Dismissed

M/s Automotive Manufacturers private limited v. Axis Bank

DRAT4 Aug 2025MISC APPEAL/11/2024

Case brief

AI extract

What is this about?

The Debts Recovery Appellate Tribunal dismissed an appeal filed by a tenant against an order rejecting a stay application. The Court held that the unregistered lease agreement, executed after the issuance of a Section 13(2) notice and covering over nine years, did not confer protection against eviction under SARFAESI proceedings. Consequently, the challenge to the stay application was not entertai

What did the court decide?

The appeal challenging the stay application order is dismissed. The ancillary application to implead the borrower is dismissed. The lower court is directed to dispose of the stay application on merits

M/s Automotive Manufacturers private limited versus Axis Bank — Service and Employment | DRAT (2025)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 04^th of August, 2025

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PRESENT: Hon’ble Mr. Justice G. Chandrasekharan CHAIRPERSON

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M.A.(S.A):11/2024

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(IA 1234/2024 in S.A. No.209/2024 of 2019 before DRT-Madurai)

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BETWEEN

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M/s. Automotive Manufacturers Private Limited, Registered Office at 108, Bazar Ward, Kurla, Mumbai and Branch Office at 8571, Rashtrapathi Road, Secunderabad, Telungana Rep. by its Authorized Signatory.

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…Appellant

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-Vs1. M/s. Axis Bank Limited, Represented by its Vice President P.Karthikeyan, Madurai Branch, No.37, Naicker New Street, Madurai - 625 001. 2. M/s.Susee Auto Plaza Pvt Ltd., Having Registered Office at 25, Tamilsangam Road, Madurai. ….Respondents Counsel for Appellant : Mr. Mr. R. Sugumaran Counsel for R1 : Mr. TKM Saikrishnan Counsel for R2 : Mr. A. Periasamy

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ORDER

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This Appeal is filed challenging the order passed by the Learned Presiding Officer, DRT, Madurai in Stay Application filed in IA 1234/2024 in SA 209/2024. The aforesaid SA was filed by M/s. Automotive Manufacturers Private Limited, the tenant of 2^nd Respondent before the DRT, M/s. Susee Auto Plaza Pvt. Ltd. The Stay Application came to be dismissed on the ground that the lease deed, on the basis of which the tenant, M/s. Automotive Manufacturers Private Limited claims tenancy is an unregistered lease agreement executed for a period of more than one year. It is now informed by the Learned Counsel for the tenant / Appellant that the lease deed has come into existence after the issuance of Section 13(2) Demand Notice.

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The registered lease agreement which had come into existence prior to creation of mortgage and the registered lease agreement which had come into existence after the

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execution of mortgage but prior to issuance of Section 13(2) notice are alone protected, subject to satisfying the conditions required under Section 65-A of the Transfer of Property Act, in case of lease created after the execution of mortgage and prior to issuance of Section 13(2) notice. Admittedly, the lease agreement concerned in this case is an unregistered lease agreement for more than a year, that is, for nine years. More specifically it had been executed after the issuance of Section 13(2) notice. Therefore, there is no doubt that the tenant, M/s. Automotive Manufacturers Private Limited is not protected from eviction under the SARFAESI proceedings.

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When the matter was heard on 15.05.2025, this Tribunal, found that there no merits in the main Appeal, i.e. MA (SA) 11/2024. Learned Counsel for tenant i.e. M/s. Automotive Manufactures Private Limited submitted that the

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tenant is taking steps to settle the issue. The impleading Petitioner in the IA 478/2025 also submitted that the impleading Petitioner is also negotiating with the Bank for

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settlement. Thus, the matter was adjourned to 03.06.2025 and the parties were directed to maintain status quo .

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When the matter was heard on 03.06.2025, Learned Counsel for Appellant submitted that Appellant was taking steps for shifting the materials available in the tenanted premises and sought three months’ time, this Tribunal granted two month’s time for the Appellant to either to vacate the property or report settlement, and thus recorded that the Appeal will be disposed of in the light of the observations made on 15.05.2025.

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When the matter is taken up today, Learned Counsel

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for Appellant/Tenant submitted that he had identified a buyer and seeks some more extension of time for a month. This Tribunal is of the view that tenancy in favour of the Appellant is not at all entitled to be protected. Reason is that, it is not a registered tenancy and the lease period was

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for more than a year and executed after issuance of Section

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13(2) Notice.

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In the said circumstances, this Tribunal orders that challenge to the order passed by Learned Presiding Officer DRT, Madurai, in IA 1234/2024 in SA 209/2024 cannot be entertained.

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Accordingly, this Appeal in MA (SA) 11/2024 is dismissed. In view of dismissal of this Appeal, IA 478/2025 filed to implead the borrower is also dismissed. Other IAs, if

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any, stands closed. Both the parties shall bear their own costs.

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Learned Presiding Officer, DRT, Madurai is directed to

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dispose of the SA 209/2024 on merits and in accordance with law, as expeditiously as possible.

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[Dictated to Athistamani, PS, in open court, transcribed by her, corrected and signed by me this 04^th of August, 2025]

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M/s Automotive Manufacturers private limited v. Axis Bank

Case brief

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M/s Automotive Manufacturers private limited v. Axis Bank

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