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HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
MOUSHUMI BHATTACHARYA, GADI PRAVEEN KUMAR, JJ.
Mohammed Yousuf Ali – Petitioner
Versus
Sammaan Capital Limited and Another – Respondents
Civil Revision Petition No.74 of 2025
Decided On : 29-01-2026
| Table of Content |
|---|
| 1. facts relating to loan agreement and drt proceedings (Para 1 , 2 , 3 , 4) |
| 2. petitioner's challenge to drt's order (Para 5 , 6) |
| 3. respondent's contentions regarding loan practices (Para 7) |
| 4. court's observations on undisputed facts (Para 8 , 9) |
| 5. alteration of loan terms without consent (Para 10 , 11) |
| 6. payments made versus outstanding amounts (Para 12 , 13) |
| 7. interest rate changes during the loan tenure (Para 14 , 15) |
| 8. violation of rbi guidelines by lenders (Para 17 , 18 , 19) |
| 9. importance of borrower awareness regarding changes (Para 20 , 21) |
| 10. context of drt's order and high court's direction (Para 22 , 23) |
| 11. assessment of evidence and communications (Para 24 , 25) |
| 12. errors in drt's analysis and conclusions (Para 26 , 27 , 28) |
| 13. legal context regarding judicial review (Para 29 , 30) |
| 14. responsibilities of the lender under rbi guidelines (Para 31 , 32) |
| 15. concerns regarding fairness in lending practices (Para 33 , 34) |
| 16. reasonableness in interest rate calculations (Para 35 , 36) |
| 17. outstanding debt analysis (Para 37) |
| 18. judicial authority to correct errors (Para 38) |
| 19. precedents regarding review applications (Para 39 , 40 , 41 , 42) |
| 20. implications of lender's claims for outstanding amounts (Para 43 , 44) |
| 21. court's jurisdiction under article 227 (Para 45 , 46) |
| 22. final order to set aside drt's decision (Para 47 , 48) |
| 23. order allowing the petition (Para 49) |
ORDER:
Moushumi Bhattacharya, J.
1. The Civil Revision Petition has been filed against an order passed by the Debts Recovery Tribunal–II, Hyderabad (‘DRT’) on 26.12.2024 by which the DRT refused to allow a Review Petition filed by the petitioner in respect of its earlier order dated 10.09.2024. The DRT had dismissed the petitioner’s S.A.No.601 of 2017 by the order dated 10.09.2024.
2. The petitioner is the Borrower of a loan from the respondent No.1/Sammaan Capital (formerly Indiabulls Housing Finance Ltd.) The respondent No.2 is Asset Reconstruction Company (India) Limited (‘ARCIL’), who was impleaded by an order dated 04.02.2025 in I.A.No.2 of 2025 in CRP No.74 of 2025, on the basis of a Notice of Sale dated 24.01.2025 issued by the respondent No.2 stating that the petitioner’s Home Loan facility had been assigned to Edelweiss Asset Reconstruction Company Limited which was subsequently assigned to ARCIL vide Registered Assignment Agreement dated 02.11.2023.
3. The petitioner has challenged the impugned order dated 10.09.2024 whereby the DRT dismissed the SA filed by the petitioner against a Possession Notice dated 12.06.2015 issued by the respondent No.1 against the application schedule property under section 17 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’). A Review Application in respect of the aforesaid order was dismissed on 26.12.2024.
4. A timeline of the relevant facts is stated below:
(i) The respondent No.1/Sammaan Capital offered a Home Equity Loan Facility to the petitioner for Rs.15 lakhs in 2007 on the promise that it would be repayable in equated monthly instalments (EMI’s) at the rate of 12% per annum for a tenure of 84 months or seven years.
(ii) The respondent No.1 obtained the signatures of the petitioner on blank papers by informing the petitioner that the details would be filled in with fixed rates and the tenure as promised on the premise that it was a regular practice to obtain signatures on an unfilled loan agreement for speedy disbursement of the loan.
(iii) The respondent No.1 subsequently filled up the Loan Agreement with certain altered terms and conditions whereby the interest was changed to a floating/adjustable rate of interest as opposed to a fixed rate of interest. The respondent No.1 also increased the tenure to 144 months or twelve years then to 341 months or 28 years and 5 months instead of 84 months or seven years as had been promised to the petitioner.
(iv) The respondent No.1 initially entered the payable interest rate in the Loan Agreemen
Lenders must adhere to RBI guidelines regarding loan terms disclosure and communication to borrowers; changes without notice violate borrowers' rights.
The Banking Ombudsman must adhere to principles of natural justice, providing a fair hearing before resolving complaints, especially regarding unilateral changes in loan terms by banks.
Banks must adhere to RBI guidelines regarding interest rates and cannot charge excessive rates without borrower consent, ensuring transparency and fairness in lending practices.
Provision of Section 24A of 1986 Act mandate observance of limitation period unless sufficient cause with a reasonable explanation is available for condoning delay to be recorded with reasons by Comm....
Disputed questions of fact in loan agreements cannot be resolved in writ jurisdiction; such matters require civil adjudication based on evidence rather than legal interpretations alone.
The court emphasized the necessity for the Debt Recovery Appellate Tribunal to address critical issues regarding wrongful classification of a borrower's account as NPA and the invocation of bank guar....
possession notice issued under Section 13(4) of the Act, 2002 against which the petitioner has efficacious/statutory remedy of preferring an application under Section 17 of the said Act before the De....
Public sector banks must adhere to principles of fairness and non-arbitrariness in their dealings, as established under Article 14 of the Constitution.
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