Dismissed

Moideen Koya aged 67 years Son of. Saidootty, v. Ms Pegasus Assets Reconstruction CompanyPvt Ltd.

DRT24 Mar 2026SA/498/2025

Case brief

AI extract

What is this about?

Debts Recovery Tribunal dismissed an application filed by occupants challenging possession measures initiated by an Asset Reconstruction Company. The tribunal held that the documents established unregistered licenses, not lease agreements, and found no valid tenancy rights to halt possession.

What the court decided

AI extract

Moideen Koya aged 67 years Son of. Saidootty, versus Ms… — Banking and Recovery | DRT (2026)

¶1

Fair Order

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IN THE DEBTS RECOVERY TRIBUNAL - 1 AT ERNAKULAM

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DATED THIS 24^th DAY OF MARCH, 2026

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

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S.A No. 498 of 2025

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Between

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Moideen Koya, S/o. Saidootty, M/s. Mix Max Kids Toys,

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Foot Wears, Thamarassery,

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Now residing at Mannil Thodukayil (H) Vavad P.O., Koduvally, Thamarassery,

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Kozhikode -673 572.

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Mohemmed T.,

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S/o. Ahammed Kutty Haji, Farah Boutique, Thamarassery, Now residing at Thattoor House, Karingamanna, Thamarassery P.O. Kozhikode – 673 573.

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Muhammed Sinan, S/o. Abdu Rahiman, M/s. Xaomi MI, Thamarassery, Now residing at Kurunthotti Kandi House, Raroth Amsom, Thamarassery Taluk Kozhikode – 673 573.

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Dinoop D.D., S/o. D.D. Ivas, Varnam Studio, Karadi, Thamarassery P.O, Kozhikode, Now residing at Kurunthotti Kandi House, Raroth Amsom, Thamarassery Taluk Kozhikode – 673 573.

--- Applicants

And

SA No.498 of 2025

Authorized Officer and Senior Manager, M/s. Pegasus Assets Reconstruction Company Pvt. Ltd.No.3/970 B-2, Uzhizeli Towers, 1^st Floor,

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Subhash Chandra Bose Road, Ponnurunni, Vyttila,

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Cochin – 682 019.

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M/s. Sooryadev Marketing & Exporters, 19/1172, Near Chalapuram Post Office, P.O. Chalapuram, Kozhikode – 673 002.

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M. Neena, W/o. Prasanth Kumar, Managing Partner, M/s. Sooryadev Marketing & Exporters, Sinipuri, Panthalayini, Koyilandi, Kozhikode-673 003.

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V.K. Manoj Kumar, S/o. Gopalakrishnan, Partner, M/s. Sooryadev Marketing & Exporters, Vattakandiyil House, Opp. KSRTC Bus Stand, Thamarassery, Kozhikode-673 573.

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Smitha V.K., W/o. Jayaprakash, Vattakandiyil House, Opp. KSRTC Bus Stand, Thamarassery, Kozhikode-673 573.

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Prasanthkumar T.C., S/o. Premanathan, Sumipuri, Panthalayini, Koyilandi, Kozhikode -673 305.

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--- Defendants

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This Securitization Application coming on 23.01.2026 for final hearing before me in the presence of Mr. Abu Mathew, Counsel appearing for the Applicants and Mr. Renjith R., Counsel appearing for the defendants and upon hearing arguments of learned Counsels for both the parties and upon perusing the material on records, this Tribunal delivered the following:

O R D E R

Page 2 of 10

SA No.498 of 2025

This Securitisation Application was filed on 28.06.2024 seeking to set aside Annexure-A11 order and Annexure-A12, A12(a), A12(b) and A12 (c) notices issued by the Advocate Commissioner and all steps and all measures initiated by the 1^st defendant company for taking possession of the properties and to declare that Annexure-A1 to A4 lease deeds are legally valid and that the applicants shall not be evicted from the scheduled properties other than due process of law under the provisions of Buildings Lease and Rent Control Act and allow cost of the proceedings.

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The applicants are neither borrowers nor guarantors to the credit facilities availed by the defendants 2 to 5 from the 1st defendant which is the Asset Reconstruction Company. The applicants, who are the third parties to the measures initiated by the 1^st defendant under the SARFAESI Act, 2002 and the Rules made there under, claim that they are the tenants of the SA subject matter of the properties which are the secured assets.

