Dismissed

Rosely Thomas v. Indian Overseas Bank

DRT7 Jul 2025SA/3/2025

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed an application by a tenant seeking to restrain a bank from taking possession of secured assets. The Tribunal held that the applicant failed to prove bona fide tenancy as the alleged agreement was unregistered, executed post-loan default, and lacked corroborative evidence, applying Supreme Court precedents denying Rent Act protection to tenant-in-sufferance.

What did the court decide?

SA No. 3 of 2025 stands dismissed with cost to the 1st defendant bank.

Rosely Thomas versus Indian Overseas Bank — Banking and Recovery | DRT (2025)

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Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

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DATED THIS 7^th DAY OF JULY, 2025

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PRESENT: Su. WILLYAHM, B.Sc., M.L. [DISTRICT JUDGE - Retd] PRESIDING OFFICER

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S.A No. 3 of 2025

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Between

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Rosely Thomas, W/o. Thomas B.V. Residing at Door No.31/1068 D1 (New No.46/1128 B6), Second Floor, Victory Garden, Near Rudramaala Temple, Vaduthala, Ernakulam, Kochi – 682 023.

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--- Applicant

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And

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M/s. Indian Overseas Bank, Ernakulam Branch, Thekkeekkara Mansion, First Floor, M.G. Road, Ernakuklam, Kochi 682035, Rep. by Authorized Officer.

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Sanil Kumar V., IC 41/2505, Kochukarimpadam, Thottam, Mancaud P.O, Trivandrum – 695 009.

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Rekha Suvarnavalli, IC 41/2505, Kochukarimpadam, Thottam, Mancaud P.O, Trivandrum – 695 009.

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--- Defendants

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SA No. 3 of 2025

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This Securitization Application coming on 04.06.2025 for final hearing before me in the presence of Ms. Megha Mukundaswar, Counsel appearing for the Applicant and Mr. Sunil Shankar, Counsel appearing for the 1^st defendant and defendants 2 and 3 having been set exparte and upon hearing arguments of learned Counsels for both the parties and upon perusing the material on records, this Tribunal delivered the following:

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O R D E R

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This Securitisation Application was filed on 02.01.2025 seeking to declare that the applicant who is in possession and enjoyment of the tenanted premises at second floor northern side bearing Door No.31/1068 D1 (New No.46/1128-B6) of the secured asset on the basis of agreement cannot be summarily evicted and to declare that the tenancy of the applicant is continuing from the year 2022 and till such time the tenancy is determined upon repayment of amount of Rs.5,00,000/- and to restrain the 1^st defendant from proceeding against the applicant and to direct the defendants 2 and 3 to pay costs of this proceedings to the applicant.

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The defendants 2 and 3 availed housing term loan facility of Rs.114.50 Lakhs on 12.03.2020 and home improvement loan facility of Rs.10 Lakhs on 13.08.2020 from the 1^st defendant bank. On 13.03.2020 the above said credit facilities has been inter alia secured by Equitable mortgage of an extent of 2.22 Ares of land with building therein situated in Re. Sy. No.985/165, Cheranelloor village, Kanayannur Taluk, Ernakulam District, belonging to the defendants 2 and 3.

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According to the 1^st defendant bank, since the defendants 2 and 3 defaulted in repayment of the loan account, their loan accounts was classified as Non-Performing Asset on 10.02.2023. Annexure-B1 demand notice was issued to them calling upon them to repay the outstanding loan due within a period of 60 days from the date of receipt of the demand notice. It appears that the applicants neither sent any objection/representation to the demand notice nor did they clear off their liability due to the defendant bank.

