MR SHAHUL HAMED BADHUSHA vs GRIHUM HOUSING FINANCE LIMITED on 29 October 2026

IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

IA 1595/2026 (Waiver) in A.IR:3042/2026

Shahul Hamed Badhusha V/S Grihum Housing Finance Ltd 29/10/2026

Learned Counsel for both sides are present.

This appeal is filed against the order passed in IA No. 2388 of 2026 filed for staying further proceedings in SA No. 706 of 2026.

SA No. 706 of 2026 has been filed to set aside the measures taken by the Respondent Financial Institution under Section 14 of the SARFAESI Act, 2002 and the orders obtained in Crl. M.P. No.7186 of 2026 on 7.9.2026, passed by the Learned Chief Judicial Magistrate, Egmore, Chennai as erroneous, illegal and void.

It is the submission of the Learned Counsel for Petitioner that Petitioner was not served with the demand notice and possession notice issued under Section 13(2), and Section 13(4), respectively, of the SARFAESI Act, 2002. When it was pointed out to the Learned Presiding Officer, DRT-III, Chennai, Learned Presiding Officer, DRT-III, Chennai observed that “the contention taken by the applicant is Section 13(2) notice and Section 13(4) notice are not served which is contradict to the recording of the pleadings in the Section 14 order. Applicant has not made out a case, hence, IA No.2388/2026 for stay stands dismissed.”.

It is further submitted by the Learned Counsel for the Petitioner that the order dismissing IA 2338 of 2026 is not a speaking order. This order has not considered the case of the Petitioner but was passed only on the basis of recording of pleadings in the Section 14 order. Therefore, this appeal is filed. On these grounds, the Petitioner seeks waiver of pre-deposit. No other ground is urged for waiver of pre-deposit.

Learned Counsel for Respondent submits that the appeal cannot be entertained without pre-deposit. At least, 25% of the amount due should be made as pre-deposit for entertaining the appeal.

It is further submitted that Petitioner availed the loan by submitting application dated 10.3.2023, created mortgage by deposit of title documents. The account was classified as NPA on 5.1.2026. Demand notice was issued on 9.1.2026, and it was served on the Petitioner on 17.1.2026. The Respondent has proof of service in the form of tracking record. On the failure of the Petitioner to make payment, as demanded in the Section 13(2) notice, possession notice was issued under Section 13(4) of the SARFAESI Act, 2002 on 27.3.2026. The possession notice was published, and personally served through post. Proof of service of possession notice and all the necessary documents are produced. Petitioner has not paid any amount after the issuance of the demand notice. The current outstanding, as on date, is at Rs.48,95,661.44p.

Considered the rival submissions and perused the records.

A perusal of the impugned order of the Learned Presiding Officer, DRT-III, Chennai shows that this order was passed without considering any of the grounds raised in the SARFAESI application. The grounds are not even considered prima facie. The Stay Application was dismissed mainly on the ground of alleged non-service of demand notice issued under Section 13(2), and possession notice issued under Section 13(4) of the SARFAESI Act, 2002, cannot be accepted for the reason that this contention is contradictory to the recording of the pleadings in the Section 14 order. This is not an appropriate and legal order. When the order passed under Section 14 is challenged, dismissal of the stay application on the basis of recording of pleadings in the Section 14 order is fundamentally wrong.

Be that as it may. This aspect will be decided in the main appeal. Pre- deposit is mandatory for entertaining this appeal under Section 18(1) of the SARFAESI Act, 2002. The debt due is inclusive of interest as per the definition of debt under Section 2(1)(ha) of the SARFAESI Act, 2002, read with Section 2(g) of the RDB Act 1993, which had been settled by the Hon’ble Supreme Court of India in re, M/s. Sidha Neelkanth Paper Industries Private Limited & Another Vs. Prudent ARC Limited & Others (Civil Appeal No. 8969 of 2022, decided on 05.01.2023) reported in 2023 SCC Online SC 12.

As per the submission of the Learned Counsel for Respondent, the current outstanding, as on date, is Rs.48,95,661.44p. It is informed that the property is not sold so far. Physical possession is also not taken.

In the said circumstances, and with a view to give the Petitioner an opportunity to settle the loan, this Tribunal directs the Petitioner to make a pre-deposit of 25% of Rs.48,95,661.44p in two equal instalments, within a period of four weeks from today, failing which this appeal would stand rejected. Till then, the interim order already passed with regard to taking physical possession of the secured asset is continued.

25% of Rs.48,95,661.44p comes to Rs.12,23,915.36p, rounded off to Rs.12,23,916/-, out of which the first instalment of Rs.6,11,958/- is to be made on or before 12.11.2026, and the second instalment of Rs.6,11,958/- is to be made on or before 26.11.2026.

The said pre-deposit should be made in the form of Demand Draft in favour of Registrar, DRAT, Chennai, payable at Chennai. In case pre-deposit is made within the stipulated period, Registrar shall invest the same in a Nationalized Bank for a reasonable period and renew it periodically, till further orders are passed.

At this juncture, Learned Counsel for Petitioner submitted that the matter may be referred to the Lok Adalat scheduled to be held on 31.10.2026 for exploring settlement. Therefore, Registry is directed to refer the matter to the ensuing Lok Adalat on 31.10.2026.

Learned Counsel for the Respondent is directed to inform the Respondent Financial Institution to depute a responsible officer to participate in the Lok Adalat on 31.10.2026.

Post the matter for compliance on 30.11.2026.

Sd/-

Chairperson