¶33

It is not in dispute that the defendants 2 to 5 availed cash credit facility for a sum of Rs.80,00,000/- from the 1^st defendant. The defendants 4 and 5 stood as guarantors to the aforesaid credit facility by creating equitable mortgage upon their immovable property by deposit of title deeds in favour of the 1st defendant. Since the defendants 2 to 5 defaulted in repayment of the outstanding loan due, the loan account came to be classified as NPA. Therefore, measures were initiated under the SARFAESI Act and the Rules made there under against the secured asset.

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The 1^st defendant approached the Chief Judicial Magistrate Court, Kozhikode and filed application and affidavit in MC No. 1153/2024. Annexure A11 order dated 22.05.2024 came to be passed appointing Advocate Commissioner to take physical possession of the secured asset. The Advocate Commissioner issued notices Annexure-A12, 12(a), 12(b) and 12(c) to the applicants separately informing them that he would take physical possession of the secured asset. The applicants having aggrieved against the aforesaid measures, filed this S.A before this Tribunal claiming that since they have been put in possession of the secured assets by virtue of lease agreements, Annexure-A1, A2, A3 and A4 executed between them and the 2^nd defendant.

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The counsel appearing for the applicants submitted that applicants have taken the S.A schedule property on lease pursuant to execution of Annexures A1 to A4 lease agreements between them and Smt.Malathi Amma and that they have been conducting business in the leased premises and paying rent to the defendants 2 to 6 since

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Page 3 of 10

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SA No.498 of 2025

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then. The 1st defendant had admitted the tenancy of the applicants in the SA schedule property in Annexure A6 application filed in IA No.51/2020 in DRC No.199/2017 in OA No.135/2013 on the file of the Recovery Officer of this Tribunal and also in Annexure A7 argument note filed by the counsel for the 1^st defendant in the above IA No.51/2020.

¶39

The counsel for the applicant submitted further that during the pendency of Appeal No.1/2022 filed by them before this Tribunal against the order of the Recovery officer of this Tribunal, the 1^st de initiated measures under Section 14(1) of the SARFAESI Act, 2002 for taking physical possession of the SA schedule property and Annexure A11 order was passed by the Chief Judicial Magistrate Court, Kozhikode for taking physical possession of the secured asset. The Advocate Commissioner issued Annexure A12, 12(a), 12(b) and 12(c) notices to the applicants stating that he would take physical possession of the properties on 20.06.2024. Since the applicants are in occupation of the SA schedule properties as the tenants, they shall not be evicted pursuant to Annexures A11 order and A12 to A12(c) notices.

¶40

The counsel for the applicants submitted further that the learned Recovery Officer of DRT-1 Ernakulam without considering the contention of the applicants passed order Annexure-A9 order. The 1st defendant colluded with other defendants in order to demolish the building in the S.A scheduled properties after evicting the applicants. The relationship between the applicants and the original loanee is governed by the provisions of the Rent Control Act. Hence the provisions of Recovery of Debts and Bankruptcy Act, 1993 cannot be invoked to evict the applicants from the SA scheduled properties. Therefore, the SA may be allowed as prayed for.

¶41

The counsel appearing for the 1^st defendant submitted that this S.A. is not maintainable and that defendants 4 and 5 have mortgaged the secured asset by deposit of their title deeds with the 1^st defendant. Since defendants 2 and 5 defaulted in repayment of the outstanding loan due, measures were initiated for taking physical possession of the secured asset. The applicants are not the tenants of the secured assets. Annexures A1 to A4 are not the lease agreements and the applicants are having only right of license which is revocable by the licenser. License is a permission granted by the owner to a licensee to do something on the owner’s property.

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The counsel for the 1st defendant submitted further that there is no lawful tenancy over the secured asset. No proof has been filed to show the statutory registration of the shops in the name of the applicants. Annexures A1 to A4 are the fraudulent documents created by the applicants at the instance of the defendants 2 to 6 with

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Page 4 of 10

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SA No.498 of 2025

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intention to delay the measures for taking physical possession of the secured asset. The 1^st defendant never admitted the tenancy right of the applicants’ interest in the DRC proceedings pending before the learned Recovery Officer of this Tribunal. The Hon’ble Apex Court has held in Harshad Govardhan Sondagar vs. IARC and others (2014 (6) SCC) that as per Section 107 of the Transfer of Property Act, a lease of immovable property from year to year or any term exceeding one year or reserving a yearly rent, can be made only through a registered agreement. Since Annexures A1 to A4 are not the registered deeds, these documents are invalid and the applicants are not entitled to challenge the measures initiated by the 1^st defendant. Therefore, the S.A. may be dismissed.

