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2026 DIGILAW 188 (TS)

Mohammed Yousuf Ali v. Sammaan Capital Limited

2026-01-29

GADI PRAVEEN KUMAR, MOUSHUMI BHATTACHARYA

body2026
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. (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 Agreement as 18% per annum which included the Internal Prime Lending Rate of Indiabulls (PLR) at the rate of 14.75% + 3.25% charged as margin. A copy of the Loan Agreement dated 25.04.2007 was later provided to the petitioner. (v) The respondent No.1 kept the EMI constant at Rs.26,511/- for more than three years i.e., until December, 2010. The petitioner did not question the respondent, being under the impression that the EMIs as well as the interest rates had been entered into the Loan Agreement as promised to the petitioner. (vi) The petitioner paid the EMIs till 2012 and sought for closure of loan account as being fully paid and the return of documents which were in possession of the respondent No.1 vide legal notice dated 14.10.2012. The petitioner then discovered that the respondent No.1 had increased the EMI from Rs.26,511/- to Rs.30,159/-. (vii) The petitioner continued to make payments till June, 2015 since the respondent No.1 refused to close the loan account. The petitioner paid Rs.25,11,890/- till June, 2015. (viii) The respondent No.1 issued a Demand Notice dated 23.03.2015 under the SARFAESI Act and a Possession Notice on 12.06.2015. (ix) The petitioner filed S.A.No.365 of 2015 (renumbered as S.A.No.601 of 2017) before the DRT under section 17 of the SARFAESI Act wherein the petitioner raised the ground of non- compliance with the Reserve Bank of India (RBI) Guidelines in charging interest to the loan account of the petitioner by the respondent No.1 as well as changing the tenure of the Agreement from the agreed 7 years to 12 years and later to more than 28 years. (x) The DRT disposed of the S.A. filed by the petitioner on 20.01.2016 by directing the respondent No.1 to re-calculate the account with interest @ 22.55% per annum with monthly rests, on the remaining outstanding amount, from the default date till the payment of the entire outstanding amount. (x) The DRT disposed of the S.A. filed by the petitioner on 20.01.2016 by directing the respondent No.1 to re-calculate the account with interest @ 22.55% per annum with monthly rests, on the remaining outstanding amount, from the default date till the payment of the entire outstanding amount. The petitioner filed W.P.No.7883 of 2016 aggrieved by the said order. (xi) On 21.04.2016, the High Court granted interim stay of the e-auction/public auction of the petitioner’s house. The interim orders continued till disposal of the Writ Petition. (xii) On 15.09.2022, the High Court set aside the order dated 20.01.2016 passed by the DRT and remanded the matter to the DRT for a fresh consideration of the issues raised by the petitioner including applicability of the RBI Guidelines. (xiii) The DRT dismissed the S.A. filed by the petitioner by the impugned order dated 10.09.2024. The Review Petition filed by the petitioner was dismissed on 26.12.2024. 5. The petitioner has challenged the impugned order on the ground that the DRT erroneously considered the documents filed by the respondent No.1 as those filed by the petitioner. 6. Learned Senior Counsel appearing for the petitioner assails the impugned order dated 10.09.2024 on the ground that the DRT failed to consider the issue of violation of the RBI Guidelines by the respondent No.1 despite the entire record of the proceedings being available to the DRT for complete adjudication of the matter. Senior Counsel submits that the DRT erred in holding that the respondent No.1 had not violated the RBI Guidelines since the intimations and notices of change of interest rates and loan tenure were filed by the petitioner himself. Senior Counsel further submits that the DRT failed to consider the fact of new (lower) rates of interests being offered to new customers and that the DRT also failed to adjudicate on whether financial institutions have the jurisdiction to change the rates of interest in violation of the RBI Guidelines and of the National Housing Board (NHB). 7. Learned counsel appearing for the respondent No.1/Samman Capital seeks to sustain the impugned order on the ground that the respondent No.1 usually follows a policy of floating rates of interest in respect of the amounts lent to the Borrowers. 