DR TRISHALA KRISHNAKUMAR DHEMRE vs KOTAK MAHINDRA BANK LIMITED on 31 January 2020

J U D G M E N T

(Delivered on this 31 st day of January, 2020)

This is an application under section 5 of the Limitation Act for condonation of delay of 119 days in filing the securitization application. 02.00 APPLICATION AVERMENTS: The applicants are tenant and preferred an application u/s 17(1) of SARFAESI Act challenging the actions initiated by respondent no. 1 in pursuance to the order dated 01.10.2018 passed by the learned District Magistrate, Nagpur in relation to taking over of physical possession of the property i.e. Tenament No. A/10 having built up area of 60.00 sq. mtrs situated and standing on land of Kh. No. 157/4, 57/1 and 58/2 of Vastu Shilpa Nagar, Mouza – Borgaon, P.H. No. 8, Katol Road, Nagpur. The applicants are neither the borrowers/mortgagor nor guarantors in the alleged loan transaction between the respondent no. 1 with the respondent nos. 2 and 3. The applicants till 13.02.2019 were not aware about the alleged credit facilities availed by respondent nos. 2 and 3 from Citi Financial Consumer Finance India Ltd (hereinafter referred to as CCFIL), which was subsequently assigned to respondent no. 1. It is only when the learned Executive Magistrate, Nagpur City approached the above property for affixture of notice dated 11.02.2019, the applicants came to know ab out the securitization action initiated by respondent no. 1. The applicants acquired above said blocks in pursuance to agreement of lease and license dated 20.03.2017 with monthly rent of Rs. 12,000/ - for the dtg/- period of 11 months and subsequently it was ext ended orally in pursuance to section 107 of the Transfer of Property Act upon the same terms and conditions and the applicants are utilizing said premise for their Kindergarten i.e. Colour Kidz Pre -School. Despite having knowledge of the possession of the above said property with the applicants being the tenants, the respondent no. 1 suppressed this material fact from the learned District Magistrate, Nagpur. As prescribed u/s 17(1) of SARFAESI Act, the limitation is 45 days i.e. on or before 15.11.2018. The applicants came to know about the passing of impugned order on 13.02.2019 when the learned Executive Magistrate, Nagpur city affixed the communication dated 11.02.2019 upon the above said property. Thereafter, applicants immediately approached the office of District Magistrate, Nagpur and obtained the copies of case papers. Therefore, if the date of knowledge would be considered, there is no delay in preferring the application u/s 17 of SARFAESI Act for challenging the alleged action of respondent no. 1. However, if the date of order would be considered, it appears that 119 days delay has been occurring in preferring the application u/s 17 of SARFAESI Act. The delay caused was not deliberate or intentional. However, it was caused due to unavoidable circumstances and also due to having no knowledge of the actions undertaken by respondent no. 1 under SARFAESI Act and the order passed by the learned District Magistrate. The applicants explained the delay properly in the present application and therefore the delay of 119 days caused is liable to be condoned. The applicant has a very good case on merits. In view of the above circumstances, dtg/- the applicants prayed for condonation of delay of 119 days in filing securitization application. 