¶46

The applicants rely upon Annexures-A1 to A4 in order to prove their tenancy in the secured assets. Annexure-A1 agreement was executed between Smt. Malathi Amma and the 1st applicant. Annexure-A2 agreement was executed between Sri.V.K.Manoj Kumar, the (4th defendant), Smt. Smitha (5th defendant) and the 2nd applicant. Annexure A3 agreement was executed between the defendants 4, 5 and the 3rd applicant. Annexure A4 agreement was executed between Smt. Malathi Amma and Mr.Dinoop, 4th applicant and two others.

¶47

A perusal of Annexures A1 to A4 recitals of the agreements pointed out the nature of the deed as the license agreement and not lease agreement . Further, Annexure-A1 to A4 agreements begins with the recital as license agreement . There is also clear recital in Annexures A1 to A4 which is read as follows:-

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“shop room more fully described in the schedule will always be in the possession of the 1^st party” (Owner of the property). “this is just a simple license which does not give any other right”.

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It is also recited in Annexures A1 to A4 that the license fee is fixed for 11 months.

¶50

Therefore, it is established from the aforesaid recitals of Annexures A1 to A4 that these are not the lease agreements and there is no relationship of landlord and the tenant and there is also no tenancy over the secured assets as claimed by the petitioners. Even assuming for argument’s sake, that Annexure A1 to A4 are the lease agreements, these documents are not valid documents due to the reason that these documents were not renewed after the expiry of 11 months from the date of execution and the documents were not registered.

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Page 5 of 10

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SA No.498 of 2025

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It cannot be disputed that in Annexure A6 affidavit filed by the 1^st defendant in DRC No.199/2017 on the file of the Recovery Officer of this Tribunal, it is averred that the applicants herein are the tenants. In Annexure A7 argument notes filed by the 1^st defendant in the above DRC proceedings, it is averred that, the tenancy agreement even if it was renewed after 04.11.2011 without the consent of the mortgagor itself is illegal as per Section 17 (4) of the SARFAESI Act and that hence the 1^st tenant is not entitled to continue in the OA schedule property, as Annexure A1 tenancy agreement is an unregistered document. But, the contention of the 1st defendant in the written statement is that he never admitted any tenancy right of the applicants and that the mere submission of the word tenant or tenancy in Annexure-A6 and A7 will not attribute any rights as admission. A perusal of Annexure-A6 and A7 shows that the 1st defendant never admitted that the tenancy of the applicants in the secured assets what the 1st defendant wanted to mean is that the applicants have claimed that they are the tenants of the properties. In any event, Annexure-A1 to A4 which is relied on by the applicants reveals the nature of the document as license agreements which is entirely different from the nature of the lease agreements. Therefore, this Tribunal does not find any merit in the above contention of the applicants that the 1st defendant has admitted the applicants’ tenancy in the secured asset.

¶54

The 1^st defendant has disputed the validity of the tenancy in the secured asset on the ground that license agreement was not renewed and that it was not registered. Hence this Tribunal does not find any force in the contention of the applicants that 1^st defendant has admitted the tenancy in the secured asset. Annexures A1 to A4 cannot be considered as the lease agreement so as to confer the status of the tenancy upon the applicants in respect of the secured asset. Further, no reliance can be placed upon Annexures A1 to A4 for the sole reason that these are unregistered documents. In Harshad Govardhan Sondagar vs. IARC and others (2014 (6) SCC) relied on by the counsel for the 1^st defendant, the Hon’ble Apex Court has categorically held that as per Section 107 of the Transfer of Property Act, a lease of immovable property from year to year or any term exceeding one year or reserving a yearly rent, can be made only through a registered agreement.

¶55

In Annexure-A1 to A4 agreements, there is no recital with regard to the landlord and the tenants and also with regard to payment of monthly rent. No proof has been produced by the applicants for payment of rent in order to prove their tenancy over the secured assets. It is pertinent to mention that in Annexure-A2 agreement, there is a clear recital which reads as follows:

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Page 6 of 10

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SA No.498 of 2025

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“Second party has the right to use the shop rooms more particularly described in the schedule hereunder only as a licensee and he does not have any possession right ”.

¶59

Once it is established that Annexure-A1 to A4 are not lease agreements and that applicants are not the tenants in the secured assets, then their claim that they cannot be evicted from the secured asset except under due process of law is unsustainable. Therefore, they are not entitled to challenge the measures initiated by the 1st defendant for taking physical possession of the secured assets.

¶60

In view of the foregoing reasons, this Tribunal holds that the applicants are not entitled to get the reliefs sought for in this SA.

