Dismissed

Shish Pal Singh v. Bank of Maharashtra

DRT21 Jan 2025SA/290/2024

Case brief

AI extract

What is this about?

In a securitization application, the applicant challenging the bank’s possession sought protection of a lease tenancy. The court ruled that the lease challenged the bank’s right under the SARFAESI Act as it did not satisfy the conditions of Section 65-A of the Transfer of Property Act. The application was dismissed.

What did the court decide?

The Securitization Application was dismissed, leaving the respondent bank entitled to take physical possession.

Shish Pal Singh versus Bank of Maharashtra — Contract and Commercial Disputes | DRT (2025)

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IN THE DEBTS RECOVERY TRIBUNAL-II AT HYDERABAD

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DATED THIS THE 21ST DAY OF JANUARY, 2025

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PRESENT: SH. RAMESHWAR KOTHE, B.Com, L.LB. (Hons,), M.A. PRESIDING OFFICER

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SECURITISATION APPLICATION No. 290 OF 2024

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Between: Shish Pal Singh 5/o Sri Sanwal Ram Aged about 54 years Occ: business H. No. 1-143/11/5 Plot No. 53 & 54 Peerzadiguda Medcha I^- Ma lkajg i ri Dist. Telangana.

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.....Applicant.

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And

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Bank of Maharashtra Secunderabad Branch Head Office at Lokmangal 1501 Shivaji Nagar Pune, Maharashtra Rep by its Authorised Officer. 2. Narotham Kumar Yogi S/o lagdish Prasad Yogi Agedaboutj5 years Occ: Business, Plot No.B Flat No.^j03, 2'd Floor Jyothi Residency Rajendranagar, RR Dist. . .....Respondents. Counsel for the Applicant Mr. A. Vijay Kumar. Counsel for 1st Respondent Mr. G. Adrian Kiran Raj. Respondent No.2 Not Dressed.^ffi**

SA No. 290/2024

-: Q-8-D-EB:-

The^present Securitization^{Application is filed by the Applicants} u/s. 77 of the^{Securitisation and Reconstructlonof FinancialAssets} and Enforcement^{of SecurltyInterest Act, 2002 assailingthe action of} l't respondent bank to^{take physical possession of schedule property} through Advocate commissioner^{noticedated28.06.2024in} pursuance of orders passed by Hon'ble Chief^{lvletropolitan Magistrate,} lvledchal Malkajgiri, in Crl.M.P.243/^2024.

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The facts of the case as averred in the^{SA, in brlef,are that} applicant is the tenant of^{the subject property by virtue of registered} lease deed document bearing^{No.21212/2023dr.22 72.2023 valid for} 5 years with a monthly rental of^{Rs.21,000/- executedby 2nd} respondent. Applicant is in the^possession of^{the property and has} been regular in^payment of^{monthly rentals. Applicant was not aware} of the loan transaction and the^{mortgagecreated in favour of 1't} respondent bank. Applicant has not^{been servedwith anynotice} under the Securitisation^{proceedings.Applicant has beenable to get} a copy of^{possessionnotice} dated^{79.04.2024after lot of efforts.} Respondent No.2 land lord is not offering any^help to^{the applicantin} this regard. Applicant is fully^protected under the^{Rent ControlAct} and 1st respondent bank is not entitled to^{invoke the provisions of the} SARFAESI Act against the subject^property as^{per proposition} of^law laid down by tne Hon'ble Supreme Court in Vishal^{N. Kalsaria v. Bank} of India reported in⁽²⁰¹⁶⁾ 3 SCC⁷⁶² with^{emphasis on paragraphs} 25, 26 and 30. Hence the entire action of the^{respondent No.1 in} trying to take^{physicalpossession} of^{petitionschedulepropertyis} against law and liable to be set asiae,fui'>b

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SA No. 290/2024

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The 1st respondent bank filed reply statement. The submissions of the lst respondent bank as per the averments in the reply statement in brief, are that 2nd respondent is the borrower and he defaulted in repayment of loan as per agreed terms. The 2'd respondent created mortgage over the SA schedule^property for the loan availed by him on 26.10.2021. The lease deed^pressed into service is subsequent to the mortgage rights created in favour of 1't respondent bank behind its back. The demand notice dated 30.0t.2024 has been sent to the borrower through registered^post. The present SA is filed hand in glove with the 2nd respondentborrower to avoid physical^possession of the mortgaged^property. The citation relied on by the applicant is not applicable to his case. The measures under Section 14 are in accordance with the^provisions of the SARFAESI Act. Hence 1st respondent bank^prays for dismissal of SA.

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Applicant has not taken notice on the 2nd respondent and not pressed the SA against him. Hence, SA against the 2nd respondent was dismissed vide docket order dated 15.10.2024.

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Heard learned counsel for both^parties. Perused the^written arguments filed by the lst respondent bank and the material^placed on record.

