MR SHASHIKANT BHAGWANRAO PATRE vs BANK OF BARODA on 20 September 2019

JUDGEMENT

(Delivered on 20 t h day of September, 2019)

CLAIM: This is an application filed by the applicant to condone the delay of 821 days in filing the S.A.

gvp 02.00 Application averments:- Applicant has challenged the order dated 12.01.2017 of Dist. Magistrate, Nagpur U/s 14 of the SRFAESI Act. Only on 20.5.2019, applicant got the knowledge that the order of taking physical possession of the tenanted premises has been passed by the Ld. Dist. Magistrate, Nagpur on 12.01.2017. 02.01 Applicant is lawful tenant of R3 occupying ground plus first floor of secured asset since 0 1.09.2010 by virtue of Tenancy Agreement dated 1.9.2010 and since inception of said agreement, applicant is paying monthly rent and increases thereon to R3. The initial monthly rent of the tenanted premises was Rs.5,000/- p.m., which has been subsequently enhanced from time to time and presently as per mutual understanding between applicant and R3, the applicant is paying R3 Rs.8,000/- p.m. towards rent of the tenanted premises. On 5.5.2019, applicant was taken by surprise when R3 refused to meet the applicant for acceptance of rent amount. The applicant tried to contact R3 several times but all in vain. To the shock and surprise of applicant, respondent issued letter dated 15.5.2019 received on 20.5.2019 by the applicant stating that tenanted premises has been mortgaged with R1 and R3 in order to settle his dues wants to sell the same to a 3 r d party and as such the same should be evicted immediately and threatened that if it is not evicted by the applicant, the same shall be posessed gvp by the authorities of R1 on the basis of order of DM, Nagpur. Immediately thereafter applicant tried to contact R3 but R3 did not respond to any of his calls and as such applicant immediately contacted his counsel. On the instructions of the counsel, applicant made extensive search in the office of Dist. Collector, Nagpur and obtained certified copy of impugned order. Applicant got the knowledge of passing impugned order on 20.5.2019 and as such S.A. filed U/s 17 is well within limitation. However, by way of abundant precaution, the present application for condonation of delay is filed. 03.00 1 s t Respondent’s reply averments in Exh.9:- The reasons cited by the appellant for delay is that they did not have knowledge of the order dated 12.01.2017 of DM. The said reason is false as can be seen from record. The appellant is in collusion with the borrowers. With the present S.A., appellants have filed alleged letter dated 15.5.2019 issued by Sh. Pratap Agrawal. The said letter is a bogus,fabricated and got up document fabricated by the parties in order to frustrate the legitimate claim of the bank over the property. Appellants are not bonafide tenants and the documents on record reveal falsity of the case of the appellants. There is no question of any locus of the appellants and hence there is no question of he acquiring knowledge vide said alleged letter dtd. 15.5.2019 of Sh.

gvp Pratap Agrawal. The delay is huge i.e. of 820 days and there is no legitimate justification of the same. Hence, the present application be rejected wi th exemplary costs. The bank relies on judgements mentioned in para 6 of the reply . Ld. Advocate of Respondent nos.2 and 3 endorsed on the M.A. that Respondent nos.2 and 3 have no reply and appropriate orders be passed. 04.00 Arguments of both sides heard. 05.00 Now, the points for determination are:-

(i) Whether the delay can be condoned?