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Therefore, Annexure-B2 possession notice dated 29.05.2023 was issued for symbolically taking physical possession of the secured asset. Subsequently, the 1^st defendant bank approached the Chief Judicial Magistrate Court, Ernakulam and filed Annexure-A1 application and affidavit under Section 14 (1) of the SARFAESI Act, 2002. Subsequently the matter was made over to the Additional Chief Judicial Magistrate Court (MPs/MLAs), Ernakulam. Order came to be

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Page 2 of 10

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SA No. 3 of 2025

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passed appointing Advocate Commissioner for taking physical possession of the secured asset. The Advocate Commissioner issued notice Annexure-A5 to the applicant informing him that he would take physical possession of the secured asset on or after 06.11.2024. The applicant who claims to be in possession and enjoyment of the secured asset as the tenant has filed this SA seeking for the reliefs stated supra.

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The counsel appearing for the applicant submitted that the applicant entered into agreement Annexure-A2 dated 19.10.2023 for a period of 11 months with the 2^nd defendant for occupation of the flat bearing Door No.31/1068 D1 (New No.46/1128 B6) of the secured asset as the tenant on payment of advance rent of Rs.5,00,000/- to one Mr. Justine who received the same on behalf of the 2^nd defendant on 14.12.2023, since the 2^nd defendant is residing far away from the secured asset. The above said amount which has to be considered as payment of rent in advance is refundable upon termination of tenancy or upon vacating the premises. The renewal of the agreement beyond 11 months from 19.10.2023 could not be completed since the 2^nd defendant kept on delaying the execution of the renewal agreement.

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The counsel for the applicant submitted further that the Advocate Commissioner who visited the property has reported in his interim report Annexure-A4 that the tenants are occupying the premises and that the 1^st defendant has filed the application in MC No.618/2024 suppressing the tenancy of the applicant in the property and that since the tenancy is for a period of 11 months, the agreement is not compulsorily registerable under the Registration Act and that when tenancy is admitted by both the parties, the tenant is not entitled to be evicted from the rented premises even though the lease agreement was not registered u/s 107 of Transfer of Property Act as laid down by the Hon'ble High Court of Madras in Indian Bank Vs. M/s.Nippon Enterprises South [AIR 2011 MAD 238 ] and that therefore, the SA may be allowed as prayed for.

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The counsel appearing for the 1^st defendant bank submitted that the alleged agreement Annexure-A2 which is not a genuine agreement was executed after the creation of the mortgage by the defendants 2 and 3 over the secured asset and that the applicant is not a tenant of the secured asset and that this SA has been filed at the instigation of the defendants 2 and 3 in order to defeat the securitization measures. Since the tenure of the alleged agreement Annexure-A2 having been lapsed, the applicant cannot claim tenancy over the secured asset beyond 18.09.2024. Annexure-A2 is not sufficiently stamped.

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Page 3 of 10

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SA No. 3 of 2025

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The counsel for the 1^st defendant submitted further that the alleged money transaction between the applicant and the defendants 2 and 3 is a cooked-up story for the purpose of the case. Since Annexure-A2 agreement is not a registered document, the applicant cannot claim the right of tenancy over the secured asset and that he could be considered only as the tenant-in-sufferance and that the operation of the Rent Act could not be extended to a tenant in sufferance vis-à-vis the SARFAESI Act 2002 as laid down by the Hon’ble Supreme Court in Hemraj Ratnakar Salian Vs. HDFC Bank Ltd. and ors. (Criminal Appeal Nos.843-844 of 2021) and Bajarang Shyamsunder Agarwal Vs. Central Bank of India and ors. (Criminal Appeal No.1371 of 2019) and that therefore the SA may be dismissed with cost to the 1^st defendant bank.

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The issues which arise for consideration before this Tribunal are as follows:

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i) whether Annexure-A2 could be considered as a lease agreement;

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ii) whether Annexure-A2 is a legally valid agreement; iii) whether the applicant is in possession and enjoyment of the secured asset as the tenant of the defendants 2 and 3;

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Issues (i) to (iii) – The applicant relies upon Annexure-A2 agreement in order to prove his contention that he is the tenant of the secured asset. A perusal of the recitals of Annexure-A1 would reveal the fact that it is not a genuine lease agreement for the following reasons.

