Prajapath Ramesh Kumar, S/o. Saganaji v. Union Bank of India, Rep. By Its Authorized Officer, SPSR Nellore District
2025-07-09
DHIRAJ SINGH THAKUR, RAVI CHEEMALAPATI
body2025
DigiLaw.ai
ORDER : Ravi Cheemalapati, J. The petitioner, claiming to be the tenant of the premises, challenges the order dated 10.05.2024 passed in Crl.M.P.No.27 of 2024 by the learned Chief Judicial Magistrate-cum-Principal Assistant Sessions Judge, Nellore, under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ‘the SARFAESI Act’) whereby and whereunder a warrant of commission was issued for taking over physical possession of the subject premises. 2. The contents of the writ petition, in brief, are that the petitioner is a tenant of the subject premises since 2011 as is evidenced by GST Registration Certificate and owners of the said premises executed a registered lease deed in his favour on 26.12.2023 for a period of two years, which expires on 29.09.2025. That when his owners tried to evict him, he filed O.S.No.33 of 2024 on the file of learned Principal Junior Civil Judge, Kovur and the same was ended in compromise before Lok Adalat bench, Kovur and an award was passed on 16.03.2024 as per which the petitioner is entitled to continue in possession of the property till expiry of lease on 29.09.2025. It is further stated in the writ petition that owners of the subject property mortgaged the said property to respondent no.1-Bank on 20.06.2016 and they became defaulters, respondent no.1 initiated SARFAESI Act proceedings for recovery of loan amount and vide orders dated 10.05.2024 passed in Crl.M.P.No.27 of 2024, an Advocate Commissioner was appointed. That owners of the property filed Writ Petition vide W.P.No.12155 of 2024 and this Court granted stay of all further proceedings and later the said writ petition was disposed of on 28.04.2025 keeping in force the interim orders granted till 27.05.2025 on which date the Securitization Application No.250 of 2022 filed by petitioner in the said writ petition stood posted to. It is further stated in the writ petition that a day before filing the writ petition, officials of the bank came to the premises, showed him the commission warrant dated 10.05.2024 and directed him to vacate the subject premises.
It is further stated in the writ petition that a day before filing the writ petition, officials of the bank came to the premises, showed him the commission warrant dated 10.05.2024 and directed him to vacate the subject premises. That though the petitioner was tenant of the premises since 2011 i.e., much prior to mortgaging the property to the bank, he was not made a party to the application filed for appoint of Advocate Commissioner for recovering possession of the property and no notice was issued by the bank or by Advocate commissioner for eviction. That the respondents cannot evict the petitioner from the subject premises without following the procedure under the guise of SARFAESI Act. That though the Advocate commissioner was appointed on 10.05.2024, till now the warrant was not executed and therefore, the Advocate commissioner now cannot evict the petitioner under the guise of the warrant dated 10.05.2024. Therefore, the action of the respondents in trying to evict the petitioner from the premises in pursuance of commission warrant dated 10.05.2024 is arbitrary and illegal. 3. Heard Sri V.Sai Kumar, learned counsel for the petitioner, and Sri R.S.Prakash Rao Kola, learned counsel for respondent no.1/Bank. 4. Sri V. Sai Kumar, learned counsel for the petitioner, while reiterating the contents of the writ affidavit would contend that Certificate of Registration of Labour Department clearly shows that the petitioner has been continuing in possession of the subject premises being its tenant much prior to creation of mortgage over the subject premises in favour of the bank and therefore, the bank authorities ought to have added him as a party to the proceedings in Crl.M.P.No.27 of 2024 and hence the orders passed by the learned Chief Judicial Magistrate, Nellore are not binding on the petitioner. He would further contend that as per the registered lease deed dated 26.12.2023, the lease was in force up to 29.09.2025 and hence the petitioner is entitled to continue in possession of the property up to 29.09.2025. He would further contend that the commission warrant was entrusted to the Advocate Commissioner on 10.05.2024, and as he could not execute the warrant within a reasonable period, now he cannot execute the same long after entrustment of warrant and the respondent bank has to move the Chief Judicial Magistrate to get extension of time for taking possession of the secured asset.
In support of his contention, the learned counsel relied on the decision of a coordinate bench of this Court in Mangalagiri Textile Mills Private Limited, rep. by its Chairman, Dr. Goli Nagasaina Rao and another vs. State Bank of India, rep. by its authorized officer and another, 2022 SCC OnLine AP 525. Accordingly, prayed to allow the writ petition. 5. Per contra, Sri Ranga Surya Prakash Rao Kola, learned counsel for respondent no.1/Bank would contend that the lease deed dated 30.09.2011 placed on record by the petitioner would go to show that the period of lease is for fourteen (14) years and same is a compulsorily registerable document as per Section 17 of the Registration Act and since the lease deed relied on by the petitioner is unregistered, it has no sanctity in the eye of law and carries no value and consequently the tenancy covered under the said document can only be considered from month to month. He would further contend that owners of the property mortgaged the property in favour of the bank in the year 2016, which is much prior to execution of registered lease deed in favour of the petitioner, therefore, the right of the petitioner, if any, are subservient to the mortgage rights exercisable by the bank on the subject property. He would further contend that warrant entrusted to the commissioner could not be executed on account of interim order granted by this Court on 30.05.2024, which was in force till 27.05.2025, and hence the contention raised by the petitioner that the warrant cannot be executed on account of efflux of time is untenable and is liable to be rejected. He would further contend that in view of availability of efficacious alternative remedy of preferring appeal before the Debt Recovery Tribunal as against the impugned orders, the writ petition is not maintainable. Accordingly, prayed to dismiss the writ petition. 6. Perused the material available on record and considered the submissions made by learned counsel for petitioner. 7.
