Section 14 of sarfaesi act

Dear queriest,

in short answers of yours questions are

(1) its an additional power with the bank or financial institution to take the possession wihtout disturbing the law and order. This is not a mandatory procedure for the bank to follow.

(2) No.

(3) a tenant is always tenant his rights are always of a tenant and not as of a owner. The purchaser steps in to the shoes of owner/landlord.

(4) DRT has the sole jurisdiction in the matters of Securitisation.

 

Date of  Judgment	PARTICULARS OF JUDGMENT
29/11/2006	M/s Transcore Vs. Union of India & anr. [Justice Arijit Pasayat & Justice S.H.Kapadia] 2007 AIR SC 712 = 2008 [1] SCC 125 =  2006 [9] Suppl. SCR 785
26/07/2010	United Bank of India Vs. Satyawati Tandon & others  [Justice G.S.Singhvi & Justice Asok Kumar Ganguly]  2010 [8] Supreme Court Cases 110 =  2010 AIR SC 3413  =  2010 [9] SCR 1
07/02/2011	Kanaiyalal Lalchand Sachdev & ors Vs. State of Maharashtra. [Justice D.K.Jain & Justice H.L.Dattu]  2011[2] SCR 602 = 2011 [2] SCC 782
11/09/2007	KARNATAKA HIGH COURT: Single Judge Hutchison Essar South Ltd. Vs. Union Bank of India & another. [ Justice Ashok B Hinchigeri]  AIR 2008 Karnataka : at page 14. This judgment requires the Authorised Officer to evict tenant by due proces of Law. What is the "due process of Law" available to the Authorised Officer? Is his right to obtain Physical Possession under SARFAESI subject to Rent Act. If so, What is the overriding effict of section 35 of SARFAESI Act?

 

Let us view this way

Proposition A: To uphold justice and equity a tenant can be evicted only by due process of Law.

Proposition B: To uphold the aim, object and intention of legislation, the tenant can be evicted under section 13(4) r/w 14

Dear Querist

my opinion on your queries are as under:

1.Whether section 14 is a due process of Law or merely a procedure established by Law?

 

Opinion: section 14 is merely a procedure established by law and nothing more.

 

2. Can a Tenant/occupant be evicted under section 14 without prefering suit/proceedings for eviction in a civil court?

 

Opinion: no, tenant can not be evicted u/s 14 of SARFAESI ACT but tenant can be evicted by due procedure of law and the due procedure of law is, file a eviction suit before rent controller and get eviction order. otherwise not.

 

3. As the Bank does not step into  the shoe of the Landlord / mortgagor, can it maintain a suit for eviction against the tenant? if not, is the Bank driven to sell the propety on "As is where is Basis" so that the Purchaser steps into the shoe of the Landlord to maintain eviction case.

 

Opinion: yes, the bank can sell the property as is where is basis and purchaser steps into the shoe of the original landlord.

 

4. Against the order of CMM [under section 14]: What is the remedy for the Tenant? Can he invoke the Writ jurisdiction or approach DRT or Civil court for stay?

 

Opinion: CMM order can not be challenged before any court.

 

Feel Free to Call 

The phrase used in Article 21 of our Constitution is “procedure established by law”. The intention of the framers of constitution to avoid the use of phrase “due process of Law” can be gathered from the constitutional debates. However, by certain landmark decisions of the honourable Supreme Court, the concept of “due process of Law” was affirmed. Due process of Law is an abstract concept and cannot be defined to cover all circumstances; it has to be tested on case to case basis. As regards the question whether section 14 of the SARFAESI Act or the provisions of various state Rent enactments prevails, depends on interpretation of Article 254 “pith and substance” doctrine. Already Banks and FIs have taken up the issue with the Honourable Suprem Court.

The phrase used in Article 21 of our Constitution is “procedure established by law”. The intention of the framers of constitution to avoid the use of phrase “due process of Law” can be gathered from the constitutional debates. However, by certain landmark decisions of the honourable Supreme Court, the concept of “due process of Law” was affirmed. Due process of Law is an abstract concept and cannot be defined to cover all circumstances; it has to be tested on case to case basis. As regards the question whether section 14 of the SARFAESI Act or the provisions of various state Rent enactments prevails, depends on interpretation of Article 254 “pith and substance” doctrine. Already Banks and FIs have taken up the issue with the Honourable Suprem Court.

Decision of the Honourable Supreme Court dated 03/04/2014 in CRIMINAL APPEAL No. 736 OF 2014 (Arising out of S.L.P. (Crl.) No.1666 of 2012) Harshad Govardhan Sondagar …… Appellant Versus International Assets Reconstruction Co. Ltd. & Ors. ….. Respondents Is uploded in “Files” : It gives power to CMM under section 14 to decide whether the person in possession is a bonafide tenant / lessee or not.

Tenat and lessee cannot be vacated through SARFAESI Act during the period of  validity of their genuine valid documents, till termination of such period.

The recent judgment dated 03/04/2014 of Honourable Supreme Court is attached

After Harshad Soundagar case the SARFAESI law has been changed and only DRT  has been given power to decide the issue of lease or  tenancy.