N.R. Garage and Others vs Punjab National Bank and Others

Anand Byrareddy, J.—The petitions are filed by entities claiming to be tenants in respect of certain property which was the subject matter of proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ''the SARFAESI Act'', for brevity) instituted by the respondent - Bank.

It transpires that the petitioners were summarily dispossessed on the strength of the provisions of the SARFAESI Act. Hence, the petitioners are before this Court. The petitioners claim to be tenants inducted in accordance with law and claim to be in possession under valid agreements, which is strongly denied by the respondent - Bank.

However, having regard to the law laid down by the Supreme Court in the case of Harshad Govardhan Sondagar Vs. International Assets Reconstruction Company Ltd. and Others, , in a similar circumstance, the Supreme Court has observed that in the case of a person claiming to be a tenant under a legally valid agreement, his right cannot be interfered with to remain in possession otherwise than under due process of law. Therefore, notwithstanding the rigour of the SARFAESI Act where such summary dispossession of persons in possession is possible, the Supreme Court has laid down that such persons if sought to be dispossessed, would have the remedy of approaching the Magistrate in seeking protection of their continued occupation of the property.

In that view of the matter, the remedy for the petitioners would be to approach the jurisdictional Magistrate who would have the authority to adjudicate as to the validity of the lease under which the petitioners claim to be in possession and grant them such protection, including restitution of possession if possible, on a consideration of the matter.

Therefore, the petitioner would do well to approach the Jurisdictional Magistrate in line with the law laid down by the Supreme Court in the above case and seek appropriate remedy. This court would not have the jurisdiction to address the same, as held by the Supreme Court in the case of United Bank of India Vs. Satyawati Tondon and Others, .

Accordingly, the petitions stand disposed of with liberty to the petitioners to approach the Magistrate. In the meanwhile, it is also reported by the respondent - Bank that pursuant to a direction by this Court, the petitioners have been put back in possession of the property. Incidentally, there is an impleading application by a subsequent purchaser of the property seeking that even if there are tenants in occupation, the tenancy ought to be attorned in his favour. These aspects of the matter shall be taken into consideration by the Magistrate and appropriate directions be issued even insofar as the claim of the impleading applicant is concerned. Hence, I.A. 1/2015 stands disposed of accordingly.

Having regard to the fact that the enquiry is a fall out of the proceedings under the SARFAESI Act, and the object of the law being an expeditious remedy provided to Banks and financial institutions, if any such application should be filed by the petitioners, the Magistrate would do well to address the same with expedition, in any event, and dispose of such application within eight weeks from the date of receipt of such application.