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Judgment
Justice BrijeshSethi
Vide this common order I shall dispose of two connected appeals bearing no. 85/2022 and 86/2022 vide which the SAs filed by the appellants were dismissed vide the common order dated. 6.06.2022 passed by the Ld. PO, DRT-III, Chandigarh. The premises in question i.e. property bearing No. B-9-1456 (new), B-6-1274/14 (Old), Mandi Bagh Butte Shah, Ludhina regarding which there is a threat of dispossession from the respondent bank is the same. However, the loan amounts are different and in the impugned order both the loan amounts are mentioned which are Rs. 1.10 Crores (disbursed on 03.04.2019) and Rs. 30 Lacs (disbursed on 24.05.2019) respectively. The property was mortgaged with the Bank on 24.05.2019. The impugned order dated 06.06.2022 runs as follows:-
“This SA is placed today for orders. Ld. Counsels for applicant and respondent no.1and 2 were already heard. Perused record.
This SA is filed u/s 17 of SARFAESI Act for staying the operation of possession notice to the extent it seeks to take physical possession of the property as mentioned, on behalf of third party i.e. alleged tenant.
It is stated in the application that applicant is in possession of property i.e. Shop No.B/6-1274/14 old, B-9 1456 new situated at Mandi Bute Shah, Ludhiana since the year 2016 and he was inducted in this property as tenant by its previous owners Sh. Jang Bahadur Singh and others. Thereafter property was purchased by respondent no.3 Sh. Balraj Gupta from Sh. Jang Bahadur Singh and others through registered sale deed dated 14.05.2019. It is further stated that thereafter respondent no.3 had executed rent deed dated 01.06.2019 in favour of applicant and another rent deed dated 19.03.2021 in favour of applicant. It is further stated that respondent bank pasted notice u/s 13(4) of the SARFAESI Act dated 13.10.2021 on the property in question. After making enquiry from bank, applicant came to know that respondent no.3 had availed loan from the respondent bank after mortgaging the said property and mortgage was created after execution of rent deed dated 01.06.2019. It is further stated that few rent receipts were issued by respondent no.3 and applicant is paying license fee to Municipal Corporation Ludhiana since the year 2016 and few receipts are issued by Mandi Bagh Welfare Society in favour of applicant. It is further stated in the application that applicant had filed one Civil Suit for permanent injunction to restrain respondent no.3 from dispossessing applicant from the property in question. It is also stated in application that Hon’ble Supreme Court of India in Vishal N Kalsaria Versus Bank of India AIR 2016 SC 530 has held that provisions of SARFAESI Act do not override the provisions of Rent Control Act.
Reply filed on behalf of respondent no.1 and 2 and it is stated in reply that there is no registered rent deed in favour of applicant. Applicant has only been set up by the borrower in order to prevent bank from exercising its rights under the provisions of SARFAESI Act. Alleged receipts of payment of rent are patently manufactured documents which have been created only to mislead this Tribunal. Receipt filed as Annexure P5 do not bear the signature of any person so placed on record. Documents filed by applicant as Annexure P6 shows that an effort has been made by putting whitener, thereof, only in order to put the address of the mortgage/ secured premises, in order to support the borrower and applicant. It is further stated in reply that alleged license fee to the market committee does not prove either the possession or the tenancy thereof of the applicant and alleged rent deed is not a registered document and no reliance can be placed on such documents. It is further stated that even otherwise the rent deed is purportedly executed on 19.03.2021 the same was valid only for period of 11 months which period has also since expired. It is also stated in reply that respondent no.3 Sh. Balraj Gupta, who has availed loan facility at the time of purchase of the said property, and which was also mortgaged to the secured creditor itself shows that the applicant was a witness to the said agreement. It is further stated in reply that as per the information available with the respondent bank the applicant of this SA and the loanee Sh. Balraj Gupta are partners and are doing business together. It is also stated that photograph of the site were taken immediately after the time of creation of mortgage/ availing of the loan facility in the year 2019 shows that the premises was in a demolished condition which falsified the story of tenancy by applicant since 2016. In fact applicant is hand in glove with the respondent no.3 Sh. Balraj Gupta loanee/ defaulter and in their endeavor to prevent the bank from exercising its rights under the provisions of the Securitization Act. Applicant has indulged in creation, falsification and forgery of documents in order to mislead this Tribunal.