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(i) Though the applicant has averred in the SA that a sum of Rs.5,00,000/- was paid on 19.10.2023 and the balance of Rs.50,000/- was paid on 14.12.2023 to the 2^nd defendant through Mr. Justine, no document has been produced to prove the above transaction.

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(ii) Though it is recited that in one paragraph that the second floor building will be let to the 2^nd party for a period of 11 months, it is recited in another paragraph that the building has been given to the second party as a mortgage for accommodation;

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(iii) No documents such as Voter ID, Ration Card, cooking Gas connection have been produced in order to show that the applicant is in occupation of the secured asset.

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(iv) No proof for payment of electricity and water charges by the applicant as recited in Annexure-A2 agreement, has been produced.

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Page 4 of 10

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SA No. 3 of 2025

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(v) The tenure of Annexure-A2 agreement is for a period of 11 months which is said to have been executed on 19.10.2023, but the agreement was not renewed thereafter.

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(vi) The contention of the applicant that Annexure-A2 agreement was not renewed as the 2^nd defendant kept on delaying the signing of the agreement cannot be believed since no action has been initiated against him.

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(vii) Annexure-A2 agreement is not a registered document.

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Therefore, the claim of the applicant that he is in occupation and possession of the secured asset as the tenant pursuant to Annexure-A2 agreement is liable to be rejected as false.

¶44

In Indian Bank Vs. M/s.Nippon Enterprises South [AIR 2011 MAD 238 ] relied on by the counsel for the applicant, the unregistered lease deed was sought to be relied upon by the tenant in a proceeding initiated by the Bank under the provisions of the SARFAESI Act. It was contended by the tenant that since he had been a tenant in bonafide occupation, the Bank could not take possession of the premises under the provisions of SARFAESI Act. The Hon'ble High Court of Madras held as follows:

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“The reliance sought to be placed by tenant over unregistered lease deed was only for a collateral purpose to show that the tenant was inducted into the premises right from the year 1992 and thereafter by an unregistered lease deed from the year 2000 he had been in possession of the premises. When lease was a transfer of a right to enjoy the property and such transfer can be made expressly or by implication, the mere fact that an unregistered instrument came into existence would not stand in the way of court to determine whether was in fact a lease otherwise than through such deed.”

¶46

In the present case at hand, the applicant has failed to establish his case that he is tenant of the secured asset. The Advocate Commissioner who visited the secured asset has not specifically stated in his interim report Annexure-A4 that applicant was the tenant of the secured asset. Therefore, the above cited judgment has no application to the facts of the present case.

¶47

In Hemraj Ratnakar Salian Vs. HDFC Bank Ltd. and ors. (Criminal Appeal Nos.843 - 844 of 2021) relied on by the counsel for the 1^st defendant the Hon’ble Supreme Court has held as follows:

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Page 5 of 10

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SA No. 3 of 2025

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“There is a serious doubt as to the bonafide of the tenant, as there is no good or sufficient evidence to establish the tenancy of the appellant. The borrowers have not claimed that any tenant is staying at the secured asset. The appellant has pleaded tenancy from 12.06.2012 to 17.12.2018. This is not supported by any registered instrument. He is a tenant-insufferance, therefore he is not entitled to any protection of the Rent Act. Further 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 u/s 13 (2) of the SARFAESI Act.

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15 In Bajarang Shyamsunder Agarwal Vs. Central Bank of India and ors. (Criminal Appeal No.1371 of 2019) relied on by the counsel for the 1^st defendant the Hon’ble Supreme Court has held as follows:

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“The bonafide of the tenancy has doubtful as there was no good or sufficient evidence to establish the tenancy in the first place. Th operation of the Rent Act could not be extended to a tenancy- in-sufference vis-à-vis the SARFAESI Act, due to the operation of Sec.13 (2) r/w Sec.13 (13) of the SARFAESI Act 2002.”