7. Learned counsel appearing for the respondent No.1/Samman Capital seeks to sustain the impugned order on the ground that the respondent No.1 usually follows a policy of floating rates of interest in respect of the amounts lent to the Borrowers. Counsel submits that the petitioner had availed housing loan facility with a limit of Rs.15 lakhs against mortgage of the secured asset which was to be repaid in 144 equal monthly instalments for 12 years. Counsel submits that the petitioner’s loan account was declared as a Non-Performing Asset (NPA) by the respondent No.1 on account of the petitioner’s failure to repay the loan amount. The respondent No.1 was hence constrained to initiate proceedings under the SARFAESI Act including for possession for the secured asset under Rule 8(1) of The Security Interest (Enforcement) Rules, 2002. Counsel seeks to rely on the EMI Calculator available on the website of the respondent No.1 to show the total interest payable for the loan by applying fixed interest at the rate of 12%, 14.75% and 18% with a tenure of 7 years and 12 years, respectively. Counsel submits that an amount of Rs.35,28,309/- is outstanding from the petitioner as on 23.10.2025. 8. We have considered the submissions made on behalf of the parties. 9. The following facts are undisputed as may be evident from the material produced before this court. 10. The petitioner claims to be a tailor and an illiterate person. The respondent No.1/Sammaan Capital offered the petitioner a Home Equity Loan for an amount of Rs.15 lakhs (Rupees Fifteen Lakhs Only) on the promise that the interest rate would be fixed at 12% with a tenure of 84 months or seven years and took the petitioner’s signatures on blank papers. The original Loan Agreement dated 25.04.2007 was not provided to the petitioner contemporaneously. A copy of the Agreement was provided to the petitioner much later. The respondent No.1 informed the petitioner that the details including the interest rates and the tenure for the loan would be filled up in the Loan Agreement as promised. The Loan Agreement which forms part of the records specifically reflects the interest rate to be 18% per annum. 11. The respondent No.1 subsequently filled up the Loan Agreement with altered terms and conditions which were made known to the petitioner at a subsequent point of time. The Loan Agreement which forms part of the records specifically reflects the interest rate to be 18% per annum. 11. The respondent No.1 subsequently filled up the Loan Agreement with altered terms and conditions which were made known to the petitioner at a subsequent point of time. The changes made by the respondent No.1 to the Loan Agreement were as follows: (i) floating/adjustable rate of interest (instead of a fixed rate of interest) (ii) initial payable interest rate (pre – EMI interest rate) as 18% per annum (iii) increase of the tenure of the agreement to 144 months/12 years (instead of seven years as offered to the petitioner). 12. The respondent No.1 kept the EMI constant at Rs.26,511/- for more than three years i.e., till December, 2010. The petitioner paid the EMIs till 2012 until the EMI was increased from Rs.26,511/- to Rs.30,159/-. On coming to know of the increase in the rate of EMI in 2012, the petitioner sought to close the loan account and demanded the return of the documents which were in possession of the respondent No.1. The letter addressed by the petitioner to the respondent No.1 on 14.10.2012 seeking closure of the loan account and return of documents is part of the records. Since, the respondent No.1 threatened the petitioner with coercive action, the petitioner continued to make payments till June, 2015. The last payment was made on 09.06.2015. 13. The petitioner had paid Rs.25,11,890/- (Rs.27,76,500/- inclusive of charges and fees) by June, 2015. From an account statement provided by the respondent No.1 dated 04.07.2015, the petitioner discovered that out of Rs.25,11,890/- paid towards the loan over 8 years, the respondent No.1 had adjusted Rs.24,21,255/- towards interest and only Rs.90,634/- towards the principal amount. The material document shows that the remaining principal due by July, 2015 was Rs.14,09,366/-. Apart from the material document, Paragraph No.24 of the writ affidavit in WP No.7883 of 2016 filed by the petitioner also reflects the amounts paid by the petitioner in terms of the Loan Agreement, which are set out below: Loan Amount : Rs.15,00,000/- Amount repaid : Rs.25,11,890/- Amount adjusted towards principal : Rs.90,634/- Amount adjusted towards interest : Rs.24,21,255/- Principal Outstanding : Rs.14,09,366/- Balance payable/Future Installments : Rs.73,39,406/- Rate of Interest : 25.55% 14. It would be clear from a perusal of the account statement of the respondent No.1 that by July, 2015, the respondent No.1 was adjusting Rs.178.97/- towards the principal amount and Rs.29,980.03/- towards interest from the EMI of Rs.30,159/- paid by the petitioner. This was being done by increasing the interest rate from 18% to 25.55% and the tenure from 12 years to 341 months i.e., approximately 28 years and 5 months. 