03.00 REPLY AVERMENTS : Respondent no. 1 bank filed common reply at Exh. 7 and resisted the application filed by applicants and stated that the applicant is not the bonafide tenant/lessee and that with an ulterior motive, forged and fabricated document is prepared in hurried manner to obstruct the lawful action taken by respondent no. 1 bank and that the mortgaged property is of residential nature while running of play school is a commercial activity. Hence entire nature of lease is barred by law and that no documentary evidence was filed with the M.A. to show that alleged school is running in the mortgaged property. The applicant is acting hand in glove with the borrowers i.e. respondent nos. 2 and 3. The borrowers paid the last installment on 07.05.2008 and defaulted subsequently. R 1 bank being the „Financial Institution‟ under section 2(h) of RDB Act 1993 and registered as „Bank‟ under section 2(c)(i) of SARFAESI Act read with section 2(d) of SARFAESI Act, issued 13(2) notice to borrower and co-borrower through RPAD on 23.11.2013 and pasted the same on the mortgaged premises of the borrower. Said demand notice was also published in the daily newspaper. On 25.06.2014, non applicant bank had taken symbolic possession by pasting notice on the mortgaged property. On 30.06.2014, symbolic possession notice was published in two language newspapers of Nagpur. On 01.10.2018, DM passed an order for taking physical possession under section 14 of SARFAESI Act. On 11.02.2019, 7 days conciliation notice was issued by Tahsildar and same was affixed on the mortgaged dtg/- premises and also sent to the borrower through RPAD. On 30.04.2019, Tahsildar Nagpur city passed an order to take physical possession on 14.05.2019 and on 01.05.2019, present M.A. is filed by applicants with an afterthought and imaginary grounds with created and forged documents. There is huge delay of above 100 days in filing the application under section 17 of SARFAESI Act and this huge delay is not explained. The only reason for delay of around 115 days as mentioned in the application in para 5 is that applicants were not aware of the action taken by non applicant bank and they came to the knowledge about the District Magistrate‟s order when the Tahsildar issued notice dated 11.02.2019. Non applicant bank infact informed the public at large by publishing the demand notice in the year 2013 and then by publishing the symbolic possession notice dated 25.06.2016 which was also affixed on the mortgaged property. Applicant came up with false and frivolous pleas for condonation of delay in filing the appeal to safeguard the interest of the borrower for unlawful gains. It is specifically pleaded that there is no prima facie case as the owner of the property is respondent no. 2 herein and the owner has not executed any agreement and the alleged a greement of lease and license dated 20.03.2017 is executed by respondent no. 3 who is not the owner of the property. The alleged agreement is prepared on the stamp paper of Rs. 100/- whereas any agreement has to be executed on the stamp paper of Rs. 500/-. The alleged agreement bears the recital that the leased property should be used only for residential purpose. However, applicant claimed that she is running a play school in the mortgaged property. Rent receipts do not dtg/- bear the signatures of the owner of the property and the alleged rent is paid by some Happy Home Services which is neither the landlord nor the lessee but the witness to the alleged agreement. It is evident that bogus and fabricated documents are prepared and filed before this Tribunal. In view of the above facts and circumstances, the relief sought in the application for condonation of delay and relief sought in I.A. no. 325/19 is not at all available to the applicant s. Hence the present application is liable to be rejected summarily with heavy costs and non applicant bank prays accordingly. 04.00 Heard arguments. 05.00 Now the points for determination are:-