It is also specifically mentioned in reply that the mortgage was created on 24.05.2019 i.e. much prior to alleged rent deed proposed by applicant. Since, at the time when the property was mortgaged it was in dilapidated condition and there was no roof over the same, there was no occasion for creation of rent deed/ tenancy as alleged. It is further stated that the lease could not be created after the property already stood mortgaged to the bank against loan facility and no permission was ever taken from the answering respondents.
It is also stated in reply that loan of Rs.1.10 Crores was disbursed on 03.04.2019 and loan of Rs.0.30 Crores on 24.05.2019 and property was mortgaged.
Replication on behalf of applicant also filed wherein the contents of SA are reiterated and contents of reply are denied being wrong.
It is argued on behalf of applicant that he is tenant of the mortgaged property since 2016 and since 2019 on the basis of rent deeds. It is also argued that provisions of SARFAESI Act do not override the provisions of Rent Control Act. It is argued on behalf of respondent no.1 and 2 that applicant is in hand in glove with actual borrower i.e. respondent no.3. Applicant is not tenant in the property in suit. Rent deeds are not registered documents. Alleged rent receipts filed by applicant are forged. It is also argued on behalf of respondent no.1 and 2 that at the time of mortgage of the said property, applicant was not tenant and no permission/ consent taken from respondent bank for creating tenancy in the suit property.
Section 58 of Transfer of Property Act says that “A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage money, and the instrument (if any) by which the transfer is effected is called a mortgage-deed”.
This fact is admitted to both the parties that alleged property specified in this SA is owned by Sh. Balraj Gupta i.e. respondent no.3 at present. Sh. Balraj Gupta has obtained loans of Rs.1.10 Crores on 03.04.2019 and Rs.0.30 Crores on 24.05.2019 and mortgaged the property in suit with respondent no.1 and 2.
Applicant is claiming himself as tenant in property in suit since the year 2016 but no rent deed is filed for the period before 2019, only two rent deeds i.e. Annexure A2 and A3 to this SA are filed. One is dated 01.06.2019 for 11 months and second is dated 19.03.2021 for 11 months. It is admitted to both the parties that these rent deeds are not registered one. These rent deeds shows that they are allegedly executed after the property was mortgaged with respondent no.1 and 2 on 24.05.2019 and no permission was taken from the answering respondent which is mandatory in law before creating tenancy as alleged by respondent no.1 and 2 in the para 5(VIII) of their reply, but no specific denial of the fact is made in replication filed on behalf of applicant.
Ld. Counsel for applicant has argued that applicant is in possession of the property in suit as tenant since 2016. Ld. Counsel for respondent no.1 and 2 has vehemently denied this fact. To prove the tenancy since 2016 applicant has filed receipt of license fee paid to Municipal Corporation, Ludhiana for the year 2016 - 2017. Ld. Counsel for respondent no.1 and 2 has in reply stated that this is made by putting whitener thereof only in order to put the address of mortgaged/ secured premises in order to support rights of the applicant and in reply of this Para 5(IX), it is stated that this receipt is forged and fabricated document. On perusal of Annexure A6, it appears that on the address of premises whitener is used and who has signed this receipt and his designation is not mentioned. The same facts are with other license fee receipts. Ld. Counsel for applicant filed a photocopy of receipt as Annexure A7 issued by Mandi Bagh Butte Shah Welfare Society for the different years but even registration number of the society is not mentioned in the said receipts and who has signed is not mentioned. In these circumstances, no reliance can be placed on these documents.
As per statement made by Ld. Counsel for respondent No.1 and 2 and stated in reply of SA that the mortgage was created on 24.05.2019, first rent deed dated 01.06.2019 is Annexed as A2 with application, it is for 11 months and second rent deed is dated 19.03.2021 is Annexed as A3 of the application is also for 11 months. This shows that both these rent deeds were executed after 24.05.2019 i.e. after mortgage of the property in suit.
In the case Vishal N Kalsaria Versus Bank of India AIR 2016 Supreme Court 530 it was held that as far as granting lease hold rights being created after the property has been mortgaged to the bank, the consent of the creditor needs to be taken. Admittedly, no such consent was ever taken in the present case.
In Bajarang Shyamsunder Aggarwal Versus Central Bank of India and another AIR 2019 Supreme Court 5017 it was held that after creation of mortgage CMM/ DM can pass order for delivery of possession of secured asset. It is also held that lease hold rights being created after the property has been mortgaged to the bank, the consent of the creditor needs to be taken.