(ii) To what reliefs. 06.00 Point no.(i) The main contention of the appellant is to the effect that he is a tenant of the ground and first floor of the secured asset, which admittedly had a ground plus 4 floors. That means, the applicant is not tenant for the 2 nd to 4 th floors. Accordingly, this Tribunal vide its orders dated 20.06.2019 directed R1 bank to take possession of the floors above the first floor, if it so chooses. There is no communication whether it had taken possession of the floors above the first floor or not. In the same order dated 20.6.2019, this Tribunal directed the applicant to deposit the monthly rents on or before 10 th of every month commencing gvp from July, 2019 and if there is a default, R1 bank can take possession of the ground and first floor also. 06.01 The contention of the applicant is that he is a tenant since 1.9.2010 by virtue of the tenancy agreement dated 1.9.2010 and paying the monthly rent and increases thereon to R3. Admittedly, R3 is the borrower of R1 bank and R2 and R3 mortgaged the entire ground plus 4 floor building to R1 bank in the year 2013. R1 bank’s Advocate submits that R1 bank created mortgage on R2’s declaration U/s 65(A) of the Transfer of Property Act and that there is no covenant for renewal and that the renewal is prohibited even if the applicant’s contention is accepted. R1’s Advocate further submits that renewal of the alleged tenancy is impermissible and that the applicant becomes a tenant by sufferance. He further submits that when the lease is for more than one year, it has to be registered under Section 55 of the Maharashtra Rent Control Act and it is the duty and obligation of the landlord (R3) to get it re gistered. There is some force in this contention. When the applicant i s admitting that he is deemed as a tenant since 1.9.2010 i.e. more than one year, it is not known as to why he had not got the tenancy agreement registered and it is also not being explained by the applicant. That apart, the applicant approached this Tribunal with an inordinate delay of 821 days on the premise that he came to know about the gvp SARFAESI action initiated by the 1 s t Respondent bank on 20.05.2019 only and that he got issued a letter dated 15.5.2019 to R3, who said to have given reply on 20.5.2019 stating that tenanted premises was mortgaged with R1 bank and R2, in order to settle his dues, wants to sell the same to a third party and as such the same should be evicted immediately. Though, applicant is pretending enemity with his landlord (R3), still R3 is going slow on applicant’s application, may be with a view to procrastinate the R1 bank’s SARFAESI action further, though this application is filed with huge delay of 821 days. It is being seriously opposed by R1’s Advocate. Though this is a delay condonation application and the delay alone has to be considered, incidentally and consequentially it is necessary to go through the very merits of the contentions of both parties; i.e. whether any worthwhile purpose can be served if the inordinate delay of 821 days is condoned and if the day to day delay of 821 days is explained by the applicant. The latest judgement rendered by the Hon’ble Supreme Court of India in a case between Bajrang Shyamsunder Agarwal –Vs- Central Bank of India and another dated 11.9.2019 in Criminal Appeal No.1371 of 2019 [arising out of SLP(CRL) No.9590/2015] is very relevant and applicable to this case. The judgement rendered in the said case is also out o f a dispute between the alleged tenant and the landlord who gvp took loan from a nationalized bank and when the said nationalized bank initiated SARFAESI action. The applicant herein is relying on the rulings of the Hon’ble Supreme Court in the case of Harshad Govardhan Soundagar –Vs- IARC Ltd and ors (2014) 6 SCC 1 (hereinafter referred to as Harshad Govardhan’s case) and also Vishal N. Kalsaria –Vs- Bank of India and ors (2016) 3 SCC 762 [hereinafter referred to as Vishal N Kalsaria Case]. Incidentally, both these cases were considered, distinguished and dealt with by the latest judgement dated 11.09.2019 of a larger bench consisting of Hon’ble Justices N.V. Ramana, Mohan N. Shantanagoudar, and Indira Banerjee in the case of Bajrang Shyamsunder Agarwal. The facts of the present case and the judgement covered by Bajrang Shyamsunder Agarwal case are akin and similar to each other. In the Bajrang Shyamsunder Agarwal’s case, the larger bench of the Hon’ble Supreme Court on 11.9.2019 observed that “the operation of Rent Act cannot be extended to a tenant-in-sufferance vis-à-vis the SARFAESI Act, due to the operation of Section 13(2) read with Section 13(13) of the SARFAESI Act . A contrary interpretation would violate the intention of the legislature to provide for Section 13(13), which has a valuable role in making the SARFAESI Act a self-executory instrument for debt recovery. Moreover, such an interpretation would also gvp violate the mandate of Section 35, SARFAESI Act which is couched in broad terms.” 06.02 When Bajrang Shyamsunder Agarwal’s case is applied to the present case, the tenancy agreement between the applicant and R3 was executed on 13.9.2010, though the applicant is pleading it as 1.9.2010. In pursuance of said tenancy agreement dated 13.9.2019, applicant is contending that he is still continuing in possession of the tenanted premises i.e. ground plus first floor. Though it is for more than one year, neither the tenant nor the landlord (R3) have chosen to get it registered. So, even if applicant’s alleged tenancy is assured to be in existence, still applicant will come under the purview of a ‘tenant-in-sufferance’. The Hon’ble Supreme Court observed in Harshad Govardhan’s case that a tenant has to produce proof of execution of a registered instrument in his favour by the lessor. Where he does not produce proof of execution of registered instrument in his favour in his favour and instead relies on an unregistered or oral agreement accompanied by delivery of possession, the Chief Metropolitian Marigst rate or District Magistrate as the case may be, will have to come to the conclusion that he is not entitled to the possession of the secured asset for more than a year from the date of the instrument or from the date of delivery of possession in his favour by the landlord. So, as per Harshad Govardhan’s