15. From a conjoint reading of the documents, it would also be clear that since the inception of repayment, i.e. April, 2007 up to January, 2011, the interest rates and loan tenure were changed almost eight times until January, 2011 and 13 times till November, 2014, while the EMI remained constant. The respondent No.1 failed to produce any documents before the Debts Recovery Tribunal or in the Writ Petition filed by the petitioner to show that the respondent No.1 kept the petitioner informed of the changes in the interest rates and the tenure of the loan at the material points of time. 16. It is also undisputed that out of the loan sanction of Rs.15 lakhs, only an amount of Rs.14,49,772/- was disbursed by the respondent No.1 to the petitioner and the balance of Rs.50,228/- was recovered upfront towards various charges. The material document, which is part of records, shows that after paying an amount of Rs.25,11,890/- (Rs.27,76,500/- if charges and fees are included), the current principal outstanding is still being shown as Rs.14,09,366/-. 17. Thus, the petitioner’s contention that the petitioner was kept in the dark with respect to the frequent changes in the interest rate merits consideration. The petitioner’s argument before the DRT of violation of the RBI Guidelines and the National Housing Board (‘NHB’) Guidelines should have been given due weightage particularly in light of the High Court allowing W.P.No.7883 of 2016 on 15.09.2022 by setting aside the order of the DRT dated 20.01.2016 and directing the DRT to consider the issues afresh including that of the RBI Guidelines. 18. In the impugned order dated 10.09.2024, the DRT erroneously concluded that there was no violation of the RBI Guidelines. 18. In the impugned order dated 10.09.2024, the DRT erroneously concluded that there was no violation of the RBI Guidelines. The conclusion was based on the erroneous assumption that the petitioner himself had filed the photo copies of letters addressed by the respondent to the petitioner intimating him about the changes in the interest rate and EMI amounts from May 2007 to August 2013 whereas in reality the documents had actually been filed by the respondent No.1 as part of its Additional Counter Affidavit dated 26.02.2018. The Tribunal should have noted that the respondent No.1 had failed to provide any proof of service or evidence that the letters had indeed been sent to and received by the petitioner. 19. Further, in the impugned order, the DRT found that the petitioner had failed to particularize the violation of the RBI Guidelines. However, the material papers indicate the specific violations. These are: (i) RBI circular dated 28.09.2006 issuing Guidelines on Fair Practices Code for Non-Banking Financial Companies (NBFCs) issued in exercise of powers conferred under section 45 L of The Reserve Bank of India Act, 1934. The Circular provides in Clause (iii)(a) that NBFCs should give notice to the borrower of any change in the terms and conditions, including disbursement schedule, interest rates, service charges, prepayment charges etc. (ii) RBI circular dated 02.01.2009 on directions to NBFCs for the purpose of regulating the credit system of the country. Clause (a) provides that the Board of each NBFC shall adopt an interest rate model by taking into account relevant factors such as cost of funds, margin and risk premium etc. and determine the rate of interest to be charged for loans and advances. Further, the rationale for charging different rate of interest to different categories of borrowers shall be disclosed to the borrower in the application form and communicated explicitly in the sanction letter. Clause (c) provides that the rate of interest should be annualized rates so that the borrower is aware of the exact rates which would be charged to the account. (iii) RBI circular dated 02.07.2012-Master Circular on Fair Practices Code. Clause 2(A)(iii)(a) of the circular provides that the NBFCs should give notice to the borrower in the vernacular language or in a language understood by the borrower of any change in the terms and conditions including disbursement schedule, interest rates, service charges and prepayment charges etc. (iii) RBI circular dated 02.07.2012-Master Circular on Fair Practices Code. Clause 2(A)(iii)(a) of the circular provides that the NBFCs should give notice to the borrower in the vernacular language or in a language understood by the borrower of any change in the terms and conditions including disbursement schedule, interest rates, service charges and prepayment charges etc. (iv) RBI Circular on Master Direction - Reserve Bank of India (Interest Rate on Advances) Directions, 2016 dated 