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2020 DIGILAW 101 (TS)

Anil Agarwal v. Kotak Mahindra Bank Limited

2020-01-24

K.LAKSHMAN, M.S.RAMACHANDRA RAO

body2020
JUDGMENT M.S.Ramachandra Rao, J. - The Background facts The petitioner was a lessee of property house bearing No.3-6-356, 3-6-357 and 3-6-358 situated at Basheerbagh, Hyderabad in an extent of 1500 sq. yds semi-finished building from 2010. The lease was for a period of 5 years. The landlord was the 3rd respondent in the Writ petition and he owned the said property. 2. The 3rd respondent had obtained a loan from the 1st respondent Bank and since the said amount was not paid, respondent Nos.1 and 2 initiated proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the Act') against 3rd respondent. 3. According to the petitioner, respondent Nos.1 and 2 were aware of the tenancy of the petitioner and he was allowed to continue. 4. Under the provisions of the Act, the 1st respondent Bank sold the property to a third party. The auction-purchaser was not initially impleaded in this Writ Petition, but later, the petitioner was directed to implead the said auction-purchaser as 4th respondent and he filed I.A.No.1 of 2019 to implead the auction-purchaser, which was allowed on 28-11-2019. 5. The Bank conducted a meeting on 19-07-2018 along with the auction purchaser for fixing the price of physical structures, which the petitioner wanted to remove himself as per the letter dt.12-07-2018 issued to the petitioner. Contentions of the petitioner 6. According to the petitioner, the auction purchaser sought a week's time to finalize the pricing for purchase of physical structures from the petitioner and till such time, at the request of the auction purchaser, the petitioner had agreed to defer the dismantling of physical structures. 7. Petitioner alleged that he waited till 31-07-2018 and sent an e.mail to the Bank seeking clarification and a response was given on 31-07-2018 by the Bank stating that they would revert to the petitioner on 2nd or 3rd of August, 2018; that on 03-08-2018, the Legal Officer of the 1st respondent Bank along with other staff called a meeting with the petitioner and threatened the petitioner as to how petitioner can remove the material since the building was already sold and since it was already under their control. 8. 8. Petitioner alleged that the Bank Authorities misbehaved with him and though the petitioner was not asking for extension of lease and only requesting to permit the petitioner to remove his equipment, the Bank Authorities did not relent. 9. He therefore filed the instant Writ Petition to declare the action of respondent Nos.1 and 2 in not permitting him to remove his belongings from the subject premises and to permit him to remove the same. The stand of the Bank 10. Respondent Nos.1 and 2 filed a counter-affidavit stating that the actual borrower is Deccan Chronicle Holdings Limited and not the 3rd respondent, that the 3rd respondent is only a security provider and corporate guarantor to the borrowing of the entity and the said entity had defaulted in payment of loan, for which steps were taken under the Act. It is also contended that the lease agreement of the petitioner was unregistered and unstamped and was not legally enforceable. 11. They stated that they had written various letters to the petitioner to remove his belongings, but the petitioner did not remove the same from the mortgaged property. One such letter dt.16-08-2017 is filed. 12. It is contended that petitioner requested, in the presence of Court Receiver and representatives of the 1st respondent, to give him 90 days time to remove the wooden materials/old machinery and at the request of the petitioner, the Bank granted 90 days time to the petitioner. 13. It is alleged that in spite of the said time being granted to him, the petitioner did not remove the materials lying in the subject property; that he wrote a letter dt.06-11-2017 stating that his father died and he was not able to remove the material from the mortgaged property and requested 10 to 15 days time; on the basis of the said request, time was granted to the petitioner upto 30-11-2017 to remove the materials from the mortgaged property, but the petitioner did not remove the same. 14. It is also alleged that petitioner filed Crl.M.P.No.3210/2014 in Crl.M.P.No.925/2014 stating that he is a lessee of the property and sought protection, but the Court rejected his plea. 15. 14. It is also alleged that petitioner filed Crl.M.P.No.3210/2014 in Crl.M.P.No.925/2014 stating that he is a lessee of the property and sought protection, but the Court rejected his plea. 15. It is contended that the petitioner cannot be permitted to keep his belongings in the premises since it was already sold by the Bank under the Act and physical possession was already handed over to the successful bidder as he has paid the full consideration to the same. 16. It is contended that the Bank had sold the property to the 4th respondent on 05-07-2018 and issued notice to the petitioner on 12-07-2018 asking him to remove the wooden material/old machinery lying in the premises, but to the shock of respondents, the petitioner started to remove the permanent structures like lift and other erections which are permanently fixed to the building and which are outside the mortgaged premises including elevation glass. It is stated that the petitioner was called on 19-07-2018 and was advised to stop removal of permanent structures and fixtures because the buyer of the property objected to the petitioner's dismantling of the permanent structures. 17. The petitioner, according to respondent Nos.1 and 2, was advised to initiate discussions with the buyer of the mortgaged property and that the petitioner had dismantled some of the structures and other miscellaneous fittings from the premises even when the present Writ Petition is pending before this Court. 