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It is contended by learned counsel for the applicant that^the applicant is a legal tenant in the application schedule^{premises by} virtue of registered lease deed Doc.No,21212/2023 dated^22.L2.2Q23 for a^period of five^years with effect from 01.12.2023 i.e.,^{even prior} to issuance of demand notice dated 30.01.2024^issued by^{1st the} respondent bank under Sec.13(2) of the SARFAESI Act'^{He cannotbe} Awea.O 1/ ',''>'..',

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5A No. 290/2024

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evicted from the schedule^{property by invokingprovisionsof the} SARFAESI Act,^{2OO2 and withoutfollowingdue process of law. He} relied on^judgement of^{Hon'ble SupremeCourt in Vishal N Kalsaria} (supra) in support of his argument and^{sought to set aside to the} measures of the^{1st respondent bank for taking physical possession of} the schedule^proPertY.

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Per contra, learned counsel^{for the 1st respondent bank submits} that the applicant has^{no locusstandito question the measuresof the} 1st respondent bank being secured^{creditor. As entitled under Sec.14} of the Act to take^{physical possession of the securedasset created by} the borrower-2nd respondent, the^{lst respondent bank filed Crl. MP} No.243/2024 before learned Chief^{MetropolitanMagistrate, Medchal-} Malkajgiri District and the advocate^{commissionerappointed therein} issued vacate notice dated 28.06.2024.^{The lease agreementpressed} into service was subsequent to creation of^{mortgage created by the} 2nd respondent in favour of the 1st respondent^{as securityfor the loan} facility and was collusively entered into only to^{create hurdle in} recovery of debt. The^judgement cited by the^{applicant is not} applicable in his case. The 1st respondent bank^{is entitledto take} physical possession of the property. With these submissions, learned counsel sought for dismissal of the SA with costs.

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B. Now the points that arise for determination are:-

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, .Whether^{the Applicantmade out any valid ground} for^quashing the action of the respondent bank in taking^{physical possession} of the SA schedule properry? ^.) //X%'*fi

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iil To whanelieJ? (/

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5A No. 290/2024

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Point No. (il:

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Admittedly, applicant is a tenant and is in possession of the subject property on the strength of registered lease deed Doc.No.21212/2023 daled 22.12.2023 with effect from 01.12.2023 for five years at a monthly rent of Rs.21,000/- with an increase @5olo per annum. The demand notice was issued under Sec,13(2) of the Act,2002 on 30.01.2024 which is subsequent to the date of registered leased deed. The learned counsel for the applicant relied on^judgement of Hon'ble Supreme Court in Vishal N Kalsaria^(supra) in support of his contention that the applicant is a legal tenant and cannot be evicted without following due^process of law. It is trite law, as laid by the Hon'ble Supreme Court in Bajarang Shyamsunder Agarwal vs. Central Bank of India and Another [(2019.) 9 Supreme Court Cases 941 case, lhat "rf a tenancy under law comes into existence after the creation of a mortgage, but prior to the issuance of notice under Section 13(2) of the SARFAESI Act, it has to satisfy the conditions of Section 65-A of the TP Act."^(emphasis supplied)

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Sec.65-4 deals with Mortgagor's power to lease and the conditions stipulated therein, inter alia, are that lease shall be made in the ordinary course of management of the property concerned, shall reserve the best rent and no^premium or advance rent shall be payable, lease shall not contain a covenant for renewal, shall not take effect from a date not later than six months from lease date andⁱⁿ the case of a lease of buildings, whether leased with or without^the land on which they stand, the duration of the lease shall in^{no case} exceed three years. In the case on hand, the lease has been^entered for more than three years and the lease deed dated 22.t2.2023 contains a covenant for renewal. Accordingly, the lease deed^pressed

owu

SA No.290/2024

into service is defective^{on the above two counts and hence the same} cannot be treated as^{a valid document to preventthe 1st respondent} bank from^proceeding under^{Sec.14of the SARFAESI Act, 2002'} Accordingly, SA is liable to^{be dismissed'}

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In view of the above^{observations, Ifind that the applicant} failed to make out any^{valid ground to set asidethe action of the 1't} respondent bank for taking^{physical possession of the application} schedule^property under Sec.14^{of the Act, 2002 and accordingly, the} SA is liable to be dismissed.

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Point No.(ii):

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In the result, the SA^{fails and is hereby dismissed'}

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Consequently, Interlocutory^{Applications pending if any, shall} stand closed. No order as to^costs.

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Communicate a copy of this order to^{the parties concernedand} upload in the official website.

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(Typed to my dictotion by the Steno, signed ond^pronounced by^{me in the opencourt on} this the 21st doy of lonuory, 2025).

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' '^i':r\ ''--...,"'' (RAMESHWAR KOTHE) PRESIDING OFFICER

Shish Pal Singh v. Bank of Maharashtra

Case brief

What is this about?

What did the court decide?

Shish Pal Singh v. Bank of Maharashtra

Case brief

What is this about?

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