03.03.2016. Clause 8(b)(i) provides that the credit risk premium charged to an existing borrower shall not be increased except on account of deterioration in the credit risk profile of the customer or change in tenor premium. (v) NHB Guidelines on Fair Practices Code for HFCs (Housing Finance Companies) dated 05.09.2006. Clause 3.5 provides that HFCs shall inform the customer whenever there is a change in the interest rates on their products. (vi) NHB Master Circular to all Housing Finance Corporations dated 11.10.2010 revising the Guidelines on Fair Practices Code for HFCs. Clause 4.1(iv)(b) of the Guidelines provides that the HFCs should give notice to the borrower of any change in the terms and conditions including disbursement schedule, interest rates, service charges, prepayment charges or other applicable fee/charges etc. 20. The above paragraphs would make it evident that there are several Circulars/Guidelines of the RBI and NHB which are instructive of the fair practices which are to be followed by a NBFC like the respondent No.1. 21. In essence, the Guidelines stipulate that the borrower must be kept informed of any changes made by the lender to the loan agreement initially agreed upon and executed between the parties. The purpose is that the borrower should be kept informed and made aware of the financial implications and obligations associated with the loan transaction. The RBI Guidelines ensure transparency and provide an opportunity to the Borrower to transfer the loan to another Lender, if the Borrower is not satisfied with the changes made to the Loan Agreement. 22. The impugned order dated 10.09.2024 passed by the DRT is required to be placed in context of the undisputed facts. W.P.No.7883 of 2016 filed by the petitioner was allowed by the High Court on 15.09.2022 by directing the DRT to consider the issues raised by the petitioner afresh by giving an opportunity of hearing to the parties. 23. 22. The impugned order dated 10.09.2024 passed by the DRT is required to be placed in context of the undisputed facts. W.P.No.7883 of 2016 filed by the petitioner was allowed by the High Court on 15.09.2022 by directing the DRT to consider the issues raised by the petitioner afresh by giving an opportunity of hearing to the parties. 23. Pursuant to the said order, the petitioner produced the entire set of documents forming part of the record filed by the petitioner and the respondents in the Writ Petition, before the DRT accompanied by an application i.e., I.A.No.1929 of 2023 in S.A.No.601 of 2017/Permission Petition which was allowed by the DRT by an order dated 05.10.2023. The Index from the Permission Petition makes it clear that the documents filed by the petitioner at pages 291-304 were part of the Additional Counter Affidavit filed by the respondent No.1 in W.P.M.P.No.10029 of 2016 in W.P.No.7883 of 2016 on 26.02.2018. 24. However, the DRT records at paragraph No.12 of the impugned order dated 10.09.2024 that the applicant (the petitioner) filed photocopies of the letters addressed to the petitioner by the respondent No.1 giving intimation about the changes in the interest rate and the EMI amounts from May, 2007 to August, 2013. Hence, the DRT mistakenly assumed that the letters of the respondent No.1 had been duly communicated to the petitioner since the petitioner himself had filed these documents by way of the Permission Petition. The DRT consequently held that the petitioner had received these documents and was aware of the changes in the terms of the loan. In reality, the petitioner had not been informed of these changes and the alleged documents/letters referred to by the DRT in paragraph No.12 of the impugned order dated 10.09.2024 were filed by the respondent No.1 at a belated stage. The letters of intimation were in any event denied by the petitioner. 25. The error apparent from the record, i.e., that the petitioner was aware of the changes in the interest rates at all relevant points of time since the relevant letters were filed by the petitioner himself, goes to the root of the matter. The letters of intimation were in any event denied by the petitioner. 25. The error apparent from the record, i.e., that the petitioner was aware of the changes in the interest rates at all relevant points of time since the relevant letters were filed by the petitioner himself, goes to the root of the matter. The error strikes at the foundation of the petitioner’s contention that the respondent No.1 had unilaterally changed the interest rates and the loan tenure without informing the petitioner and thus the petitioner had been deprived of his choice of whether to terminate the loan agreement and shift to another lender or not. The error on the part of the DRT also led to the consequential finding that the respondent No.1 did not violate any of the RBI Circulars or NHB Guidelines which form the core of the dispute in SA. No.601 of 2017 filed by the petitioner. 