(i) Whether the delay of 119 days in filing the S.A. can be condoned and whether any worthwhile purpose can be served in the main case in the event of condonation of delay?

(ii) To what reliefs? 06.00 Point no.(i) The Learned Advocate for the applicants contended that the Respondent nos.2 and 3 availed loan from the City Financial Consumer Finance India Ltd (CCFIL for short) by mortgaging RCC constructed tenement No.A/10 having built up area of 60 Sq. Mtr in P.H. No.8 on Katol Road, Nagpur (hereinafter to be referred as „disputed property‟), in which the applicants are said to be running a school by taking it on lease for 11 months o n 20.03.2017 and it is being extended „orally‟ and that they came to know about District Magistrate‟s order dated 01.10.2018 on 13.2.2019. As a result, 119 days delay happened in challenging the same under the SARFAESI Act. Incidentally, he also contende d that dtg/- the original creditor i.e. CCFIL assigned the loan to Kotak Mahindra Bank Ltd (R1 herein) and that both assignee and assignor are Non Banking Financial Corporations (hereinafter to be referred as „NBFC‟) and hence they cannot initiate SARFAESI action and that the said contention was upheld in the concerned DRT, DRAT and also by the Hon‟ble Bombay High Court in a case between Kotak Mahindra Bank Ltd –Vs- Trupti Sanjay Mehta and others AIR 2016 BOM 123. Respondent bank‟s Advocate submitted that the H on‟ble Supreme Court stayed the operation of said case vide the Hon‟ble Supreme Court‟s order dated 22.09.2015 in Special Leave to Appeal (C) No. 5752/2014 with SLP (C) No.20885/2015. Even according to both sides, that question is still pending before the Hon‟ble Supreme Court. 06.01 Learned Advocate for the Respondent bank further contended that one Smt. Lata Puri (R2 herein) is the owner and title holder of the disputed property but one Mr. Bhushan Puri (R3 herein) executed the lease deed in favour of the applicants, that too for non- commercial purpose. He submitted that though this case is filed for condonation of delay of 119 days, incidentally and consequentially, the legality or otherwise of the alleged tenancy of the applicants has necessarily to be considered at this stage itself to avoid multifarious proceedings. He categorically contended that the applicants are not having valid tenancy and that they cannot hold possession of the disputed property in view of the Hon‟ble Supreme Court‟s ruling in Bajrang Shyamsunder Agarwal –Vs- Central Bank of India and another dated 11.9.2019 which ruling was submitted by him. So,

dtg/- incidentally and consequentially, the legality or otherwise of the tenancy of the applicants need to be examined in this case to avoid multifarious proceedings. Even according to the applicants, they entered into the lease on 20.03.2017 with a monthly rent of Rs.12,000/- for 11 months and it was subsequently extended orally in pursuance of Section 107 of the Transfer of Property Act. As applicants are also contending that they are continuing the tenancy even after the agreed period of 11 months, their nature of tenancy also has to be incidentally considered in the present case to avoid multiplicity of proceedings. 06.02 The decisions rendered by the Hon‟ble Apex Court with regard to the tenancy and its legality are to be necessarily considered in the present case and they are as follows: - As per Section 107 Transfer of Property Act (hereinafter to be referred as „TP Act‟) “a lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Where a lease of immovable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee: Provided that the State Government may, from time to time, by notification in the Official Gazette direct that lease of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such dtg/- leases, may be made by unregistered instrument or by oral agreement without delivery of possession. As per Section 111 of TP Act, A Lease of immovable property determines- (a) by efflux of the time limited thereby;

(b) where such time is limited conditionally on th e happening of some event-by the happening of such event;

(c) where the interest of the lessor in the property terminates on, or his power to dispose of the same extends only to, the happening of any event-by the happening of such event; (d) in case the interest of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right; (e) by express surrender; that is to say, in case the lessee yields up his interest under the lease, to the lessor by mutual agreement between them; (f) by implied surrender;

(g) by forfeiture; that is to say, -(1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may re-enter; or

In case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; or dtg/- the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such event; and in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease; (h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other. It is necessary for both parties to examine the 3 cases covering this field and were rendered by the Hon‟ble Supreme Court of India. They are mentioned hereunder in chronological order: -

Harshad Govardhan Sondagar –Vs- International Asset Reconstruction Co. Ltd and others dated 3.4.2014 – (2004) 6 SCC 1 [hereinafter to be referred as „Harshad Govardhan case‟]

Vishal N. Kalsaria –Vs. Bank of India and others dated 20.01.2016 – (2014) 7 Supreme 601 [hereinafter to be referred as „Vishal Kalsaria case‟]; and,

Bajrang Shyamsunder Agarwal –Vs- Central Bank of India and Another dated 11.09.2019 – Crl. Appeal 1371/19 in SLP (Crl) 9590/15 [hereinafter to be referred as „Bajrang Shyamsunder case‟) 6.03

Specific provision of the Act applicable to the present case and to be examined by both parties:- Section of the Maharashtra Rent Control Act, which reads as follows:- dtg/- “(1) Notwithstanding anything contained in this Act or any other law for the time being in force, any agreement for leave and licence or letting of any premises, entered into between the landlord and the tenant or the licensee, as the case may be, after the commencement of this Act, shall be in writing and shall be registered under the Registration Act, 1908.

