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Karnataka High Court · body

2010 DIGILAW 581 (KAR)

Basavaraju v. Poornima S. R.

2010-04-23

V.JAGANNATHAN

body2010
JUDGMENT : The two appeals are disposed of together by this common judgment as the issues involved are one and the same. The order passed on I.A. No. 1 by the Trial Court rejecting the said I.A. and directing the appellants to approach the Debt Recovery Tribunal is called in question by the plaintiffs in these appeals. 2. The submission of learned Counsel for the appellants Sri. P.N. Hegde is that the respective appellants, are the tenants in the suit schedule properties and they found respondent 2-Bank having affixed notice on the premises indicating that possession will be taken over by the Bank following the first defendants having failed to repay the loan obtained by him from the second defendant-Bank. In the suit filed for bare injunction, the respective appellants filed I.A.No. 1 seeking an order of temporary injunction against the respondents. The Trial Court dismissed the said I.A. On the footing that the remedy lies before the Deputy Recovery Tribunal by way of an appeal under Section 17 of the Securitisation and Reconstruction of Financial and Enforcement of Security Interest Act, 2002. 3. The learned Counsel for the appellants submits that the appellant had interim order in their favour during the pendency of the suit and subsequently, when I.A. No. 1 was heard and when it came to be rejected, the respondent-Bank took possession of the respective suit properties by forcibly throwing out the tenants i.e., the plaintiffs, despite their belongings were still found in the respective suit properties. Relying on a ruling of this Court in the case of Hutchison Essar South Limited, Bangalore v Union Bank of India and Another1 2008(3) Kar. L.J. 106: ILR 2007 Kar. 4362, the submission made by the learned Counsel for the appellants is that, if a bona fide third party is in occupation of the second asset, the bank in question is not entitled to dispossess such a person without taking recourse to law. Hence, the order of the Trial Court be modified and the appellants be put back in possession of the respective suit schedule properties till the appellants approach the Debt Recovery Tribunal by way of appeals. 4. On the other hand, learned Counsel for respondent 2-Bank Sri. Hence, the order of the Trial Court be modified and the appellants be put back in possession of the respective suit schedule properties till the appellants approach the Debt Recovery Tribunal by way of appeals. 4. On the other hand, learned Counsel for respondent 2-Bank Sri. H.J. Krishnamurthy supported the order of the Court below by contending that the Trial Court had no jurisdiction in respect of the matters which are covered by the Securitisation Act and moreover, it is only by invoking Sections 13 and 14 of the Act, the respondent-Bank took possession of the suit schedule properties and, as such, no interference is called for in respect of the impugned order. 5. Having thus, heard both sides and after going through Sections 13 and 14 of the Securitisation Act, 2002, the said provisions are silent as to the position where a person is in occupation as a bona fide tenant in the premises in question. This Court, in the case of Hutchison Essar South Limited, has held at paragraph 23 thus: “23. However, if the secured asset is in the possession of a bona fide lessee or tenant, he cannot be thrown out by invoking Sections 13 and 14 of the Securitisation Act. In taking this view, I am fortified by the decisions of Punjab and Haryana High Court in the case of Prem Gupta v Bank of Maharashtra and Others, AIR 2007 (DOC) 174 (P and H) 45. The decisions in the case of C.B. Gautam v Union of India and Others, (1993)1 SCC 78 ; M/s.Ghatge Patil Transports Limited v Appropriate Authority and Others, 1996(41) Kar. L.J. 471 (HC) (DB); M/s. Tata Consulting Engineers, Bangalore and Another v Union of India and Others, 1994(38) Kar. L.J. 28 (HC) and Adair Dutt and Company (India) Private Limited v Appropriate Authority, Income-tax Department, (2003)263 ITR 673 (Mad.) (DB), rendered while examining the provisions of Income-tax Act, 1961 are of grant guidance in resolving the present controversy. What is contemplated under Sections 13 and 14 of the Securitisation Act is only symbolic possession and not actual possession, if a bona fide third party is in occupation of the secured asset. It is also open to the mortgage-Bank to sell the assets with the tenancy intact. What is contemplated under Sections 13 and 14 of the Securitisation Act is only symbolic possession and not actual possession, if a bona fide third party is in occupation of the secured asset. It is also open to the mortgage-Bank to sell the assets with the tenancy intact. Possession notice under Section 13(4) of the Securitisation Act is like an attachment notice, but it does not entitle the Bank to dispossess a person in possession of the mortgaged property. However, if the banker or purchaser of the secured asset has to take the actual possession, the same has to be in accordance with the due process of law only. This is the considered view taken by Patna High Court in the case of Abhay Kumar Pandey and Others v State of Bihar and Others, AIR 1997 Pat. 160 , while dealing with the issue of possession of the property mentioned under Section 29 of the State Financial Corporation Act, 1951”. 6. It is, therefore, clear from the aforesaid view taken by this Court that if the Bank or purchaser of the secured asset has to take actual possession, same has to be done in accordance with due process of law only. The Act also provides for an appeal under Section 17 of the Act to be preferred by any person aggrieved by any of the measures taken as is referred to in sub-section (4) of Section 13 of the Act. Therefore, it is clear that every such aggrieved person has a right to appeal to the Debt Recovery Tribunal. 7. Till the appeals of the appeals are heard and disposed of by the Dept Recovery Tribunal in accordance with law, it is just and proper to meet the ends of justice that the appellants are put back in possession of their respective premises. The appellants are given time till 20th of May, 2010 to prefer appeals before the Debt Recovery Tribunal and till such time, the Bank shall not further precipitate the matter. The Bank is also at liberty to contest the matter before the Debt Recovery Tribunal insofar as the eviction of the appellants from the suit schedule properties is concerned. The appeals stand disposed in accordingly.