In this case rent deed dated 01.06.2019 was only for 11 months but on the basis of that rent deed (if it is assumed correct) applicant was enjoying the possession of premises upto 18.03.2021 i.e. till execution of second deed as such if tenancy was more than a year it is to be supported by the execution of a registered instrument.
Hon’ble Supreme Court in the case of Hemraj Ratnakar Salian Ver. HDFC Bank Ltd. 2021 Supreme Court 3880 has held as under “the applicant has leased tenancy from 12.06.2012 to 17.12.2018. This is not supported by any registered instrument, therefore, he is not entitled to any protection of the Rent Act”. In the present case also applicant is claiming himself to be tenant in the said premises since 2016 though he has failed to prove the same.
Ld. Counsel for applicant placed reliance upon judgment in the case of Vishal N. Kalsaria Versus Bank of India AIR 2016 SC 530 and submitted that provisions of SARFAESI Act do not override the provisions of Rent Control Act but Ld. Counsel for applicant failed to satisfy this Tribunal as to whether the property in suit comes in purview of Rent Control Act. Hence, law laid down in the above case does not help the applicant.
In the circumstances above, applicant is not entitled to any protection of the Rent Act. Applicant has failed and could not show that tenancy was created in 2016. No consent of secured creditor i.e. respondent bank was ever taken before executing rent deeds. Both rent deeds were only for 11 months but applicant has utilized them for more than a year and both the rent deeds are not registered as per provisions of law.
In the circumstances of the case, applicant has failed to make out any case in their favour. In view of the above facts and circumstances, this Tribunal is of the considered opinion that applicant is not entitled to get any relief in this SA. SA is dismissed with cost.
Interim order, if any, in existence stands vacated.
Let the file be consigned to record room
Copy of this order be given to the parties as per rules.
(MRIDULESH KUMAR SINGH)
Presiding Officer
DRT-III, Chandigarh”
Ld. counsel for the appellant has challenged the impugned order passed by Ld. DRT on the ground that mortgage-deed was created on 24.05.2019 whereas loan documents were executed on 20.03.2019 i.e. much before the date when Mr. Balraj Gupta i.e. borrower became the owner of the property vide sale-deed dated 14.05.2019.
Ld. counsel for the appellant has submitted that as per the other Facility Agreement the loan amount of Rs. 1.10 Crores was signed by the parties on 29.03.2019 and as per the other Facility Agreement the loan amount of Rs. 30 Lacs was signed on 20. 03.2019 which are prior to the date of Mortgage i.e. 24. 05.2019.
It is further submitted that there is tempering with the dates regarding date of commencement of the EMI as per the acknowledgment form of the loan.
It is next submitted that in the present appeals loan was disbursed against future mortgage which is against the law. It is further submitted that though Ld. DRT has failed to consider the fact that the appellant is in possession of the property in question much before the property was kept as mortgage with the Bank. It is next submitted that though Ld. DRT has observed that rent agreement executed between the parties requires registration, however, no registration is required if the rent agreement is for a period of 11 months only.
Ld. counsel for the appellant has submitted that since the appellant was inducted as a tenant prior to the mortgage of the property with the Bank, the said tenancy is binding upon the bank and the appellant cannot be dispossessed from the premises in question.
It is, thus, submitted that the order dated 06.06.2022 passed by the Ld. DRT-III, Chandigarh is not in accordance with law and the same be, therefore, set aside, in the interest of justice.
Ld. counsel for the respondent, on the other hand, has submitted that the impugned order is in accordance with law and there is no infirmity in the same. The loan agreement was executed between the Bank and Mr. Balraj Gupta & Ms. Kiran Gupta and the documents of the mortgaged property i.e. Shop No. B/6-1274/14 Old, B-9 1456, situated at Mandi Bagh Butte Shah, Tehsil & District Ludhiana, Punjab-141013 is in the custody of respondent no.1 Bank.
Ld. counsel for the respondent has submitted that the borrower has not adhered to the financial discipline and committed defaults in paying the regular EMI’s and the account was, therefore, declared NPA on 06.10.2019 in respect of both the loans.
It is next submitted that demand notices under Section 13(2) of SARFAESI Act was issued on 03.12.2019 in respect of Loan No. NHLU0001276848 & on 29.02.2020 in respect of Loan No. LHLUD00001276850 to the borrower & co-borrower. Despite receiving the notice, the borrowers have failed to discharge their liability. It is submitted that appellant herein is 3rd party and is neither the borrower nor the guarantor. He has failed to produce on record any rent agreement from 2016 to 2019. The alleged rent agreements dated 01.06.2019 and 19.03.2021 cannot be relied upon as they are unregistered documents and have been created after the mortgage of the property and without taking any consent from the bank. It is further submitted that the receipt of the payment of an alleged license fee to the market committee does not prove the tenancy.