The responsibility of getting such agreement registered shall be on the landlord and in the absence of the written registered agreement, the contention of the tenant about the terms and conditions subject to which a premises have been given to him by the landlord to leave and licence or have been let to him, shall p revail, unless proved otherwise.

Any landlord who contravenes the provisions of this section shall, on conviction be punished with imprisonment which may extend to three months or with fine not exceeding rupees five thousand or with both.” 07.00

In view of rival contentions and in the light of Section 55 of the Rent Control Act and in light of the above 3 rulings rendered by the Hon‟ble Apex Court, the issue has to be thrashed out. The latest ruling in this field is of Bajrang Shyamsunder‟s case. It is to be noted that though Bajrang Shyamsunder‟s case was decided on 11.9.2019, it had not over-ruled earlier decisions of Harshad Govardhan and Vishal Kalsaria and hence whether applicant come under the purview of Bajrang Shyamsunder‟s case, has to be considered, which was submitted and relied on by the Advocate representing the Financial Institution. Admittedly, the earlier two dtg/- judgements were rendered by Two Judges Bench and Bajrang Shyamsunder‟s case was rendered by Three Judges bench besides being latest. Anyhow, in view of the rival pleadings and contentions made by the contesting parties, it is necessary to consider the nature of the alleged tenancy and if said tenancy is found to be valid under the Rent Control Act, then whether the applicant s have to be considered as „tenant in sufferance‟ or not has to be considered. 08.00

It is undisputed legal proposition that under the TP Act, if the lease is for more than One Year, it should be registered. Similarly, U/s 55 of the Maharashtra Rent Control Act, if the lease is for more than one year, it shall be registered and the responsibility of getting such agreement registered shall be on the landlord and if the landlord contravenes this section, the landlord be punished with imprisonment of three months or with fine not exceeding Rs.5000/- or with both. 08.01

So, in the State of Maharashtra, in order to protect the rights of tenants and landlords, the registration of the lease deed was made compulsory if the lease exceeds „one year‟. In the present case, the applicants are contending that the applicants are in possession of the disputed premises for more than one year. So, admittedly, the statutory requirement U/s.55 of the Rent Control Act was not complied in the present case. In view of this lacuna, the applicant had a weak case. 09.00

Whether the rulings governing both parties in this regard will be of any help to the applicants is to be considered in the dtg/- order of chronology. For that purpose, I would like to reproduce the head notes mentioned in each of the 3 cases as under:- “Harshad Govardhan’s case:- A. Property law-Transfer of Property Act, 1882, Ss.7, 8 and 48 – Property – Essence of – Nemo dat quod not habet – Transactional exigibility i.e. binding effect of prior property rights over property rights of subsequent transferee(s) irrespective of notice or knowledge of prior property rights on part of subsequent transferee(s) – Constitution of India, Art.300-A. B. Property Law – Transfer of Property Act, 1882 –Ss.105, 108(c), 109, 111, 58 and 7, 8 and 48 – Lease – Nature of, as property and its protection under Art.300-A of Constitution – Nemo dat quod non habet – Transactional exigibility of lease i.e. priority of lessee’s rights over those of subsequent mortgage of lessor irrespective of notice or knowledge of prior lease on part of subsequent mortgage. C. Debt, Financial and Monetary Laws – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Ss. 13, 14, 34, 35 and 37 – Right of lessee of borrower in possession of secured asset, to retain possession thereof, upon initiation of action by secured creditor to obtain possession of such asset – Need for proper registered lease deed to retain possession beyond one year from date of commencement of the lease – Power of secured creditor or dtg/- Chief Metropolitan Magistrate (CMM)/District Magistrate (DM) to take possession of secured asset from such lessee and hand over the same to secured creditor under S.14 for possession by secured creditor – Extent to which SARFAESI Act overrides Transfer of Property Act, 1882 (TPA) vide S.35 of SARFAESI Act – Duties of secured creditor and CMM/DM in such cases – Remedy of lessee concerned in case of dispossession.

