Kankipati (Internship) 25 May 2015

Tenant vs bank (sarfaesi act) help me

Help... Help...... Help.............

Lessee point of view (my view) : I am in business. I took a property on lease to do business in the year 2007 and entered into unregistered agreement with the owner for 10 years to conduct business i.e, (from 2007-2017). The owner of the property took some amount on interest basis along with security deposit. Interest accrued on that amount is equal to rent and hence no rent was paid till this date and the same adjustments are shown in audited accounts.

Lessor point of view : Owner took loan from bank in the year 2012 and didnt repay the loan till now and became npa in the year 2013.

Bank Action : Bankers took an order from Collector as per SARFAESI Act to take the possession of the building by supressing the facts that there are tenants in the building.

As per the order MRO and Revenue Inspector are compelling us to vacate the building.

My view

As per a report in 2010(1) ALD page 473 the Hon'ble high court of A.P in the said decision observerd as follows ;

''SARFAESI act,2002,-Section 13 and 14 - Secured assets- Jurisdiction of respondent- Bank to evict tenants of premises and to seal the premises, disabling them from conducting business,scope - Held, on exercise of powers under act does not stand on higher footing, than that of an attachment of property before sale - Rights of a tenant, or any other person in possession of property , would in no way be defeated, on account of attachment- it is ultimately for purchaser of property to choose whether or not to continue tenant- In case he decides to evict tenant, he has to take recourse of law- Therefore, steps taken by respondentto seal premises and thereby disabling petitioners from undertaking business, cannot be sustained in law- Writ Petition allowed- Action of respondent in sealing premises set aside''

We filed a petition before collector to grant interim stay order.

If the collector doesn't grant the interim order and if the MRO and Revenue inspector comes to evict me from the possession of theproperty what is the action i have to take

and

even if the collector doesn't grant me interim stay order what is the action i have to take.

Plzzz Help me .........

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5 Replies

danish (Manager) 25 May 2015

Hi ,

Your tenancy is created prior to mortgaged so you are safe. Dont worry . Corrupt bank officers can only haress you. where are you located..... ?

1. File writ in HC

2. Hire a lawyers who is good in practising in DRT and HC

RAJU O.F., (Advocate) 31 May 2015

As your lease agreement is not registered by paying the required stamp duty, your tenancy may not be recognized under law. Bank can proceed under SARFAESI Act if the mortgagors loan account is NPA. You may try your luck at High Court by filing Writ

c.p.s. ramachary (1500) 10 June 2015

If you are a bonafide tenant, you cannot be dispossessed. Non registration of lease deed does not have any impact on the jural relationship of landlord and tenant. Please read the judgment of Karnataka High Court in Hutchison Essar P. Ltd. Vs Union Bank of India AIR 2008 Kar.14. Secured creditor can take only symbolic possession of secured asset under occupation of the bona fide tenant.

Further the bank may move an application under Sec.14 before the Metropolitan / Dist. Magistrate for assistance for physical dispossession of yourself from the leased premises. You have to verify from the Court records and file a Misc.Petition to serve you a notice in Sec.14 petition and give you an oppertunity of hearing as approaching DRT for relief doe not serve any purpose. If oppertunity of hearing is given to you by the Magistrate, you have to establish your bona fides as a tenant in the premises. In default, the Magistrate my direct his subordinate to disposses you from the premises.

Uday (Lawyer) 18 June 2015

In my view, if the tenancy is not registered, then you cannot take shelter under tenancy or lessee as per the judgement mentioned below.

I would request Mr.C.P.S.Ramachary to discuss this issue in the light of

Harshad Govardhan Sondagar Versus International Assets Reconstruction Co.Ltd. & Ors.

c.p.s. ramachary (1500) 19 June 2015

Non-registration of the lease deed is not fatal to the creation of the lease. (Anthony v. K.C. Ittoop and Sons and Ors. reported in AIR 2000 SC 3523). But its non-registration does not come in the way of existence of the jural relationship of a lessor and a lessee. Non-registration may have other consequences for the parties. In the case of Samir Mukherjee (supra) the Hon'ble Supreme Court has taken the considered view that the existence of the valid lease is a prerequisite for the purpose of invoking rule of constructions and deeming provisions embodied in Section 106 of the Transfer of Property Act. In the absence of a registered instrument no valid lease from year to year or for a term exceeding one year or reserving a yearly rent can be created. If the lease is not a valid lease within the meaning of the opening words of Section 106 of the Transfer of Property Act and in the wake of non-registration of the lease agreement, it can only be said that the lease is terminable without issuing the advance notice to the tenant vice versa. Even assuming that there are some irregularities in inducting the petitioner into the aforesaid premises, they do not make it an unauthorised occupant, much less a trespasser. A close glance at Sec.13 (1) of the SARFAESI Act makes it obvious that, Sec.65A is not excluded as in case of Secs.69 & 69A of T.P. Act. Hence Sec 65A has no overriding effect as it is not inconsistent. Further, lease (including the relationship of land lord and tenant ) is “State Subject” covered by Entry no.18 in List-II (“State List”) over which State Legislature alone has power to legislate and Parliament cannot encroach and make law on the State Subjects.

In Harshad Govardhan Sondagar’s case the Hon’ble Supreme Court held that, lease year to year requires registration within the meaning of Sec.107 of TP Act. Hence if the lease is in contravention of provisions of Sec.65A of TP Act (i.e. exceeding 3 years and without registration) cannot protect the tenant if Sec.14 of SARFAESI Act is invoked. Supreme court’s decision is binding on all High Courts, Karnataka High Court’s finding stands overridden i.e. no protection to such tenant. However the Magistrate is conferred with power (jurisdiction) by Supreme Court to hold enquiry and find out if the tenant is bona fide and holds valid lease or not, which the legislators might not have thought over such situation (casus ommissus).