Ld. counsel for the respondent has next submitted that appellant was a witness to the sale-deed dated 01.05.2019 which has been executed in favour of the borrower and it is written in the sale-deed that property is free from all encumbrances. It is next submitted that appellant is showing himself to be the tenant of the premises even prior to the creation of mortgage-deed. However, there is no document on record to this effect.
It is, thus, submitted that there is no illegality in the order passed by the Ld. DRT as the appellants have entered into the property vide a lease-deed which is subsequent to the mortgage-deed.
I have considered the rival submissions. So far as the contention of Ld. counsel for the appellant that loan was disbursed prior to the sale-deed is concerned, the same is devoid of any substance for the reason that loan facility in this case was extended to the borrower to purchase the property. Thus the facility agreement obviously has to be prior to the date of sale-deed.
Ld. counsel for the appellant has further argued that there is over writing in the date of commencement of payment of the EMIs in the Acknowledgement Form. In the opinion of this Tribunal even if there is any over writing regarding commencement of the EMI, the same does not wipe out the fact that the loan was granted to the borrowers Mr.Balraj Gupta & Ms. Kiran Gupta and they have availed the same and failed to adhere to the financial discipline by not paying the EMIs.
Ld. counsel for the appellant has vehemently argued that the appellant is in possession of the premises as a tenant from the year 2016 by virtue of tenancy created with Mr. Harminder Pal Singh. However, no document has been placed on record to support the said fact. In these circumstances, the contention of the Ld. counsel for the appellant that appellant was tenant from the year 2016 cannot be accepted.
Perusal of record reveals that mortgage-deed was created on 24.05.2019 whereas the first rent-deed is dated 01.06.2019 and second rent-deed is dated 19.03.2021. Thus it is clear date both these rent-deeds were executed after mortgage of the property in question with the Bank. It is a settled law that for granting any lease-hold rights after the property has been mortgaged to the Bank, the consent of the Bank is required to be taken and admittedly no such consent has been taken in the present case.
Ld. counsel for the appellant has relied upon the judgment of Hon’ble Supreme Court in Harshad Govardhan Sondagar versus International Assets Reconstruction Co. Ltd. & Ors., (2014) 6 SCC 1, wherein it was held by the Hon’ble Court that in cases where a tenant has been inducted prior to the mortgage, such lease/ tenancy would be binding on the bank and the rights of the Banks under the SARFAESI act cannot override the rights of the tenants under the TP Act. This Tribunal has considered the above submission of the Ld. counsel for the appellant and is of the opinion that judgment cited by the Ld. counsel is distinguishable on the basis of the facts stated therein for the reason that in the present case there is no evidence at all on record to suggest that tenancy has been created prior to the mortgage, therefore, the judgment cited by the Ld. counsel does not help the appellant.
Perusal of the impugned order reveals that a very detailed and reasoned order has been passed by Ld. DRT-III, Chandigarh after analysing all the submissions made by the Ld. counsel for the appellant as well as respondent and there is no infirmity in the order passed by the Ld. PO to the effect that the tenancy was created by the appellant after creation of mortgage-deed dt. 24. 05.2019. In this regard Ld. PO has referred to the judgment of Hon’ble Supreme Court in ‘Vishal N Kalsaria Versus Bank of India, AIR 2016 SC 530’ and ‘Bajarang Shyamsunder Aggarwal Versus Central Bank of India and another, AIR 2019 Supreme Court 5017’ where it is held that creation of lease hold rights after the mortgage of the property requires the consent of Bank.
In view of the above discussion, this Tribunal is of the opinion that there is no illegality and irregularity in the orders passed by the Ld. DRT-III, Chandigarh. The tenancy has been created after the creation of mortgage-deed with the Bank and, therefore, the same is not valid in the eyes of law and the appellants have, thus, no right to continue in the premises which stands duly mortgaged with the Bank vide mortgaged-deed dated 14.05.2019 and the action taken by the bank u/s. 13 (4) of SARFAESI Act for taking over the possession of the property in question is in accordance with law.
Both the appeals, are, therefore, dismissed and all the pending IAs also stand disposed of accordingly.
File be consigned to record room.
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