JUGAL MELABHAI AHIR vs ARCHANA MANOJ GUPTA on 10 February 2020

J U D G M E N T

(Delivered on this 10 th day of February, 2020)

01.00 Applicants filed present M.A. to condone the delay of 179 days caused in filing the Securitization Application.

Gvp/- 02.00 Application averments: It is submitted that applicants filed S.A. challenging possession orders dated 28.3.2018. It is submitted that Respondent bank without following due procedure obtained the order. While filing the Appeal, it was informed by the office that impugned possession order dated 28.3.2018 is not the measure under SARFAESI Act. The applicants have already preferred Civil Suit for protection of their rights since November, 2017, but the last order in the said suit dated 24.5.2018 which has given rise to cause of action for the appellant to file the instant S.A. As per said order of DM, limitation expires on 12.5.2018, but during that time and till date appellant is pursuing their rights before Civil Court. However, the same may be considered while condoning the delay of about 10-12 days, which is explained in separate application for condonation of delay. The grievance of the appellants is mainly in respect of DM’s order dated 28.3.2018. According to the said notice, applicants have to approach this Tribunal on or before 12.5.2018, but the present appeal is filed belated, hence delayed by about 248-250 days. It is submitted that the delay is not intentional and it can be condoned for the reasons given below. 02.01 Before issuance of impugned order, applicant moved civil suit R.C.S. No.144/2017 before Civil Judge, Jr. Division, Akot, Dist. Akola. In that applicant pursued some amendments which came to be rejected by the civil court on 24.5 .2018.

Gvp/- Thus, the cause of action arose to file the S.A. on 24.5.2018. The said Civil suit is pending and its next date is 30.11.2018. It is clear that applicants have approached some other remedies but not before this Tribunal. Sin ce the order dated 28.3.2018 is impugned in the S.A., therefore, the S.A. should have been filed on or before 12.5.2018 but since the applicant has opted some other remedies, therefore the delay of about 179 days has occurred in moving the present S.A. The delay so occurred is absolutely bonafide and unintentional. It is settled law that as per section 12 of the Limitation Act, 1963, the time consumed in legal proceedings is to be reckoned and it shall be excluded while computing the period of limitation for any suit. In aforesaid circumstances, the S.A. is well within limitation and not time barred, hence the delay of about 179 days as explained day to day may kindly be condoned in the interest of justice. 03.00 Respondent no.1 did not file reply to the M.A. despite giving her sufficient opportunities and despite imposing costs. Said costs are also not paid. These aspects show that R1 is not interested in filing reply to M.A. and hence R1’s reply to M.A. is treated as ‘Nil’ today, by accepting R2 bank Advocate’s contention that R1 is in collision with the applicants. 04.00 Reply averments of R2: Respondent No.2 bank filed reply vide Exh.10 denying the averments made in the M.A. and it is inter-alia submitted that the applicants have not come

Gvp/- before this Tribunal with clean hands and applicants have suppressed so many material facts and details. It is submitted that there is clear cut collusion in between the applicants and Respondent no.1 and the appeal alongwith delay condonation application have been filed by way of collusion and conspiracy in between the applicants and R1. It is apparent and clear that false, bogus and fabricated documents and papers are created for filing the S.A.. The brother of the husband of R1 namely Mr. Prakash Rajendra Gupta has taken loan from R2. Respondent no.2 bank has sanctioned Securec Cash Credit Loan of Rs.60 lakhs to the borrower namely M/s Shri Gajanan Maharaj Recycling Plant, Prop. Shri Prakash Rajendra Gupta. A registered Deed of Mortgage dated 1/1/2014 has been signed and executed in favour of R1 by three mortgagors viz. Sau Archana Manoj Gupta, Mr. Prakash Rajendra Gupta and Mr. Manoj Rajendra Gupta. Thus, Respondent no.1 is one of the mortgagor of R2 bank. Upon their failure to pay the dues, R2 bank initiated SARFAESI action against its borrowers and guarantors. R2 bank filed application U/s 14 of SARFAESI Act before the District Magistrate, Akola vide MRC-81/Akola/52/ 2017. In the said proceedings, borrowers appeared and raised alleged contentions tried to be raised by the app licants. Hon’ble DM, Akola by its order dated 28.3.2018 allowed R2 bank’s application. Thereafter, by way of collusion with the borrowers, applicants filed R.C.S. No.144/2017.

