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Rock (Specialist)     17 July 2012

Tenants rights upon auction of a property

I would like to know the rights of a tenant residing in a residential house on a lease agreement(Valid but unregistered) after the auction of the property.

Q:

1.Can tenants be vacated by the bank without their lease amounts settled during auction?

2.who should settle the lease amount to the tenant before vacating. the bank/the original  owner/new owner?

Kindly reply

Thanks,



Learning

 1 Replies

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 )     17 July 2012

Mr.Rock,

Banks used to take advantage of the provisions of SARFAESI Act, 2002 earlier in taking possession of the ‘secured asset’ even when the tenant was in possession of the property. Absolutely, there is no difficulty in taking the possession of the ‘secured asset’ using the protection and assistance under Section 14 of the Act if the property was actually in possession of the borrower or the guarantor.Courts were looking into the issue of rights of tenants and thebona fides as the owner of the property can play with the Bank with fictitious arrangements.  Any person aggrieved, including a Tenant, can approach the Debt Recovery Tribunal under section 17 of the Act. When a tenant approaches the Court or the Tribunal seeking protection of his rights and questioning the action being taken by the Bank using Section 14 of SARFAESI Act, 2002, the Court or the Tribunal used to look into or emphasize as to:(a). Whether there are bona fides in the contention of the tenant?

(b). If Tenant relies on any agreement with the landlord, the date of the agreement or the date from when the Tenant was in possession of the property.

(c). The knowledge of the Bank in respect of tenancy while sanctioning the loan.

(c). Whether the agreement between the tenant or the landlord registered and legal?


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