Dismissed

P Shamsheer Khan v. Piramal Capital and Housing Finance Limited

DRT13 Jul 2026SA/78/2025

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal at Hyderabad dismissed an application under Section 14 of the SARFAESI Act filed by loan defaulters seeking to set aside physical possession measures. The court found the initiation of proceedings legal and adequate documentation in support of demand and possession notices, failing to discharge the burden to quash the measures.

What did the court decide?

The Securitisation Application under Section 14 of the SARFAESI Act is dismissed.

P Shamsheer Khan versus Piramal Capital and… — Contract and Commercial Disputes | DRT (2026)

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IN THE DEBTS RECOVERY TRIBUNAL - II AT HYDERABAD DATED THIS THE 13TH 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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P. Shamsheer Khan,

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S/o. Late P. Mahaboob Ali Khan, Aged about 50 years, R/o. D. No. 10/1040, KMHStreet,Kadapa, Andhra Pradesh - 516001

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P. Shakira Khanam,

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W/o. P. Shamsheer Khan, Aged about 57 years, R/o. D. No. 10/1040, KMHStreet,Kadapa, Andhra Pradesh - 516001

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Applicants

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Versus

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Pirmal Capital & Housing Finance Limited., Erstwhile Dewan Housing Finance Corporation Ltd., Branch Office at D, No. 7-1-615, 616 and 6t7/A, Imperial Towers, 4th Floor, Unit: t,2 and 3, Ameerpet, Main road, Hyderabad, Telangana- 500016, Represented by its authorized officer ...Respondent

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Counsel for the Appticants : Sri. Gangishetty Srinivas Counsel for Respondent : Ms. P. S. Sujatha

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-:ORDER:-

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The present Securitization Application is filed by the Applicants u/s.L7 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("Act" hereinafter for short) to set aside all the measures initiatgd. by the Respondent ow*

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Page 2 of 6

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sA No.781202s

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Company under the section t4 of^{the Act, including the action of} taking physical^possession of the SA^{SchedulePropertyvia advocate} commissioner notice dated 10.02.2025^{pursuant to the ordersin} Crl.M.P.No.625 of 2024 by the^{Hon'ble PrincipalChief Judicial} Magistrate cum Principal Assistant Sessions^{Judge,Kadapa.}

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I .;!

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The averments of the application, briefly, are^{that the} reSpondent sanctioned a housing loan of ?63,50,000/-^{in year 2022.} It is contended that while an amount of ?41,58,688/-^{was directly} remitted to LIC Housing Finance Limited towards^{closure of their} existing loan account, the^{welcome letter reflected a disbursed} amount of t45,45,897/-,^{therebydisclosingan unexplained difference} of {3,87,209/-^{which was never paid to them. The applicants further} allege that the respondent unlawfully^{debitedlife insurance premium,} general insurance premium and^processing charges to the^loan account and, despite refund of the life^{insurancepremiumby} Pramerica Life Insurance Limited, failed to credit the^refunded amount to the loan account while continuing to^{levy interest thereon.} It is also alleged that the respondent charged^{excessive floating} ipterest, insurance premium and^processing charges by^adopting unfair accounting^practices. The applicants further^{aver that despite} having paid 17,15,920/- towards the loan and^{expressing their} willingness to regularise the loan account by clearing the^outstanding dues, the respondent^proceeded with measures under^{the SARFAESI} Act. It is contended that the respondent issued the demand^notice under Section 13(2) of the SARFAESI Act-on 08.1t.2023,^followedby the possession notice under Section 13(4) dated^07.08.2024, containing incorrect^particulars regarding the^{loan disbursementand} repayment schedule. The applicants also contend that the^respondent was aware that the secured asset was tenanted and that the^rental income constituted a source for repayment of the loan.^The applicants' further challenge the OroceedinSj4f]ef^{unOer Section} - : L/ r}\r-