The

Gvp/- possession of mortgaged property in question had already been taken by the bank prior to the date of filing of the suit. Beside the said suit, two other false and baseless suits bearing R.C.S. No.139/2017 and 152/2017 are filed with similar and identical allegations, by way of collusion and those two suits are also pending and subjudice. On 5.4.2018, R2 bank filed copy of order dated 28.3.2018 of DM Akola U/s 14 of the SARFAESI Act on record in R.C.S. No.144/2017. Inspite of that, applicants have failed to take appropriate steps by approaching to correct Forum. By order dated 6.12.2018, Ld. Triual court rejected temporary injunction application of the applicants in R.C.S. No.144/2017 by observing that applicants have efficious alternate remedy to approach DRT. Inspite of passing of the said order, the applicants have failed to take necessary steps as per law. Respondent no.1 and her brother Mr. Prakash Gupta filed S.A. No.62/2018 on 30.12.2017 praying to quash and set aside possession dated 15.11.2017. This Tribunal declined to grant any stay or any interim relief in the sa id S.A. In the said S.A., this Tribunal by order dated 24.12.2018 directed the applicants of the said S.A. no.62/2018 to deposit certain amount but the borrowers / applicants in S.A. No.62/2018 failed to comply with the said order. Thereafter, these applicants with malafied intention, in collusion with the borrowers filed another R.C.S. No.187/2018 before the Hon’ble CJSD, Akot. The Hon’ble CJSD, Akot has allowed R2 bank’s

Gvp/- application and rejected the plaint of the applicants by order dated 6.2.2019. The present applicants on 20.12.2018 also filed Misc. Civil Appeal No.24/2018 before the Hon’ble Dist. Court, Akot against the order dated 6.12.2018 passed in R.C.S. No.144/2017. The said appeal is still pending Even after filing of present proceedings before this Tribunal and even during pendency of present proceedings, the applicants have filed proceedings before the Hon’ble Civil Court knowing fully well about statutory bar to the jurisdiction of Civil Court. It shows that the applicants deliberately, malifidely proceeded with the proceedings before the Hon’ble Civil Court and, therefore, the applicants are not entitled for the benefit of the period during which they pursued the remedy before Civil Court. Even as on today, R.C.S. No.144/2017 is pending on the file of CJSD, Akot and during pendency of the said suit, the applicants cannot claim benefit U/s 14 of the Limitation Act. R2’s taking symbolic possession of the mortgaged property on 15.11.2017 and publication of possession notice in the newspapers dated 20.11.2017 itself gave rise to the cause of action if any. The passing of order dated 28.2.2018 by DM, Akola has not given rise to any separate and independent cause of action to the applicants.

From 15.11.2017, there is long inordinate, unexplained delay and latches on the part of the applicants in filing the S.A. and, therefore, present application is liable to be rejected. Even from the date of order dated 28.3.2018, the S.A.

Gvp/- is required to be filed within 45 days which period expired long back on 12.5.2018. Present appeal seems to have been filed on or about 6.11.2018. Thus, there is long inordinate delay of about 174 days and no satisfactory and bonafide explanation is given by the applicants for such huge delay. The day to day delay is not explained. Therefore, the delay is not liable to be condoned. In fact, there is not any grounds or reasons mentioned for the delay caused. The alleged lease deed dated 15.11.2016 is not legal and valid and it is not admissible and it cannot be looked into. Applicants have stated that by alleged lease deed, they have allegedly taken immovable property on lease for the period of 5 years at yearly rent of Rs.18,000/ - per year. Thus, the applicants have come with the case of yearly tenancy for five years period. The said lease deed is not a registered document and hence it is not legal and valid and not admissible and cannot be looked into. In view of the prior mortgage of the property in question with the bank, the alleged so called lease dated 15.11.2015 is not legal and valid. On the basis of alleged document, the applicants have not got any legal rights. On this ground also, the application is liable to be dismissed with costs. The loan account of the borrower is NPA and R2 bank has to recover more than Rs.1,05,68,000/- from its borrower, mortgagor and guarantors, which is a public money. Therefore, present application of the applicants be rejected with costs.