gvp case, the District Magistrate has to conclude that the applicant herein is not entitled to the possession of the secured asset for more than one year from 13.09.2010 i.e. after 12.9.2011. So, the applicant has to be considered as ‘tenant-in sufferance’ w.e.f. 13.9.2011. The tenant is not entitled to possession of the secured asset for more than the period prescribed U/s 107 of the Transfer of Property Act as was observed by the Hon’ble Supreme Court in Bajrang Shyamsunder Agarwal’s case. So, when said case is applied to the facts of the present case, the applicant had no case on merits, even if his S.A. is ordered to be numbered by condoning the inordinate delay of 821 days. Hence, the Ruling of the Hon’ble Calcutta High Court, Single Bench reported in [2018] AIRCC 7929 relied on by Applicant’s Advocate would not stand in view of Hon’ble Supreme Court’s Rulings in Bajrang Shyamsunder Agarwal’s case. 06.03 As per the established rulings of the Hon’ble Supreme Court, if a party wants to file case after expiry of period of Limitation and wants to invoke the jurisdiction U/s.5 of the Limitation Act, the applicant has to explain the day to day delay. In the present case, though there is an inordinate delay of 821 days in filing this application and challenging the SARFAESI action, the landlord (R3) had not raised his little finger though the District Magistrate’s order was passed on 12.01.2017 after initiation of SARFAESI

gvp action. This aspect is probablising the contention of R1 bank that the applicant is in collusion with the borrowers (R2 and R3).

The Hon’ble Supreme Court in Bajrang Shyamsunder Agarwal’s case observed that “such type of devious practices by the borrower to obstruct the rights of the bank to legitimately realize its dues cannot be appreciated by the Hon’ble Supreme Court,” and accordingly directed the tenant to hand-over possession of the secured asset within 12 weeks. So, the ‘devious practices’ of the borrowers (R2 and R3) cannot be appreciated by this Tribunal as they appeared to have pressed the applicant into service by filing this application to procrastinate R1’s SARFAESI action to the maximum extent possible. In that way, there are no merits in this case, even if the contentions raised in the S.A. are considered. That apart, the day to day delay which has to be explained for 821 days delay had not been explained by the applicant and hence, this application is liable to be dismissed with costs. Point no.(ii) Hence, I pass the following order:-

ORDER

(i) M.A. is dismissed with costs. The applicant is at liberty to participate in the proposed auction, if he so desires as represented by his Advocate during his arguments.

gvp

(ii) The amounts, if any, deposited by the applicant pursuant to this Tribunal’s orders dated 20.06.2019 in I.A. No.365/2019 in “’No lien A/c” with R1 bank is ordered to be appropriated in the loan account. That is to say, R1 bank is directed to close the “No lien A/c” and appropriate its proceeds towards outstanding dues of the loan account under intimation to this Tribunal.

Nagpur

Dt. 20.09.2019 (Chikkam Vijay Mohan) Presiding Officer Debts Recovery Tribunal, Nagpur