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Page 3 of 6

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SA No.7812025

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14 of the SARFAESI Act, contending that the Advocate Commissioner issued the possession notice dated 10.02.2025 after expiry of the warrant issued by the Chief Judicial Magistrate on 24.0t.2025 without any order extending its validity. In support of the said contention, reliance has been placed upon the judgment of the High Court of Andhra Pradesh in Mangalagiri Textile Mills Private Limited v. SBI, wherein it was held that an order passed under Section 14 loses its efficacy upon expiry of the returnable date unless its validity is specifically extended. The applicants further aver that Applicant No.1 met with a road accident on L6.12.2024 and underwent surgery, rendering him physically incapacitated during the relevant period. On the aforesaid grounds, the applicants seek to set aside the measures initiated by the respondent under the SARFAESI Act and grant consequential reliefs.

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The Respondent Company filed reply statement along with documents. The averments thereof, briefly, are that it is admitted that the Applicant availed a housing loan of ?63,50,000/-, but committed default in repayment, resulting in the loan account being classified as a NPA on 04.07.2023. It is contended that a demand notice under Section 13(2) of the Act was issued on 08.11.2023 and duly served upon the Applicant, affixed on the secured asset,. and published in newspapers. Upon the Applicants'failure to discharge the outstanding liability, the Respondent issued a possession notice dated 07.08.2024 under Section 13(4) of the Act and, thereafter, initiated proceedlngs under Section 14 of the SARFAESI Act before the Principal Chief Judicial Magistrate-cum-Principal Assistant Sessions Judge, Kadapa, who appointed an Advocate Commissioner to take physical possession of the secured asset. The Respondent further denied the Applicants' claim regarding the alleged tenancy, contending that the same is false, fabricated, and created only to obstruct the recovery proceedings. It is pointed out that the

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Page 4 of 6

SA No. 7812025

Applicant, in the^{legal notice dated 02.06.2023, made no referenceto} any lease agreement^{or tenancy, thereby demonstratingthat the plea} of tenancy is an afterthought.^{Itis further contended that all} statutory requirements^{relatingto service of notices, affixture,and} publication have been duly^{complied with. Accordingly,the} Respondent Company^{prays for dismissalof the S'A'}

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Heard both learned^{counselfor the applicants and learned} counsel for the^{RespondentCompany.Perused the materialbrought} on record.

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The learned^{counsel appearing for the Applicants and the} learned counsel for the^{Respondentreiterated respective version as in} the Securitisation^{Application and the Reply Statement,and prayed} for approPriate^orders.

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

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i) whether the appticant^{made out any valid ground for} quashing the action of the^{RespondentCompany for} iaking^{-the physicat possessionofthe SA schedule} prop6rty through Advocate Commissioner^{appointed under} 'the provision of the Section 14 of the SARFESI Act?

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ii) To what relief?

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Point No.(i):

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Admittedly, the applicants^{availedCredit Facilityagainst} mortgage of schedule^{propertyas security and failed to make} payment as per repayment schedule.^{Hence the action of the} Respondent company^{in classification of .:;?fli2[Aand initiatins} r -' '" "/*-t5\

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Page 5 of 6

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SA No. 7812025

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the SARFESI proceedings cannot be termed as illegal or irregular as contended by the applicants.

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The respondent company has filed material documents annexed with the reply statement to prove the compliance of the SARFESI Act and Rules, thereunder. Pages 20 to 35 are the Photostat copies of postal receipts, tracking reports, affixture of the demand notice over the secured asset and paper publication of the same in English and Telugu (vernacular language) newspaper on 16.t2.2023 proving service of demand notice. Similarly, Pages 36 to 44, are the Photostat copies of possession notice being served via registered post, photographs as proof of affixture on secured assets and publication of the same in English and Telugu (vernacular language) newspapers on t3.08.2024. The documents placed on record by the Respondent Company remain undisputed. 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 Rules,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 the view of above observation, I hold that the applicants failed to make out any valid grounds to interdict the SARFESI measures of respondent company in respect of the SA Schedule property including the action of taking physical possession of the same under section t4 of the Act and accordingly the SA is liable to be dismissed.

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Point No.^(ii):

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