Gic Housing Finance Ltd. — Execution and Attachment | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD

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DATED THIS THE 29TH DAY OF MAY, 2026

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PRESENT: SH. RAMESHWAR KOTHE, B.Com, L.LB. (Hons.), M.A.

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PRESIDING OFFICER

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Securitization Application No. 518 OF 2024

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L N Kiran Kumar Eranki, Son of Sri Ganapathi Rao Eranki, Aged about 43 years, Occupation: Employee, Residents of Gut No.192 Part, Building Name: Sri Sai Rama Residency, Flat No.A-3, T-1, Floor No. A, Land Mark near Ramakrishna School, Village Yapral, Hyderabad Telangana 500 087

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Smt. Vijaya Lakshmi Eranki, Wife of Sri Ganapathi Rao Eranki, Aged about 65 years, Occupation: House-hold, resident of Gut No.192 Parl, Building Name: Sri Sai Rama Residency, Flat No.A-3, T-1, Floor No. A, Land Mark Near Ramakrishna School, Village Yapral, Hyderabad Telangana 500 087

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.......Applicants

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Versus

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GIC Housing Finance Limited, Represented by its Authorized Officer, GIC Housing Finance Limited, 4th Floor, 3-6-438/4, Naspur House, Himayath Nagar, Hyderabad 500 029

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...... Respondent

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: Mr. Chunchu Kishore Counsel for the Applicant Counsel for Respondent Company : Mr. Dhirendra^{Kumar Singh}

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-:ORDER:-

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The present Securitization Application is filed by the^Applicant u/s.17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2OO2 ("Act" hereinafter for short) to set aside demand notice dated W-L0.2024 under section

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SA No. 518/2024

13(2) of the Act, the^{possessionnotice dated20.12.2024under} section 13(4) of the^{Act and to forbidRespondent Companyfrom} proceeding under section 14 of the Act^{against the applicantsSA} Schedule Property.

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The averments of the^{application,briefly, are that the} Applicants availed a home^{loan of Rs.41,11,091/-from the} Respondent Company in^{year 2018, for the purchaseof a second sale} property. The Bank unilaterally enhanced the^{EMI to Rs.42,2281-} without issuing any^{prior notice or obtaining the Applicant'sconsent,} and continued to recover^{the enhanced EMI instalmentsuntil March} 2024, thereby altering the^{terms of the loan without proper} intimation. Thereafter, the^{Bank classified the accountas a NPA and} issued a demand notice^{dated 07.10.2024 under Section13(2) of the} SARFAESI Act, 2002, demanding^{a total sum of Rs.41,79,2681-} (inclusive of principal, interest,^{penal interest,chequereturn charges,} and recovery charges), without^{clearlydisclosing the actual overdue} amount or the date on^{which the account was classified as an NPA, as} required under the SARFAESI^{framework.Subsequently, the Bank} took symbolic^possession of the^{secured propertyand issued a} possession notice, however without following the^{Rules B(1), B(2),} 8(6) & B(7) of the Security^{Interest (Enforcement)Rules,} 2002,(hereinafter^"Rules" for short).^{Hence this SA to set aside all the} measures against the SA schedule^properties.

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The Respondent Company filed^{reply statement. The averments} in brief, are that the Applicants availed^{housing loan in year 2018,} however on account of borrowers default in^{repayment, the account} was classified as a NPA w.e,f.^{28.09.2024. The RespondentCompany} issued a demand notice under Section 13(2) of^{the SARFAESI Act,} 2002, on 07.10.2024, which was duly^{served upon the borrowerson} 09.LO.2024 and^{published in} two^{newspaperson 18.10.2024. Despite} /Mu\ (y /E\

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sA No. 518/2024

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service of the said demand notice, the borrowers neither^{repaid the} outstanding dues nor raised any representation or objection^under Section 13(3A) within the statutory^period of 60 days.^Thereafter, after completion of the 60-day^period, the Bank^issued a^Possession Notice dated 20.L2.2024, which was affixed on the secured^property, served by registered^post, and^published in^newspaperson 24.12.2024, in compliance with the requirements of Section¹³⁽⁴⁾ and Rule B of the Rules, 2002. The^{RespondentCompanyhas denied} the allegations made by the borrowers, and^has asserted^{that it has} strictly followed all mandatory^procedures under the^SARFAESIAct and the Rules. Hence, Respondent^prays for^{dismissal of the SA with} costs.

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Heard both Learned CoLlnsel for the^Applicants and^Learned Counsel for the Respondent Company.^Perused the^{materialbrought} on record.

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During the course of arguments, the Learned^{Counsel for the} Applicants reiterated the contents of its applicatlon^{and submits that} they availed a home loan of Rs.41,11,091/- on^{06.03.2018,but the} Bank unilaterally enhanced the EMI to Rs.42,228l-^{withoutnotice or} consent and continued recovery up to^March2024' lt^{is further} contended that the Section 13(2) demand notice daled^07.L0.2024 was defective for non-disclosure of the actual overdue^amountand NPA date, and that symbolic^possession was taken^{withoutproper} service, affixture, or^publication as required^{underthe SARFAESI Act} and the Rules, 2002, hence all the^{measures against the secured} property are to be quashed.

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Per contra, Learned Counsel for the^{RespondentCompany} denied applicants' averments and^{placedreliaqteupon the material} /w*o

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SA No. 518/2024

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papers annexed to reply statement and submitted that due to^default in payment, the loan account of the^{applicantswas classifiedas an} NPA as per RBI^{guidelines and the RespondentCompany has strictly} followed the due^{procedure prescribedunder the Act, 2002 and the} Rules thereunder, hence the SA^{is liable} to^{be dismissed.}

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

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i) Whether the applicants made out^{any valid ground for} quashing any of the measures initiated by the Respondent Company against the SA Schedule^{Property,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 facility from the} Respondent Company against^{mortgageof the SA schedule property.} Increase in EMI amount cannot be a^{ground for committing default.} There is default in repayment for^{reasons whatsoever hencethe} action of the Respondent Company^{in classifying the accountas NPA} and taking action under the^{SARFAESI Act cannot be faulted or} treated as illegal.

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Another contention of the applicants is^{non-complianceof} Sections 13(2) & 13(4) of the^{Act read with Rules 3, 8(1) & B(2)of} the Rules, 2002. The Respondent Company^{relied on copies of} documents annexed with the reply^{statement. Pages 1 to 7 of the} material paper annexed to the reply statement^{are the Photostat} copies of frostal receipts and^publication of the^{same in English and} Telugu (vernacular language) newspapers on 18.10.2024^proving service of demand notice. Similarly, Pages B to¹⁰ are the^Photostat copies of possession notice being served throug[,registered^post, aw,'

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SA No. 518/2024

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photographs as proof of affixture on secured assets and^{publicationof} the same in English and Telugu^{(vernacular language)newspaperson} 24.12.2024. The documents^placed on^{recordby the Respondent} Company remain undisputed. In view of sufficient^proofplaceon record, I find no infraction of section 13(2) & 13(4)^{of the Act and} Rules 3, 8(1) & B(2) of the Rules, 2002.^As a^{securedcreditorthe} Respondent Company initiated the^{SARFESIproceedings, which} cannot be categorized as illegal or arbitrary.

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In the view of above observations, it^{is concluded that the} applicants have failed to make out any^{valid ground to set aside the} measures of the Respondent Company^{under the Act, 2002 against} the SA schedule^property and accordingly^{SA is liable to be dismissed.}

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Point No.(ii):

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