Gvp/- 05.00 Arguments heard. 06.00 Now, the point for determination are:

(i) Whether the delay of 178 days 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? 07.00 Point no.(i) The Learned Advocate for the applicants contended that the Respondent no .1 is the mortgagor who alongwith R2’s borrowers/guarantors mortgaged the immovable property (hereinafter to be referred as ‘disputed property’), on which the applicants are said to be lease holders vide lease deed dated 15.11.2016 for the period of 5 years on yearly rent of Rs.18,000/- per year. 07.01 Learned Advocate for the Respondent no.2 bank contended that Smt. Archana Manoj Gupta (R1 herein), Mr. Prakash Rajendra Gupta and Mr. Manoj Rajendra Gupta (who are not party to the present proceedings) are the owners and title holders of the disputed property, mortgaged the same in favour of Respondent Bank on 1.1.2014 and that unregistered lease deed is dated 15.11.2016 which apparently is subsequent to the date of mortgage with Respondent no.2 bank. He submitted this case is filed for condonation of delay of 1 79 days. He categorically contended that the applicants are not having valid tenancy and that they cannot hold possession of the disputed property. So, incidentally and consequentially, the

Gvp/- 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 deed on 15.11.2016 for 5 years with a yearly rent of Rs.18,000/-. As the applicants are also contending that they are continuing the tenancy, their nature of tenancy also has to be incidentally considered in the present case to avoid multiplicity of proceedings. 07.02 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

Gvp/- class of such 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 the 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

Gvp/-

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 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 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

Gvp/- 1371/19 in SLP (Crl) 9590/15 [hereinafter to be referred as ‘Bajrang Shyamsunder case’) 7.03

Specific provision of the Act applicable to the present case and to be examined by both parties: - Section 55 of the Maharashtra Rent Control Act, which reads as follows:- “(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 b e, 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 prevail, 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.” 08.00

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

Gvp/- 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. Admittedly, the earlier two 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 applicants have to be considered as ‘tenant in sufferance’ or not has to be considered. 09.00

It is an 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 l andlord contravenes this section, the landlord be punished with imprisonment of three months or with fine not exceeding Rs.5000/- or with both. 09.01

So, in the State of Maharashtra, in order to protect the rights of tenants and landlords, the registratio n of the lease deed was made compulsory if the lease exceeds ‘one

Gvp/- 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 applicants’ had a weak case. 10.00

Whether the rulings governing both parties in this regard will be of any help to the applicants is to be considered in the 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

Gvp/- 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 o f 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 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

Gvp/- 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 – 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, 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,

– Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Ss. 13(13), (2) and 35.

Gvp/- 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

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 – 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,

Gvp/- 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

Security Interest Act, 2002 – Ss.35 and 37 – Overriding effect of SARFAESI Act, 2002 over any other law – Extent of – Held, is 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

Gvp/- 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 jurisdiction 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

Security Interest Act, 2002 –S.14 – Exercise of power by CMM or DM, under – Remedy against, held, lies under Arts.226 and 227 of Constitution.

Gvp/- 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 is given in detail in Shortnote C –

Gvp/- Constitution of India – Arts.226 and

– 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 accordance 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.

Gvp/-

Vishal N. Kalsaria’s case:-

“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 wit h 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

Gvp/- evict a tenant from tenanted premises, 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 subverting law 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(2), 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 not 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 issued 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 trespassers.

Gvp/- 13(2), 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 tenan t at sufferance is, therefore, one who wrongfully continues in possession after the extinction of a lawful 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(2), 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

Gvp/- bank to legitimately realize its dues cannot be appreciated by this Court. Accordingly, Appeal dismissed.” 10.01 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 Committee constituted by the Central Government to provide solutions for the issues plaguing the banking 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.

Gvp/- 12.00 When said analogy mentioned in Bajrang Shyamsunder Agarwal’s case is applied in the present case, though the lease is said to be for a period of 5 years as per lease deed dated 15.11.2016 which is apparently subsequent to the date of mortgage of the disputed property with R2 bank by its borrowers / mortgagors on 1.1.2014, 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 squarely applicable to the present case. Hence, in view of the se reasons, this Tribunal humbly submits that the Hon’ble Supreme Court’s latest ruling of larger Bench rendered in Bajrang Shyamsunder Agarwal’s case is to be preferred than the earlier two judgements. When once it is applied to the present case, the applicants 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 no.2 bank and against the applicants. 13.00 Admittedly, there is a delay of 179 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:-

Gvp/- 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 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 Applicants are 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. 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

Gvp/- mentioned supra. Hence, applicants are not entitled for any relief both on the factual and legal side. Therefore, this M.A. 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.: 10.02.2020 (Chikkam Vijay Mohan) Presiding Officer Debts Recovery Tribunal Nagpur.