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In the present case at hand, no reliable document has been produced by the applicant to prove his tenancy in the secured asset. The 2^nd defendant who is said to have entered into Annexure-A2 agreement with the applicant has not come forward before this Tribunal stating that the applicant is the tenant of the secured asset. It is pertinent to mention herein that though the 2^nd defendant received Annexure-B1 demand notice, he did not send any objection/ representation stating that the secured asset is under the tenancy of the applicant. Annexure-A2 is not a registered lease agreement which was executed after issuance of Annexure-B1 demand notice. Therefore, the dictum laid down in the aforesaid two judgments of the Hon’ble Supreme Court is squarely applicable to the facts and circumstances of the present case.

¶54

This Tribunal having considered the above facts of the case and submission of both sides’ counsels comes to a conclusion that Annexure-A2 agreement is not a genuine and valid document and that the applicant is not the bonafide tenant of the secured asset and that this SA has been filed at the instance of the defendants 2 and 3 pursuant to initiation of the measures by the 1^st defendant bank for taking physical possession of the secured asset.

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Page 6 of 10

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SA No. 3 of 2025

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In view of the foregoing reasons, this Tribunal holds that the SA which is devoid of merits is liable to be dismissed.

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Resultantly, S.A No. 3 of 2025 stands dismissed with cost to the 1^st defendant bank.

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Dictated to Steno, taken down, transcribed, typed by him, corrected and pronounced by me in the open court on this the 7^th day of July, 2025.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 7 of 10

SA No. 3 of 2025

S C H E D U L E

District : Ernakulam Sub District : Ernakulam Taluk : Kanayannur Village : Cheranellor Desom : Vaduthala Old Sy. No. : 165 Re. Sy. No. : 985 Extent : 2.22 Ares

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Description

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All that is part and parcel of land having an extent of 2.22 Ares of land with multistoried building therein with tenanted premise of the applicant located at second floor (northern side) bearing Door No.31/1068-D 1 (New No.46/1128-B6), situated in old Sy. No. 165 with Re. Sy. No.985, Cheranellor Village, Kanayannur taluk, Ernakulam District belonging to the 2^nd defendant and 3^rd defendant and obtained by them as per sale deed No.953/2020 of Ernakulam SRO dated 13.3.2020 and more particularly detailed therein.

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Boundaries

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East	: Property of Joseph
North	: Road
West	: Road
South	: Property of Shyamala

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(Su. WILLYAHM) PRESIDING OFFICER

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Page 8 of 10

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SA No. 3 of 2025

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List of documents filed by the Applicant along with the S.A.

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Sl. No.	Date		Particulars
1.	---	True copy before the Magistrate Ernakulam.	of MC No.618/2024 filed Additional Chief Judicial Court (MPs/MLAs)	Annexure-A1
2.	19.10.2023	True copy Englishtran	of the agreement with slation.	Annexure-A2
3.	22.10.2024	True copy Advocate Co and 3.	of the notice issued by mmissioner to defendants 2	Annexure-A3
4.	30.12.2024	True copy theinterim	of the typed-out version of report.	Annexure-A4
4.	30.12.2024	True copy possession issued in before the Magistrate Ernakulam.	of notice with date of shown on 06.11.2024 MC No.618/2024 pending Additional Chief Judicial Court (MPs/MLAs),	Annexure-A5

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List of documents filed by the 1^st defendant along with the written statement

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Sl. No.	Date	Particulars
1.	13.02.2023	True copy of demand notice and acknowledgement cards.	Annexure-B1
2.	29.05.2023	True copy of the possession notice	Annexure-B2
3.	31.05.2023	True copy of the paper publication in Deshabhimani newspaper, Kochi edition and The New Indian Express newspaper,Kochiedition.	Annexure- B2(a)
4.	---	True copy of the photographs evidencing affixture on the secured asset.	Annexure- B2(b)

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Page 9 of 10

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SA No. 3 of 2025

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5.	04.06.2024	True copy of MC No.306 of 2023 before	Annexure-B3
		the Chief Judicial Magistrate Court, Ernakulam.

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(Su. WILLYAHM) PRESIDING OFFICER

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Mj/

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Page 10 of 10

Rosely Thomas v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

Rosely Thomas v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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Cases cited

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