26. The petitioner filed Review IA No.1229 of 2024 under section 22(2)(e) of The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (‘1993 Act’) before the DRT to rectify the error apparent on the face of the record by requesting the DRT to review its order dated 10.09.2024. The DRT rejected the Review Application by passing the order dated 26.12.2024. 27. The impugned order failed to take into consideration that changes in the interest rates and the new/lower rates of interest provided to new customers were facts unknown to the petitioner resulting in violation of the relevant RBI and NHB Guidelines which are binding on the respondent No.1. The DRT thus failed to exercise appropriate discretion in considering the petitioner’s undisputed lack of agency by reason of his lack of knowledge in choosing to decide the future course of action as to whether to continue to remain being bound to the respondent No.1 or to seek closure of his transactional relationship with the respondent No.1. The DRT also failed to consider that while Financial Institutions have the discretion to fix the rate of interest, they remain bound by the Guidelines issued by the RBI and NHB: Sardar Associates Vs. Punjab & Sind Bank , (2009) 8 SCC 257 . The RBI Guidelines have statutory force and are mandatory and binding in nature: Central Bank of India Vs. Ravindra , (2002) 1 SCC 367 . 28. Punjab & Sind Bank , (2009) 8 SCC 257 . The RBI Guidelines have statutory force and are mandatory and binding in nature: Central Bank of India Vs. Ravindra , (2002) 1 SCC 367 . 28. As stated above, the palpable error apparent on the face of the record is that the fact that the petitioner had chosen to file the documents of intimation, coloured the DRT’s view of the entire proceedings and led to a conclusion which was erroneous both on facts as well as in law. 29. It is significant that even in the present proceedings before this Court the argument extended by the respondent No.1 is that the respondent No.1 was entitled to apply a routine rate of interest for the amount advanced to the petitioner. The petitioner’s argument has always been that the relevant Guidelines and Directions governing the basis of calculating the interest rate should be complied with though Financial Institutions have the discretion to determine the rate of interest. The respondent No.1, while exercising its discretion to determine the interest rate, has failed to exercise the discretion as required by law in terms of the relevant Guidelines and Directions of the RBI and NHB. The Written Submissions filed by the petitioner before the DRT specifically outlines the violations of the RBI and NHB Guidelines committed by the respondent No.1. 30. It should also be clarified that section 21A of The Banking Regulation Act, 1949 (‘1949 Act’) which imposes an embargo on Courts in respect of scrutiny of the interest rates charged by Banking Companies, is not applicable to the present case. The petitioner has not challenged the interest rates imposed by the respondent No.1, but seeks intervention of the Writ Court on the DRT’s failure to address the violations of the RBI and NHB Guidelines committed by the respondent No.1. Further, the 1949 Act does not directly apply to NBFCs including the respondent No.1 which are primarily regulated by the RBI under the 1934 Act. Chapter III B of the 1934 Act empowers the RBI to control and supervise NBFCs including setting up prudential norms and directions for their operations. Further, the 1949 Act does not directly apply to NBFCs including the respondent No.1 which are primarily regulated by the RBI under the 1934 Act. Chapter III B of the 1934 Act empowers the RBI to control and supervise NBFCs including setting up prudential norms and directions for their operations. In this context, it should also relevant to mention that the DRT noted in the order dated 10.09.2024 in paragraph No.16 that the RBI Guidelines provide that the rate of interest to be charged for a loan should invariably be made known to the Borrower in the loan agreement itself besides keeping the Borrower informed of the change in interest rates if any, from time to time. 31. Having reached the aforesaid conclusions, the DRT should automatically have held that the respondent No.1 violated the RBI Guidelines in failing to keep the petitioner informed of the changes in interest rates and loan tenure. The conclusion of the DRT is all the more specious since the respondent No.1 failed to discharge its obligation of proving that the intimations were sent to and received by the petitioner with regard to the