18. It is stated that the petitioner did not produce any proof of ownership of the lift and elevation glass material in spite of being asked to produce the same and he was told by the Bank Officials that he cannot touch the permanent fixtures and he was asked to take away all movable furniture and scrap lying in the mortgaged premises. The stand of the 4th respondent 19. The auction-purchaser/4th respondent also filed a counter stating that he purchased the structure from respondent Nos.1 and 2 on 05-07-2018; that he requested respondent Nos.1 and 2 to permit the petitioner to remove his belongings from the property i.e. wooden materials and old machinery; and that respondent Nos.1 and 2, through letter dt.16-08- 2017 requested the petitioner to remove his belongings in the presence of Court Receiver. 20. It is also stated that respondent Nos.1 and 2 wrote to the petitioner on 12-07-2018 to remove the materials belonging to him by 19-07-2018. 21. 20. It is also stated that respondent Nos.1 and 2 wrote to the petitioner on 12-07-2018 to remove the materials belonging to him by 19-07-2018. 21. The 4th respondent contended that he did not prevent the petitioner from taking his belongings, and as per the letter dt.19-07-2018, negotiations were postponed. He denied that negotiations were postponed on account of dispute about finalization of amounts. 22. It is contended that petitioner started removing permanent structures i.e. lift motors and frames 4 Nos., elevation glass and fire equipment motors and other erections permanently fixed to the building on the pretext that they were installed by him, that 4th respondent had purchased the property from respondent Nos.1 and 2 in 'as is where is condition' and 4th respondent's objection for dismantling the permanent structures of the building is a valid objection. 23. It is alleged that petitioner purposefully did not remove the wooden furniture and on the pretext of removing them, he started removing the permanent structures attached to the building causing loss to the 4th respondent. He also filed order dt.20-08-2018 in Crl.M.P.No.3216/2014 in Crl.M.P.No.925/2014. The consideration by the Court 24. From the facts narrated above, it is clear that petitioner was in possession of the property, which was sold by respondent Nos.1 and 2 to the 4th respondent under the provisions of the Act, and that the sale in favour of 4th respondent occurred on 05-07-2018. 25. No doubt the petitioner was in occupation of the premises under an unregistered and unstamped lease deed and the Chief Metropolitan Magistrate, Hyderabad dismissed Crl.M.P.No.3210/2014 in Crl.M.P.No.925/2014 seeking deferment of execution of the warrant and declined to conduct enquiry with regard to the rights of the petitioner on the ground that lease of the petitioner is an unregistered and unstamped one. 26. But the contention of the petitioner is not that he has right to continue in occupation of the premises. His request is that he should be permitted to remove the fixtures/equipment which he had erected in the premises. 27. 26. But the contention of the petitioner is not that he has right to continue in occupation of the premises. His request is that he should be permitted to remove the fixtures/equipment which he had erected in the premises. 27. After the sale took place in favour of 4th respondent on 05-07-2018, a notice was issued on 12-07-2018 to the petitioner by the Bank asking him to make necessary arrangements to vacate the property on or before 19-07-2018 and warning the petitioner that he cannot claim any damages against the 1st respondent or its representatives if he did not remove the same on or before 19-07-2018. He was also informed that no further extension of time will be granted to remove all his belongings after 19-07-2018. 28. This indicates that petitioner was in possession of the subject property, since, even according to respondent Nos.1 and 2, his belongings were inside the subject premises. 29. The minutes of the meeting held on 19-07-2018 has been filed as Ex.P-2 by the petitioner. In the said minutes, which were signed by the representatives of respondent Nos.1 and 2 as well as the petitioner and 4th respondent, it is stated that petitioner had started removing items belonging to him which were lying in the premises, but the 4th respondent objected to the removal of the same and requested the Bank to convene a joint meeting with regard to the structures such as lift frame, fire safety equipment, elevation glasses, boundary wall and iron sheets erected inside and outside the building; that there was a claim by the petitioner that he was the person who erected them and he was entitled to dismantle them and in case the 4th respondent want to purchase the same, the petitioner was willing to offer the same to 4th respondent at the mutual agreed price. It is recorded in the said minutes that 4th respondent sought a week's time to finalize the pricing for purchase of the said items from the petitioner and till such time, at the request of 4th respondent, petitioner agreed to defer the dismantling of the said structures. 30. These minutes seem to suggest that 4th respondent was willing to purchase the lift frame, fire safety equipment, elevation glasses on all sides and compensate the petitioner for the said structures apart from boundary wall and iron sheets erected inside and around the building. 