Tummala Ram Mohan Rao, S/o late Bhaskara Rao v. Union Bank of India
2024-05-30
SUBBA REDDY SATTI, VENKATA JYOTHIRMAI PRATAPA
body2024
DigiLaw.ai
ORDER : (Per Subba Reddy Satti, J) The Writ Petition is filed seeking the following relief: “… … to issue an appropriate order or direction, more particularly, one in the nature of Writ of Mandamus, declaring that the action of the Respondents bank in high handedly threatening to dispossess and take physical possession of the petitioner’s leasehold property/rented premises namely Flat No.101 and Flat No.102 in Sree Ramji’s Arcade, situated at D.No.8-345, in R.S.No.192/2A, Bypass road, Valivarthipadu panchayati, Gudivada in pursuance of the notice of the advocate commissioner dated 25.04.2024 affixed on 16.05.2024 as per orders passed in Crl.M.P.No.82/2024 in C.F.122/2024 and Crl.M.P.No.83/2024 in C.F.123/2024 on the file of the Chief Judicial Magistrate, Machilipatnam granting 7 days time to vacate the property else threatened to lock and key the premises and dispossess by police force without considering the representation and Rental Agreement/lease deed and other evidence as a lessee submitted by the petitioner is arbitrary, illegal, unjust and whimsical and violative of Article 21, 19(1)(g), 300A of the Constitution of India besides in utter breach of principles of natural justice and fair play and consequently direct the respondents bank not to interfere and dispossess the petitioner with his possession … …” 2. Petitioner claiming to be a tenant of Flat Nos.101 and 102 in Sree Ramji’s Arcade, situated at D.No.8-345, in R.S.No.192/2A, Bypass road, Valivarthipadu Panchayat, Gudivada, filed the above writ petition. 3. Facts in the affidavit, in brief, are that notices dated 25.04.2024 were affixed at Flat Nos.101 and 102 on 16.05.2024 according to order in Crl.M.P.No.82/2024 in C.F.122/2024 and Crl.M.P.No.83/2024 in C.F.123/2024 on the file of the Chief Judicial Magistrate, Machilipatnam. Seven days were granted to vacate the premises. Respondents 4 and 5 are the owners of Flat Nos.101 and 102. Petitioner entered into a lease agreement dated 05.01.2023 on a monthly rent of Rs.4,500/- per each of flats for five years commencing from 05.01.2023. Petitioner also filed suit O.S.No.49 of 2024 on the file of Principal Junior Civil Judge, Gudivada, against respondents 4 and 5. I.A.No.158 of 2024 was filed for grant of interim injunction and the civil Court granted ad interim injunction on 06.03.2024. b) Petitioner informed respondents 4 and 5 about affixing notices, who, in turn, informed the petitioner about their filing W.P.No.6477 of 2024 and also assured him to settle the matter.
I.A.No.158 of 2024 was filed for grant of interim injunction and the civil Court granted ad interim injunction on 06.03.2024. b) Petitioner informed respondents 4 and 5 about affixing notices, who, in turn, informed the petitioner about their filing W.P.No.6477 of 2024 and also assured him to settle the matter. The petitioner filed objection petitions on 20.05.2024 before the Chief Judicial Magistrate, Machilipatnam, however, the same was returned with certain objections. The petitioner has been a tenant since 2015 and did not know of any transaction between respondents 4, 5 and the respondents 1 to 3. With these averments, the above writ petition is filed. 4. Heard Sri Anand Seshu Popuri, learned counsel for petitioner and Smt.Dyumani, learned standing counsel for respondents 1 to 3. 5. Learned counsel for the petitioner while reiterating the contentions as per the averments made in the affidavit, would submit that seven days granted would expire by 23.05.2024 and the petitioner will be dispossessed. He would also submit that lease in favour of the petitioner is subsisting and hence, the order passed by the learned Chief Judicial Magistrate, Machilipatnam is contrary to Section 65-A of the Transfer of Property Act, 1882 (for short “the Act”). 6. Learned standing counsel for respondents 1 to 3 would submit that notice under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “SARFAESI Act”) was issued to respondents 4 and 5 on 01.08.2019 and 11.11.2019. She would also submit that since the alleged unregistered lease is after the issuance of notices, the petitioner cannot claim any right as a tenant. She would submit that the petitioner having filed objection petitions before the criminal Court ought to have pursued the same before the criminal Court and eventually prayed to dismiss the writ petition. 7. Thus, as seen from the material available on record, respondents 4 and 5, being owners of the respective flats, mortgaged the flats with 1st respondent and obtained loans to conduct fish culture business. Fish tanks in an extent of nearly Ac.35.00 cents and flats, referred to supra, were offered as security. Since respondents 4 and 5 failed to repay the amount, loan transactions were declared as NPA.