changes in the interest rates and the tenure of the loan. 32. From a perusal of the account statement it would be clear that by July, 2015, the respondent No.1 was adjusting Rs.178.97/- towards principal and Rs.29,980.03/- towards interest from the EMI of Rs.30,159/- being paid by the petitioner. This was being done by increasing the interest rate from 18% to 25.55% and the tenure from 12 years to 341 months i.e., approximately 28 years and 5 months without the petitioner’s knowledge and without any information furnished to the petitioner contrary to the mandatory guidelines issued by the RBI and the NHB. 33. Even if we disregard the opposing contentions made on behalf of the petitioner and the respondent No.1/Sammaan Capital, the very fact that the respondent No.1 was unable to produce concrete evidence of the service of notices/intimations given to the petitioner of the interest rate and the tenure of the Agreement being changed eight times from April 2007 – January 2011 and 13 times till November, 2014 thereby altering the terms/interest rate from 18% to 25.55% would put the obligation directly on the respondent No.1 to dislodge the allegation of the violation of the RBI Guidelines. 34. 34. We deem it important to note that the facts in the present case raise important concerns of lending entities taking undue advantage of illiterate/semi-illiterate customers. Although, the loan agreement binds the parties by way of mutual contractual obligations, it is often found that the original agreement is tweaked or transformed beyond recognition without any knowledge or consent of the borrower. By the time the borrower is made aware of the changes, it is too late for the borrower to take an informed decision to seek closure of their account and move to another lender. Further, the borrower also finds himself/herself to be in a financial stranglehold without the necessary resources to move away from an exploitative lender. In several cases, the borrower fails to read the fine print or the final version of the loan agreement and is taken by surprise when called upon to make unusually large repayments. 35. At the cost of repetition, the respondent No.1 changed the interest rate eight times from April, 2007 until January, 2011 and more than thirteen times till November, 2014. The tenure of the Agreement was also changed from twelve years to twenty eight years. 36. Levy of Interest, though contractual, must conform to the tests of reasonableness and fairness. Interest is intended to compensate the lender for the use of money and not for operating as a mechanism to suffocate the borrower through excessive compounding. 37. The tabulated calculation given above would show the amount payable by the petitioner in terms of the loan Agreement dated 25.04.2007 is Rs.36,70,098/- which is also admitted by the respondent No.1 in the Memo dated 06.10.2025 placed before this Court. Since the petitioner has already paid an amount of Rs.25,11,890/-, the maximum outstanding amount should be Rs.8,93,598/- and not Rs.35 lakhs as alleged by the respondent No.1 in Memo dated 23.10.2025 placed before this Court. 38. In Surya Dev Rai Vs. Ram Chander Rai , (2003) 6 SCC 675 , the Supreme Court held that the supervisory jurisdiction of a High Court empowers the High Court not only to quash or set aside the impugned proceedings, judgment or order but also to make such directions as the facts and circumstances of the case would warrant. Shalini Shyam Shetty Vs. Ram Chander Rai , (2003) 6 SCC 675 , the Supreme Court held that the supervisory jurisdiction of a High Court empowers the High Court not only to quash or set aside the impugned proceedings, judgment or order but also to make such directions as the facts and circumstances of the case would warrant. Shalini Shyam Shetty Vs. Rajendra Shankar Patil , (2010) 8 SCC 329 relied on Surya Dev Rai (supra) and reinforced that a High Court under Article 227 of the Constitution of India can, apart from annulling the proceedings also substitute the impugned order with the order which the inferior Court ought to have made. In the present case, the impugned orders passed by the DRT merit interference. 39. The cases relied on behalf of the respondent No.1/Sammaan Capital on the maintainability of this CRP and on the issue of the CRP being barred by limitation are required to be placed in context. 