Asha Ajiraj vs Authorised Officer/Chief Manager, UCO Bank

N.Nagaresh, J

The petitioner, who is Managing Partner of the Firm “Snow White Associates”, which is running a showroom of “Total” Brand Tools by the name and style as “Total One Stop Tools Station”, has approached this Court seeking to declare that the petitioner is entitled to seek statutory remedies as per Section 17(4A) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 or any other appropriate remedies to enforce her right as a registered tenant in the 950 Square Feet show room in Thirumullavaram, Kollam District.

The petitioner also seeks to command the 1st respondent to grant reasonable time for the petitioner to seek statutory remedies as per Section 17(4A) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

The petitioner states that the petitioner has been running the business in the very same premises since the year 18.11.2021 onwards. The petitioner now holds a registered rent deed. Due to the liabilities created by the borrower of a loan account in respect of which the landlord is a guarantor, the UCO Bank proceeded against the guarantor's property in which the petitioner is running the business. The petitioner is ought to be evicted invoking the provisions of Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Immediately on coming to know of the proceedings, the petitioner approached the Chief Judicial Magistrate's Court and the Chief Judicial Magistrate's Court has deferred the coercive proceedings till 27.02.2024.

The petitioner states that the petitioner is running the business on the basis of a lease deed and after obtaining GST registration and in compliance of all statutory formalities. The petitioner has invested huge amounts for the business. The petitioner is ready and willing to pay the amount to the Bank or any person suggested by the Bank.

Standing Counsel entered appearance and resisted the writ petition. The Standing Counsel pointed out that the original mortgage of the property was in the year 2018 and 2020. After mortgaging the property, the guarantor has deliberately inducted tenants into the property. The registered tenancy deed of the petitioner is of the year 2023. When the Valuer of the Bank assessed the building in question, the Valuer has found and reported that the building is 'owner occupied' building, which indicated that there is no valid tenancy at that point of time.

Since the mortgage is much earlier than the alleged tenancy, and since the tenant had no registered documents at the time of taking tenancy, the petitioner cannot seek any relief from this Court. The petitioner's registered tenancy is only of the year 2023, that is much after the mortgage and much after the issuance of Section 32 notice. The petitioner is hand in glove with the borrower and the guarantor. This writ petition is intended to stop the recovery proceedings. The Bank has already sold the property to a third party though possession is not handed over. Unless, the Bank is able to give vacant possession to the auction purchaser, the auction purchaser may proceed against the Bank. In the facts of the case, the writ petition is liable to be dismissed.

I have heard the learned counsel for the petitioner and the learned Standing Counsel representing the respondents.

The petitioner had taken Ext.P3 GST registration for the business in question which was valid from 28.11.2021, prior to Section 13(2) notice. The petitioner has also produced Ext.P1 Lease Deed which is stated to be a Registered Lease Deed entered into on 08.06.2023.

The tenants like the petitioner have a statutory remedy now against the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the act has been so amended by inserting Section 17(4A). The petitioner states that the petitioner shall approach the Debts Recovery Tribunal, if a breathing time is granted. In the facts of the case, I am of the view that the petitioner can be granted a breathing time to move the Debts Recovery Tribunal, in the interest of justice.

The writ petition is therefore disposed of directing the respondents to defer coercive proceedings, if any, including one under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for a period of 14 days from today. It is made clear that no further time will be granted to the petitioner in this regard by this Court.