30. These minutes seem to suggest that 4th respondent was willing to purchase the lift frame, fire safety equipment, elevation glasses on all sides and compensate the petitioner for the said structures apart from boundary wall and iron sheets erected inside and around the building. It further indicates that there was an implied admission by the 4th respondent that these structures belonged to the petitioner and they were erected by him. 31. Admittedly, on 31-07-2018, petitioner sent an e.mail to the 1st respondent stating that the Bank had requested for additional one week time to be given before he removes all his belongings; that more than 10 days have elapsed since then and the Bank had not confirmed to the petitioner that he can remove his belongings and that he was writing the e.mail to inform the Bank that from the next day he would start removing his belongings. 32. The Bank replied on 31-07-2018 to the petitioner by another e.mail requesting the petitioner to hold the fixtures for 2 or 3 more days stating that they would revert to the petitioner on 2nd August or 3rd August, 2018. Nothing was heard from respondent Nos.1 and 2 thereafter. 33. Therefore, respondent Nos.1, 2 and 4 cannot rely upon the events which occurred in 2017 including letters dt.16-08-2017 of the Bank to petitioner giving 90 days time to the petitioner to vacate the premises for removing wooden material/old machinery; petitioner's letter seeking extension of time to remove his belongings on 06-11-2017; and the letter dt.07-11-2017 granting extension of time to the petitioner upto 30-11-2017. 34. In the light of the minutes of the meeting held between all the parties on 19-07-2018, it was clear that petitioner wanted to remove structures erected by him, but the auction-purchaser wanted to purchase the same and both auction-purchaser and the Bank asked the petitioner to defer dismantling of the structures therein. 35. For the first time in the counter-affidavits filed by respondent Nos.1, 2 and 4 in this Writ Petition they have now raised a dispute as to the entitlement of the petitioner to remove the lift frame, fire safety equipment, elevation glasses on all sides and iron sheets etc. 36. 35. For the first time in the counter-affidavits filed by respondent Nos.1, 2 and 4 in this Writ Petition they have now raised a dispute as to the entitlement of the petitioner to remove the lift frame, fire safety equipment, elevation glasses on all sides and iron sheets etc. 36. At no point of time in any letter/e.mails addressed to the petitioner before the filing of the Writ Petition, had respondent Nos.1, 2 and 4 contended that petitioner had no right to remove them as they did not belong to him. On the contrary, the minutes of the meeting dt.19-07- 2018 indicate that 4th respondent intended to purchase the same also from the petitioner and had sought time to make an offer for the said items by requesting the petitioner to defer the removal of structures. 37. After the minutes of the meeting was signed on 19-07-2018 till date, the 4th respondent had not come forward with any offer to enable him to purchase the said structures. 38. It is thus clear that it was respondent Nos.1, 2 and 4, who were preventing the petitioner from removing the said structures erected by him in the subject property by raising a contention that the premises was sold to the 4th respondent in 'as is where is' condition. Such a condition does not entitle respondent Nos.1, 2 and 4 to the structures which were erected by petitioner as a lessee of the premises and enjoy the benefit thereof since it is admittedly not the case of respondent Nos.1, 2 and 4 that they paid for those structures. They have also not been able to produce any material to show that it was the 3rd respondent/corporate guarantor of the loan of the Deccan Chronicle Holdings Limited, the owner of the premises, who actually erected those structures. Merely because the premises has been sold to 4th respondent by respondent Nos.1 and 2 under the provisions of the Act, the 4th respondent cannot, without compensating the petitioner adequately, enjoy the benefit of the said structures erected by petitioner. 39. Merely because the premises has been sold to 4th respondent by respondent Nos.1 and 2 under the provisions of the Act, the 4th respondent cannot, without compensating the petitioner adequately, enjoy the benefit of the said structures erected by petitioner. 39. We therefore reject the contention of respondents that petitioner is not entitled to fixtures such as lift frame, fire safety equipment, elevation glasses on all sides, iron sheets, wooden material and old machinery erected by him in the premises and hold that the respondents cannot stop the petitioner from doing so, since 4th respondent has not offered to pay for the same. Having agreed to finalize the price for purchase of the said items, the 4th respondent cannot now claim that they are part of the structures which were agreed to be sold to him and they are not movable properties. Merely because they are attached to the immovable structure which he has purchased, the lift frame, fire safety equipment, elevation glasses on all sides iron sheets and other wooden material and old machinery lying in the premises cannot be treated as immovable property since they are detachable and the respondents shall permit the petitioner to remove the same without raising any objection or obstructing the petitioner from removing them. 40. The Writ Petition is accordingly allowed with costs of Rs. 10,000/- (Rupees Ten Thousand only) to be paid by respondent Nos.1 and 4 within four (04) weeks to the petitioner; the action of respondent Nos.1 and 2 in not permitting the petitioner to remove the said items from the said premises is declared as arbitrary and violative of Article 14 and 300-A of the Constitution of India; and respondents are directed to permit the petitioner to take the same within four (04) weeks from the date of receipt of copy of the order. 41. Pending miscellaneous petitions, if any, shall stand closed.