Fish tanks in an extent of nearly Ac.35.00 cents and flats, referred to supra, were offered as security. Since respondents 4 and 5 failed to repay the amount, loan transactions were declared as NPA. Respondents 4 and 5, in fact, filed W.P.No.6744 of 2024 to declare the action of respondents therein in not finalizing OTS Scheme in respect of loan accounts mentioned therein. The said writ petition seems to have been filed in March 2024. 8. It is pertinent to mention here that in the writ affidavit W.P.No.6744 of 2024 there is no averment regarding lease in favour of the writ petitioner. 9. The contention of learned counsel for the petitioner that, since the lease is subsisting in favour of the petitioner for 5 years, as per the lease deed dated 05.01.2023, the respondent-bank ought to have issued notice to the petitioner, will be adjudicated by learned Chief Judicial Magistrate, Machilipatnam. 10. In Bajarang Shyamsunder Agarwal Vs. Central Bank of India, (2019) 9 SCC 94 , the Hon’ble Apex Court while considering the rights of the tenant, held thus: “24.1. If a valid tenancy under law is in existence even prior to the creation of the mortgage, the tenant's possession cannot be disturbed by the secured creditor by taking possession of the property. The lease has to be determined in accordance with Section 111 of the TP Act for determination of leases. As the existence of a prior existing lease inevitably affects the risk undertaken by the bank while providing the loan, it is expected of banks/creditors to have conducted a standard due diligence in this regard. Where the bank has proceeded to accept such a property as mortgage, it will be presumed that it has consented to the risk that comes as a consequence of the existing tenancy. In such a situation, the rights of a rightful tenant cannot be compromised under the Sarfaesi Act proceedings. 24.2. If 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. 24.3. In any case, if any of the tenants claim that he is entitled to possession of a secured asset for a term of more than a year, it has to be supported by the execution of a registered instrument.
24.3. In any case, if any of the tenants claim that he is entitled to possession of a secured asset for a term of more than a year, it has to be supported by the execution of a registered instrument. In the absence of a registered instrument, if the tenant relies on an unregistered instrument or an oral agreement accompanied by delivery of possession, the tenant is not entitled to possession of the secured asset for more than the period prescribed under Section 107 of the TP Act.” 11. The Hon’ble Apex Court also considered Vishal N.Kalsaria Vs. Bank of India, (2016) 3 SCC 762 and Harshan Govardhan Sondagar Vs. International Assets Reconstruction Co. Ltd., (2014) 6 SCC 1 . 12. The case at hand, as seen from the copy of the lease deed filed by the petitioner, is an unregistered document executed on 100 rupees stamp and the period of lease mentioned therein is five years. The lease deed, in fact, requires registration, however, it is unregistered. Be that as it may, we are not inclined to give any finding regarding validity or otherwise of the document, since the petitioner has already filed criminal miscellaneous petitions before the learned Magistrate. 13. Learned standing counsel would submit that notices under Section 13 (2) of the SARFAESI Act were issued in August, 2019 and November 2019. Thus, after initiation of proceedings under SARFAESI Act, the petitioner entered into a lease agreement with respondents 4 and 5 for 5 years commencing from 05.01.2023. Filing of suit by the petitioner against respondents 4 and 5 will not preclude respondents 1 to 3 from proceeding under SARFAESI Act. The petitioner having filed objection petitions under Section 14(1) of SARFAESI Act, should have pursued the petitions. In fact, the said petitions filed by the petitioner on 20.05.2024 were returned on the same day. The petitioner ought to have complied with objections. Since the petitioner has already filed miscellaneous petitions, we are not recording any finding on qua the validity of the un-registered lease deed dated 05.01.2023. We are conscious that, if any finding is recorded, with regard to the lease deed refereed to supra, it will affect the petitioner’s right before the criminal Court. Given the same, we are not recording any findings at this stage.
We are conscious that, if any finding is recorded, with regard to the lease deed refereed to supra, it will affect the petitioner’s right before the criminal Court. Given the same, we are not recording any findings at this stage. Since the petitioner has already filed objection petitions before the criminal Court, we do not see any merit in this writ petition and the same is liable to be dismissed. 14. Accordingly, the Writ Petition is dismissed, giving liberty to the petitioner to prosecute the objection petitions filed before the criminal Court. No costs. As a sequel, pending miscellaneous petitions, if any, shall stand closed.