- Lease granted by borrower/Lessees, classified into three classes: Class(1) Leases created prior to mortgage which created the secured asset; Class(2) Leases created after creation of the mortgage, vide S.65-A TPA but prior to receipt of S.13(2) SARFAESI Act notice by borrower; and Class(3) Leases created after creation of the mortgage, vide S.65-A TPA (Transfer of Property Act) but after receipt of S.13(2) SARFAESI Act notice by borrower – Detailed framework of law laid down on the above issues.

- There is no remedy available to lessee of borrower under S.17 of 2002 Act before DRT, in case of dispossession by secured creditor or CMM/DM – Remedy of such lessee against decision of CMM/DM under S.14 of 2002 Act handing over possession to secured creditor lies under Arts.226 and 227 of Constitution. D. Property Law – Transfer of Property Act, 1882 –Ss.65-A, 105, 109 and 7, 8 & 48 – Creation of lease by mortgagor after mortgage has been entered into – Binding effect of mortgagee –

dtg/- Statutory exception to nemo dat quod non habet principle contained in S.65-A TPA (Transfer of Property Act)– Scheme of S.65-A TPA (Transfer of Property Act) and its limits, explained – Overriding effect of S.13(13), SARFAESI Act, 2002 over S.65 - A TPA(Transfer of Property Act) once S.13(2), SARFAESI Act, 2002 notice has been received by mortgagor, vide S.35, SARFAESI Act, 2002 – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Ss. 13(13), (2) and 35. E. Property Law – Transfer of Property Act, 1882 – Ss105, 108(c), 109 & 111 and Ss. 7, 8 & 48 – Lawful possession of premises during subsistence of valid lease, held, is that of lessee and not lessor – Without determination of a valid lease, possession of lessee is lawful and such lawful possession of a lessee has to be protected by all courts and tribunals – Hence, during subsistence of a valid lease which is prior in time, subsequent mortgage i.e. secured creditor cannot take over possession of secured asset in possession of such lessee until lawful possession of the lessee gets determined – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Ss.13(4) and 14 – Words and Phrases – “Lawful possession” F. Property Law – Transfer of Property Act, 1882 – Ss. 111, 109, 65-A and 105 – Leases created prior to a mortgage and during subsistence of mortgage granted by lessor – Termination of –

dtg/- Class(1): lease created prior to grant of mortgage by lessor, or, Class(2): lease created by mortgagor during subsistence of mortgage under S.65-A TPA (Transfer of Property Act), but prior to receipt of S.13(2), SARFAESI Act, 2002 notice – Termination of either class of lease above i.e. Class(1) or Class(2) lease, held, can only be done as per modes provided in S.111 TPA (Transfer of Property Act)– S.13, SARFAESI Act, 2002 does not contain any provision under which either class of lease above may be terminated, and nor does any action initiated under S.132 or S.14, SARFAESI Act, 2002 terminate either class of lease above, automatically – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Ss.13 and 14 G. Debt, Financial and Monetary Laws – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Ss.13, 14, 5, 34, 35 and 37 – Sale or transfer of secured asset by secured creditor under SARFAESI Act so as to transfer the asset free from incumbrance(s) to transferee – Entitlement to benefit of S.13(6) SARFAESI Act – Necessity of obtaining possession of secured asset prior to any such sale or transfer H. Debt, Financial and Monetary Laws – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Ss.35 and 37 – Overriding effect of SARFAESI Act, 2002 over any other law – Extent of – Held, is dtg/- only to the extent that any provision of other law is inconsistent with provisions of SARFAESI Act, 2002, and only to that extent. I. Debt, Financial and Monetary Laws – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Ss.17(1), 13 and 14 – Persons who may invoke jurisdiction of DRT under S.17(1) – Relief that may be granted by DRT – Restoration of possession of secured asset – Persons to whom possession may be restored by DRT – Lessee of borrower in possession of secured asset where (i) lease is created prior to mortgage which created the secured asset, or