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Resultantly, S.A No.498/2025 stands dismissed. However, there shall be no order as to costs.

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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 24th day of March, 2026.

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(Su. WILLYAHM) PRESIDING OFFICER

Mj/

Page 7 of 10

SA No.498 of 2025

S C H E D U L E

District : Kozhikode Sub District : Thamarassery Town Taluk : Kozhikode Village : Raroth Re. Sy. No. : 21 Sub Division : 2 Extent : 27 cents

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Description

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All that piece and parcel of the land and building having an extent of 27 cents in Re. Sy. No.21/2 in Raroth Village, Kozhikode Taluk, Kozhikode District together the property is seen in the name of V.K. Manoj Kumar and Smitha V.K.

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Boundaries

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East : National Highway 212 (Kozhikode Wayanad road) North : Property of Mattummal Ayisha and P.K.Balakrishnan West : Property of Sivasankaran South : Property of Sivasankaran

(Su. WILLYAHM)

PRESIDING OFFICER

Page 8 of 10

SA No.498 of 2025

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

¶78

Sl. No.	Date	Particulars
1.	05.04.2006	True copy of the lease agreement executed by Malathy Amma and the 1^st applicant.	Annexure-A1
2.	---	English translation of Annexure-A1	Annexure-A1a
3.	26.08.2008	True copy of the lease agreement executed by Malathy Amma and the 2^nd applicant.	Annexure-A2
4.	---	English translation of Annexure-A2	Annexure-A2a
5.	28.01.2020	True copy of the lease agreement executed by the 4^thand 5^thdefendants withthe 3^rd applicant.	Annexure-A3
6.	---	English translation of Annexure-A3	Annexure-A3a
7.	08.03.2008	True copy of the lease agreement executed by the 4^thapplicant and Malathy Amma.	Annexure-A4
8.	---	English translation of Annexure-A4	Annexure-A4a
9.	06.01.2020	True copy of the show cause notice issued by the Recovery Officer of DRT-1 Ernakulam.	Annexure-A5
10.	31.12.2019	True copy of the petition in IA No.51 of 2020 in DRC No.199/2017 in OA No.135/2013 on the file of DRT-1 Ernakulam.	Annexure-A6
11.	13.01.2021	True copy of the argument note filed in IA No.51/2020 in DRC No.199/2017 in OA No.135/2013 by the counsel for the 1^st defendant.	Annexure-A7
12.	05.11.2021	True copy of the order passed in IA No.51/2020 in DRC No.199/2017 in OA No.135/2013 by the Recovery OfficeroftheDRT-1 Ernakulam.	Annexure-A8
13.	27.12.2021	True copy of Appeal No.1/2022 filed by the applicants before the DRT-1 Ernakulam.	Annexure-A9

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Page 9 of 10

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SA No.498 of 2025

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14.	03.05.2024	True copy of the complai No.1153/2024 on the Judicial Magistrate Kozhi	nt fil file kode.	ed in of C	MC hief	Annexure-A10
15.	22.05.2024	True copy of the order No.1153/2024 by the Judicial MagistrateKozhi	passe file kode.	d in of C	MC hief	Annexure-A11
16.	05.06.2024	True copy of the notice Advocate Commissioner applicant.	issue to	d by the	the 1^st	Annexure-A12
17.	05.06.2024	True copy of the notice Advocate Commissioner applicant.	issue to	d by the	the 2^nd	Annexure- A12(a)
18.	05.06.2024	True copy of the notice Advocate Commissioner applicant.	issue to	d by the	the 3^rd	Annexure- A12(b)
19.	05.06.2024	True copy of the notice Advocate Commissioner applicant.	issue to	d by the	the 4^th	Annexure- A12(c)
20.	19.06.2024	True copy of the interim o W.P. (C) No. 22044 of Hon’bleHighCourt of Ker	rder 2024 ala.	passe by	d in the	Annexure-A13

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

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Sl.	Date	Particulars
No.
1.	18.03.2010	True copy of the letter of confirmation	Annexure-B1
		for mortgaging the title deeds by the 3^rd and 4^thdefendants.

(Su. WILLYAHM)

PRESIDING OFFICER

Mj/

Page 10 of 10

Moideen Koya aged 67 years Son of. Saidootty, v. Ms Pegasus Assets Reconstruction CompanyPvt Ltd.

Case brief

What is this about?

What the court decided

Moideen Koya aged 67 years Son of. Saidootty, v. Ms Pegasus Assets Reconstruction CompanyPvt Ltd.

Case brief

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What the court decided

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