He would further contend that in view of availability of efficacious alternative remedy of preferring appeal before the Debt Recovery Tribunal as against the impugned orders, the writ petition is not maintainable. Accordingly, prayed to dismiss the writ petition. 6. Perused the material available on record and considered the submissions made by learned counsel for petitioner. 7. The petitioner attacks the legality and correctness of the orders impugned on two counts, viz., (a) that though he has been tenant of the premises long before creation of equitable mortgage, he was not made as party to the proceedings initiated under the provisions of SARFAESI Act and no notice was issued to him either by the bank or by the commissioner for eviction and hence he is entitled to continue in possession of the property mentioned in the registered lease deed which expires by 29.09.2025 (b) that the commission warrant entrusted on 10.05.2024 cannot be executed at this length of time, since could not be executed within the reasonable period. 8. In the decision relied on by the learned counsel for the petitioner in Mangalagiri Textile Mills Private Limited (supra 1), a coordinate bench of this Court held that if Chief Metropolitan Magistrate imposed a time-limit for taking over possession, such stipulated time has to be mandatorily adhered to and if it could not be done for whatever reason, the appropriate course of action is to re-approach the Chief Metropolitan Magistrate for extension of time. In the absence of any period of limitation, the authority has to exercise the power within a reasonable period. While observing so, taking over physical possession of the secured asset on 17.12.2021, purportedly in terms of the order dated 28.12.2020 was declared devoid of authority of law. 9. Placing reliance on the said decision, the learned counsel for petitioner contends that the warrant dated 10.05.2024 entrusted to the commissioner, owing to afflux of time became inexecutable and the bank has to approach the Chief Judicial Magistrate seeking extension of time for taking over physical possession of the property.
9. Placing reliance on the said decision, the learned counsel for petitioner contends that the warrant dated 10.05.2024 entrusted to the commissioner, owing to afflux of time became inexecutable and the bank has to approach the Chief Judicial Magistrate seeking extension of time for taking over physical possession of the property. Whereas the learned Standing Counsel for the bank attacks the said contention stating that the warrant could not be executed in view of interim orders granted by this Court in W.P.No.12155 of 2024 filed by owner of the property and hence the observations made in the decision relied on by the petitioner cannot be made applicable to be facts of this case. 10. The petitioner placed on record From GST-REG-06 (Registration Certificate) of his shop issued on 18.12.2017 and took a specific stand that the same shows that he has been running Fancy Shop business in the schedule premises since long prior to creation of equitable mortgage over the subject premises in favour of respondent no.1-Bank. Therefore, the bank ought to have included him as a party in the petition filed by the Chief Judicial Magistrate for taking over physical possession of the subject premises. Whereas learned counsel for respondent contends that the unregistered lease deed dated 26.12.2023 relied on by the petitioner in proof of his lease for a period of fourteen (14) years is hit by section 17 of the Registration Act and the same cannot be taken into consideration. Therefore, non-inclusion of petitioner and non-issuance of any notice cannot be the grounds to set aside the orders impugned in the writ petition. 11. Before going into merits of the matter, it is relevant here to note that in Union Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 , the Hon’ble Supreme Court has deplored action of High Courts in exercising writ jurisdiction ignoring availability of statutory remedies under the DRT Act and SARFAESI Act. They are extracted hereunder: “55. It is a matter of serious concern that despite repeated pronouncements of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues.
It is a matter of serious concern that despite repeated pronouncements of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection.” 12. This Court, vide orders dated 11.07.2024, passed in Writ Petition No.14411 of 2024, held that in the absence of exceptions enumerated in the decision of the Hon’ble Supreme Court in PHR Invent Educational Society v. UCO Bank, (2024) 6 SCC 579 the petitioners should avail the alternate remedy in terms of SARFAESI Act and further taking note of the observations referred to supra in para-55 in Satyawati Tondon (supra 1), finding no merit in the writ petition granted liberty to the petitioners to avail an appropriate remedy. 13. Therefore, availability of alternative efficacious statutory remedy provided under SARFAESI Act to question the proceedings initiated by respondent no.1 under Section 14 of the Act, debars the petitioners from invoking writ jurisdiction. 14. In view of the above, it is needless to go into merits of the matter, since observations, if any, made may influence the mind of the Debt Recovery Tribunal while disposing of the proceedings, if any, initiated by the petitioner. 15. Therefore, the writ petition is dismissed. The status quo orders granted on 29.05.2025 shall be in force for a period of one (01) month from today so as to enable the petitioner to initiate appropriate proceedings before the Debts Recovery Tribunal. There shall be no order as to costs. Pending miscellaneous applications, if any, shall stand closed.