(ii) lease is created after the mortgage vide S.65 -A TPA but prior to receipt of S.13(2) SARFAESI Act notice by borrower, held, falls within words “any person” so as to invoke juri sdiction of DRT under S.17(1) – However, since DRT has power to restore possession of secured asset only to the borrower vide S.17(3), any such lessee of borrower has no remedy under S.17 to protect his possession under a valid and subsisting lease that falls in the leases of type (i) or (ii), above – Remedy of such lessee would only be under Arts 226 and 227 of Constitution – Constitution of India – Arts.226 and 227 – Words and Phrases – “Any person” J. Debt, Financial and Monetary Laws – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 –S.14 – Exercise of power by CMM or DM, dtg/- under – Remedy against, held, lies under Arts.226 and 227 of Constitution. K. Rent Control and Eviction – Maharashtra Rent Control Act, 1999 (18 of 2000) – S.33 – Jurisdiction of courts under – Secured asset in possession of tenant of borrower, where (i) tenancy is created prior to mortgage which created the secured asset, or (ii) tenancy is created after the mortgage vide S.65 -A TPA(Transfer of Property Act) but prior to receipt of S.13(2) SARFAESI Act notice by borrower – Protection of possession of any such tenancy under S.33 of 1999 Act in an action for eviction under SARFAESI Act, 2002 – Proper mode and forum for

- Held, as per S.34 of SARFAESI Act, 2002, injunction cannot be granted by courts under S.33 of 1999 Act when action is taken by secured creditor or CMM/DM under SARFAESI Act to evict a tenant under a tenancy of either type (i) or (ii) above – Furthermore, S.33 of 1999 Act only confers jurisdiction on courts thereunder to decide disputes between landlord and tenant and not disputes between tenant under landlord who is a borrower in respect of secured assets covered by SARFAESI Act, 2002 and secured creditor of such landlord – Only remedy against action for eviction under SARFAESI Act, 2002 is under Arts.226 and 227 of Constitution – Proper mode for eviction of such tenant of type (i) or (ii), above, by the secured creditor of the borrower dtg/- is given in detail in Shortnote C – Constitution of India – Arts.226 and 227 – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Ss. 34, 35, 13 and 14 Disposing of the appeals, the Supreme Court

Held:

A “secured asset” has been defined in Section 2(zc) of the SARFAESI Act to mean the property on which the security interest is created. In case of any immovable property, a security interest is created in a secured asset by way of a mortgage in favour of the secured creditor. There may be cases, where before the mortgage is created in respect of an immovable property, the borrower had already leased out the immovable property in favour of a lessee either as the owner or as a person competent or authorized to transfer the immovable property in accord ance with Section 7 of the Transfer of Property Act, 1882 (TPA). If such a lease is made, by virtue of Section 8 TPA, the lessee will have the right to enjoy the leased property in accordance with the terms and condition of the lease irrespective of whether a subsequent mortgage of the immovable property has knowledge of such a lease or not.

