Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002: ss. 14, 13(2) and 13(13) – Taking of possession of secured asset by the secured creditor – Tenant restraining from taking possession of the secured asset – Protection of tenant from eviction, in case of default by borrower and the landlord – On facts, grant of financial facility to borrowers by the respondent Bank – Credit facility secured by way of mortgage of property-secured asset in favour of the Bank – Accounts of borrower declared as non-performing assets – Issuance of notice u/s. 13(2) by the Bank to the borrower – Appellant’s case that he is the tenant of the secured asset on a monthly rent since inception of tenancy – Petition u/s. 14 by the Bank – Intervention application by appellant-tenant seeking protection of possession of the secured asset – Dismissed by magistrate holding that no registered tenancy placed on record – On appeal, Held: Neither registered instrument produced nor any good or sufficient evidence adduced to establish the factum of tenancy – Xerox copies of rent receipts were produced however, the first xerox copy of rent receipt itself was of the date which is after the creation of mortgage – No claim by the borrowers that any tenant is staying at the Secured Asset – Also third-party valuers confirmed that the borrowers were staying at the Secured Asset – Furthermore, according to the appellant, he is tenant-insufference, thus, not entitled to any protection of the Rent Act – Even if tenancy is claimed to be renewed in terms of s. 13(13), consent of secured creditor was required which was not sought – Thus, the Magistrate rightly dismissed the application.
Dismissing the appeals, the Court
HELD: 1.1 In the instant case, there is a serious doubt as to the bona fide of the tenant, as there is no good or sufficient evidence to establish the tenancy of the appellant. According to the appellant, he is a tenant of the Secured Asset from 12.06.2012. However, the documents produced in support of his claim are xeroxcopies of the rent receipts and the first xerox copy of the rent receipt is of 12.05.2013 which is after the date of creation of the mortgage. It is pertinent to note here that the Borrowers have not claimed that any tenant is staying at the Secured Asset. At the time of grant of facility, third-party valuers had also confirmed that the Borrowers were staying at the Secured Asset. The appellant pleaded tenancy from 12.06.2012 to 17.12.2018. This is not supported by any registered instrument. Further, even according to the appellant, he is a “tenant-in-sufferance”, therefore, he is not entitled to any protection of the Rent Act. Even if the tenancy has been claimed to be renewed in terms of Section 13(13) of the SARFAESI Act, the Borrower would be required to seek consent of the secured creditor for transfer of the Secured Asset by way of sale, lease or otherwise, after issuance of the notice under Section 13(2) of the SARFAESI Act and, admittedly, no such consent has been sought by the Borrower in the instant case. [Para 14][535-F-H; 536-A-B] Harshad Govardhan Sondagar v. International Asset Reconstruction Co. Ltd. & Ors. (2014) 6 SCC 1 : [2014]
11 SCR 605; Kanaiyalal Lalchand Sachdev v. State of Maharashtra (2011) 2 SCC 782 : [2011] 2 SCR 602; Bajarang Shyamsunder Agarwal v. Central Bank of India & Anr. (2019) 9 SCC 94 : [2019] 12 SCR 352 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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