40. K. Sreedhar v. Raus Constructions Private Ltd. , (2023) 11 SCC 169 would be applicable where a party approaches the High Court challenging an order passed by the DRT under section 17 of the SARFAESI Act, 2002 on merits without first filing for review of the DRT order under section 22 (2) (e) of The Recovery of Debts and Bankruptcy Act 1993. The petitioner herein had duly filed a review application before the DRT for rectifying the final order dated 10.09.2024 which culminated in the rejection order dated 26.12.2024. United Bank of India v. Satyawati Tondon , (2010) 8 SCC 110 is factually distinguishable since the petitioner first approached the DRT under section 17 of the SARFAESI Act, 2002. The petitioner in fact filed an S.A. under section 17 of the said Act challenging the notices issued under sections 13 (2) and (4) of the SARFAESI Act, 2002. 41. Jai Singh and others v. Municipal Corporation of Delhi , (2010) 9 SCC 385 is also not applicable since the petitioner has not challenged the impugned orders on merits but on the ground that the DRT failed to exercise jurisdiction under section 22 (2) (e) of the 1993 Act. 42. Standard Chartered Bank v. MSTC Limited , (2020) 13 SCC 618 is relevant for a review application being filed beyond the prescribed period of limitation. 42. Standard Chartered Bank v. MSTC Limited , (2020) 13 SCC 618 is relevant for a review application being filed beyond the prescribed period of limitation. In the present case, the DRT passed final orders in the petitioner’s S.A. on 10.09.2024 and the petitioner filed the review application within 30 days on 07.10.2024. A perusal of the inward stamp dated 07.10.2024 on the review application (IR No.1229 of 2024) would clarify the aforesaid fact. Chairman, State Bank of India v. MJ James , (2022) 2 SCC 301 and U.P. Jal Nigam and another v. Jaswant Singh and another , (2006) 11 SCC 464 relied upon by the respondent for the proposition that payment of EMIs by the petitioner without protest would amount to acquiescence and the petitioner cannot challenge the interest rates and tenure period would not be relevant as the doctrine of acquiescence would only apply where a party having a right, stands by and sees another party proceeding to deal with the disputed subject matter in a manner which is inconsistent with the right of the first party. 43. Acquiescence also requires the party concerned having knowledge and being aware of the violation but failing to take any steps with regard to the same. The specific case of the petitioner in the present case is that the respondent No.1 changed the interest rates and the tenure period without the notice or knowledge of the petitioner. 44. The fact of the current principal outstanding being reflected as Rs.14,09,366/- despite the petitioner having made payment of an amount, of Rs.25,11,890/- (Rs.27 lakhs with charges and fees included) and after the respondent No.1 had recovered this amount, would be inconsistent with the respondent No.1 now seeking to recover Rs.1,00,07,875/- from the petitioner. The respondent No.1 has arrived at the outstanding amount by extending the loan tenure period from 12 years to 28 years. The amounts sought to be recovered from the petitioner and the tenure period would result in the petitioner forever remaining in debt to the respondent No.1. 45. It should also be mentioned that the parties were given several opportunities to settle the matter. However, the respondent stuck to Rs.35 Lakhs as the amount outstanding from the petitioner. The amount of Rs.35 Lakhs was based on the altered terms of the original loan agreement including the interest rate and the tenure of the loan. 46. 45. It should also be mentioned that the parties were given several opportunities to settle the matter. However, the respondent stuck to Rs.35 Lakhs as the amount outstanding from the petitioner. The amount of Rs.35 Lakhs was based on the altered terms of the original loan agreement including the interest rate and the tenure of the loan. 46. The High Court would thus be justified in exercising its jurisdiction under Article 227 of the Constitution of India. 47. The above facts and reasons constrain us to hold that the DRT committed an error in refusing the relief to the petitioner by way of the impugned order dated 10.09.2024 and holding that there was no violation of the RBI Guidelines therein. The dismissal of the petitioner’s Review Application on 26.12.2024 also merits interference in view of the error apparent on the face of the record i.e., the DRT treating the documents filed by the petitioner as being documents emanating from the petitioner as opposed to the documents of the respondent No.1. 48. We have no doubt that the High Court possesses supervisory jurisdiction to correct the errors in judgments rendered by district Courts/Courts lower in the hierarchy under Article 227 of the Constitution of India. We thus, deem it fit to set aside the orders dated 10.09.2024 and 26.12.2024 passed by the DRT , inter alia, for failing to notice the violation of the RBI Guidelines. 49. CRP.No.74 of 2025, along with all connected applications, is allowed in terms of the above.