Vishal N. Kalsaria’s case:- dtg/-

“Maharashtra Rent Control Act, 1999, Sec.15 – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Secs.13, 14 & 35 – Protected tenant – Held, once tenancy is created, a tenant can be evicted only after following due process of law, as prescribed under provisions of Rent Control Act. A tenant cannot be arbitrarily evicted by using provisions of SARFAESI Act as that would amount to stultifying statutory rights of protection given to tenant. A non obstante clause (section 35 of SARFAESI Act) cannot be used to bulldoze statutory rights vested on tenants under Rent Control Act. Expression any other law for time being in force as appearing in Section 35 of SARFAESI Act cannot mean to extend to each and every law enacted by Central and State legislature. A landlord cannot be permitted to do indirectly what he has been barred from doing under Rent Control Act, more so when two legislations, that is SARFAESI Act and Rent Control Act operate in completely different fields. While SARFAESI Act is concerned with Non Performing Assets of Banks, Rent Control Act governs relationship between a tenant and landlord and specifies rights and liabilities of each as well as rules of ejectment with respect to such tenants. Provisions of SARFAESI Act cannot be used to override provisions of Rent Control Act. If Bank is allowed to evict a tenant from tenanted pre mises, which has become a secured asset of Bank after default on loan by landlord and dispense with procedure laid down under provisions of various Rent Control Acts, then legislative Powers of State Legislatures are denuded which would amount to subvertin g law dtg/- enacted by State Legislature. Such a situation was not contemplated by Parliament while enacting SARFAESI Act. Impugned judgements set aside”. Bajrang Shyamsunder Agarwal’s case:-

13(4), 13(13), 14 and 15 – Transfer of Property Act, 1882 – Section 65A – Right of the mortgagor to lease the property – A tenant who had entered into an oral agreement, such tenancy impliedly does no t carry any covenant for renewal, as provided under section 65A of T.P. Act. Therefore, in any case, Section 13(13) SARFAESI Act bars entering into such tenancy into such tenancy beyond January, 2012. As the notice under Section 13(2) SARFAESI Act was is sued on 30.04.2011, subsequent reckoning of the tenancy is barred. Such person occupying the premises, when the tenancy has been determined, can only be treated as a “tenant in sufferance” – Such tenants do not have any legal rights and are akin to trespa ssers.

13(4), 14 and 15 – Transfer of Property Act, 1881 – Section 65A – Possession of secured asset – Tenant at sufferance is one who comes into possession of land by lawful title, but who holds it, by wrong after the termination of the term or expiry of the lease by efflux of time. The tenant at sufferance is, therefore, one who wrongfully continues in possession after the extinctio n of a lawful dtg/- title. There is little difference between him and a trespasser. (See R.V. Bhupal Prasad v. State of A.P. and Ors., AIR 1996 SC 140).

13(4), 13(13), 14 and 15 – Transfer of Property Act, 1882 – Section 65A – Possession of secured asset – Appellant – tenant being a tenant without any registered instrument is not entitled for the possession of the secured asset for more than one year from the date of execution of unregistered tenancy agreement – Possession of secured asset – In the present case, as we are in the year 2019, which is 7 years beyond the deadline of 2012, it is ordered that the appellant-tenant shall hand over the possession of the secured asset within 12 weeks of this order to the Assistant Registrar at Bandra Centre of Courts, who in turn shall deliver the same to the respondent no.1 bank. This Court is further of the opinion that such devious practices by the borrower to obstruct the rights of the bank to legitimately realize its dues cannot be appreciated by this Court. Accordingly, Appeal dismissed.” 10.00 Admittedly, first two judgements were rendered by a Bench consisting of Two Judges whereas Bajrang Shyamsunder Agarwal‟s case is presided over by Three Judges besides being latest in this field. Hence, I would like to prefer the same and apply to the present case. In the said case, the Hon‟ble Apex Court categorically discussed the earlier two rulings and further observed the very intention of enacting SARFAESI Act and Rules in pursuance of reports of Narsimham Committee I and II and the Andhyarujina

dtg/- Committee constituted by the Central Government to provide solutions for the issues plaguing the bankin g system of the country where slow-paced recovery and staggering amounts of non - performing assets were looming over the banks / Financial institutions. 11.00 In Bajrang Shyamsunder Agarwal‟s case, the Hon‟ble Apex Court observed that a person occupying the premises on the basis of oral agreement without a registered Lease can be treated as a “tenant in sufferance” and such tenants do not have any legal rights and are akin to trespassers. It was further observed that „tenant at sufferance” is one who comes into possession of land by lawful title, but who holds it, by wrong after the termination of the term or expiry of the lease by efflux of time. 12.00 When said analogy mentioned in Bajrang Shyamsunder Agarwal‟s case is applied in the present case, though th e lease is said to be initially for a period of 11 months as per agreement of lease and license dated 20.03.2017 which was said to be „orally‟ extended for further period, it was not registered, which is a clear -cut violation to Section 55 of the Rent Control Act. On that ground, the applicants should fail. As they are said to be continuing in the possession of demised premises, at the least, they have to be considered as “tenants in sufferance” and such “tenants in sufferance” do not have any legal rights as per Bajrang Shyamsunder Agarwal‟s case, which is regularly applicable to the present case. Hence, in view of these reasons, this Tribunal humbly submits that the Hon‟ble Supreme Court‟s latest ruling of larger Bench rendered in dtg/- Bajrang Shyamsunder Agarwal‟s case is to be preferred than the earlier two judgements. When once it is applied to the present case, the applicant can only be treated as “tenants in sufferance” and they do not have any legal rights. Hence, the contention of tenancy is answered accordingly in favour of the respondent financial institution and against the applicants. 13.00 It is observed in the present case that the applicants have not complied with this Tribunal‟s conditional order while obtaining interim protection as can be seen from the roznama order dated 29.11.2019, which is reproduced as under:- “Applicant and Law Officer of R1 present. R1’s Advocate filed pursis dated 29.11.2019 in Exh.12 stating that the rent of November, 2019 is not deposited and in that way, the conditional order dated 14.5.2019 is not complied. Applicants’ Advocate submits that marriage of her daughter is scheduled on 7.12.2019 and hence the conditional order could not be complied. So, this aspect will be considered during the inquiry of the main case. On applicant’s application, interim order is extended till 29.1.2020, if conditional order is complied properly. Call on 29.1.2020”. 14.00 Admittedly, there is a delay of 119 days in filing this case. As far as condoning the delay beyond the prescribed period of Limitation also, there are certain rulings and they are being quoted hereunder:- 14.01

(i) (1977) 4 Supreme Court Cases 69; Mahant Vs. Financial Commissioner – In the said judgment, Hon‟ble Apex Court has categorically stated that Sec. 5 of Limitation Act is a hard task dtg/- master and a litigant who is not vigilant about his rights must explain each day’s delay.

(ii) AIR 1993 Delhi 132; M/s Democratic Builders Vs. Union of India – A ratio has been laid down that the applicant must explain each day’s delay.

(iii) 2008 (6) Mh. L.J. 239, State of Maharashtra Vs. Vithu – Vague averments in the application cannot be the basis for denying a substantial benefit of law to the respondent .

(iv) 2008 (5) MH L.J. 618, Novita Vs. Saibaba – to find out the truth about reasons given for condonation of delay, the court can find out from reply the correctness of reasons furnished for condonation of delay. 14.02 1 st Applicant is shown as a doctor and an educated person and appeared to be experienced with men and matter. 1 s t applicant is supposed to obtain valid lease deed from the original owner besides getting it registered, particularly when the lease is for more than 12 months as per Maharashtra Rent Control Act and when she is running a school in which interests of several will be involved. Admittedly, applicants have not got their lease deed registered. That is a lacuna on their part. They ought to have challenged the SARFAESI action within 45 days as stipulated U/s 17 of the SARFAESI Act. Admittedly, they have not done so. The day to day delay is not properly explained, as observed in the Hon‟ble Supreme Court‟s rulings mentioned supra. Hence, applicants are not entitled for any relief both on the factual and legal side. Therefore, this M.A.

dtg/- is liable to be dismissed. Hence, Point no.(i) is answered accordingly in favour of the respondent financial institution and against the applicants. Point no.(ii) This M.A. is dismissed.

Interim protection / Pending IAs, if any are deemed to have been vacated / closed.

No costs.

Nagpur

Dt.: 31.01.2020

(Chikkam Vijay Mohan) Presiding Officer Debts Recovery Tribunal Nagpur.