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Judgment
S.N.H. Zaidi, J
This appeal has been directed against the interim order dated 5.8.2009 passed on the application (I.A. No. 588/2009) filed in the SA, whereby the learned Presiding Officer of the Debts Recovery Tribunal-II Delhi (for short, the DRT) restrained the physical dispossession of the appellant by the respondent-Bank till further orders subject to his filing an undertaking that if the property in question is purchased by some person other than him for a better price, then he shall hand over peaceful possession of the property to him. Briefly stated, the facts of the case are that the appellant had filed an application (S.A. No. 42/2009) before the DRT with the averments that he had purchased House No 42, Block No. A-3, Second Floor, Paschim Vihar. New Delhi, hereinafter referred to as the property in question, from one Chandra Prakash and his name was mutated qua that property in the records of the MCD. He took personal loan of Rs. 10 lacs from one Sandeep Adhlakha and executed a sale deed on 20.1.2006 of the property in question as a security thereof. On that very date Sandeep Adhlakha executed an agreement of tenancy. Annexure A-3 to the S.A., in favour of the appellant and he was permitted to retain the property as a tenant at the monthly rent of Rs. 2800/-. When Sandeep Adhlakha demanded his money back, the appellant arranged the same from one Ashwini Nayar and allowed Sandeep Adhlakha to execute the sale deed of the property in question in favour of Ashwini Nayar as a security. The said sale deed was executed on 5.7.2007 and on 20.7.2007. Ashwini Nayar also executed an agreement of tenancy, Annexure A-4 to the S.A., in favour of the appellant and permitted him to remain in possession as tenant on a rent of Rs. 3100/- per month in continuation of the earlier agreement of tenancy dated 20.1.2006.
The said Ashwini Nayar, in the capacity as guarantor, mortgaged the property in question with the respondent-Bank against the financial facilities sanctioned to his company M/s. Megnostar Telecommunications Pvt. Ltd. As the said borrower company failed to repay the amount of loan, the respondent-Bank classified the account as non-performing asset (NPA) and issued demand notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the SARFAESI Act). When the borrower did not pay the amount due on him, the respondent Bank approached the CMM under Section 14 of the said Act and obtained an order for the possession of the property in question. The appellant then filed the application under Section 17(1) of the SARFAESI Act (S A. No. 42/2009) and as an interim relief prayed through application (I.A. No. 588/2009) against is physical dispossession from the property in question. During the course of hearing of that application the applicant proposed to purchase the property in question at the reserve price of Rs. 1.1 crore. The learned Presiding Officer of the DRT permitted the respondent Bank to take symbolic possession of the property in question and to recover its amount through auction but a liberty was given to the appellant to participate in the auction. The learned Tribunal, however, also restrained the Bank from physical dispossession of the appellant till further orders subject to the condition, as mentioned above. Feeling aggrieved with the direction of filing of the undertaking to hand over possession within the specified time if the property is purchased by some one else than him, the appellant has filed the present appeal.
I have heard Mr. Dincur Bajaj on behalf of the appellant and Mr. Shahzad Khan on behalf of the respondent-Bank as none appeared on behalf of the borrower (respondent No. 2) and perused the record.
Mr. Bajaj has pointed out that the applicant is neither a borrower nor guarantor or mortgagor and his claim is based on the tenancy and possession of the property in question. He has contended that it is not the case of the respondent-Bank that the appellant was inducted by the defaulter borrower after the creation of the mortgage as he is in possession of the property in question from before the creation of mortgage in favour of the Bank. He has submitted that the question of possession of the appellant as tenant is to be decided by the Tribunal below as the SA is still pending disposal before it. He has further submitted that the appellant would be subjected to great hardship if he is forced to vacate the property in question in the eventuality of it being purchased by some other person than him, on the basis of the undertaking, even before the question of his tenancy is decided by the Tribunal below. Mr. Bajaj also contended that the appellant's legal right as a tenant could not be made dependent on the undertaking as asked for by the learned DRT. According to him, the appellant is living in the property in question with his family and the learned Tribunal below has accepted his possession over the property in question from before its mortgage and he has acquired a right of possession as a statuary tenant which is required to be protected and the respondent-Bank cannot dispossess him in exercise of the powers under the SARFAESI Act. Mr. Bajaj has also relied upon the case of Krishan Singh Rana v. Haryana State Industrial Development Corporation Ltd., : 2001 (1) Bank CLR 228 (SC) and on a judgment of this Tribunal rendered in Aas Mohmad v. Punjab National Bank & Anr., 1 (2009) BC 72 (DRAT), in support of his contention.
Mr. Shahzad Khan, on the other hand, contended that besides the question of alleged tenancy of the appellant, the question relating to the possession is also to be adjudicated upon by the Tribunal as in para 2 of the sale deed dated 20.1.2006 the appellant has stated about the delivery of the property in question to the vendee Sandeep Adhlakha. He further contended that on the basis of his alleged claim of tenancy of the mortgaged property the appellant cannot stall the measures which the Bank is entitled to take under the SARFAESI Act. In support of his contentions, Mr. Khan has relied upon the judgments of the Delhi High Court rendered in the cases of Sanjeev Bansal v. Oman International Bank Saog & Anr. : 131 (2006) DLT 729 (DB) and Jammu and Kashmir Bank Ltd. v. Gold Line Impex Pvt. Ltd. & Ors., : 154 (2008) DLT 531 (DB), and also on a judgment of this Tribunal rendered on 5.3.2010 in MA No. 47/2010 -- Kotak Mahindra Bank Ltd. v. Mr. Kaushal Arora.
Having considered the submission of the parties' Counsel and on perusal of the record, I am satisfied that the appellant's possession over the property in question from before its mortgage is prima facie proved. Though the question of possession of the appellant as a lawful tenant is to be decided by the Tribunal below, yet the alleged tenancy of the appellant finds prima facie support from the agreement of tenancy dated 20.1.2006 executed between the appellant and Sandeep Adhlakha, Annexure A-3 to the S.A., as well as agreement dated 20.7.2007 executed between the appellant and Ashwini Kumar Nayyar, Annexure A-4 to the S.A., and as such the learned Tribunal below has rightly held about the existence of a prima facie case in favour of the appellant for interim protection of his possession.
In the case of Krishan Singh Rana v. Haryana State Industrial Development Corporation (supra), the Hon'ble Supreme Court, while considering the right of a tenant against his dispossession from a property sought to be sold by the respondent under Section 29 of the State Financial Corporation Act, 1951, has held that the field of Section 29 is between the Corporation and the owner and the Corporation can do all that is permissible to it under Section 29 as against the owner, but as against tenant or person claiming such right, he could only be evicted in accordance with law by the present owner or by an owner who may subsequently come in, but, under Section 29, the Corporation cannot evict the tenant. The submission of Mr. Bajaj that although the State Financial Corporation Act is a different statute, yet since the provisions of Section 29 of the Act are para materia to the provisions of Section 17 of the SARFAESI Act, therefore, the ratio of the said case applies in the instant case, has force and is tenable. In my view, if the appellant, on the basis of evidence adduced before the Tribunal below, is found to be a lawful tenant of the property in question, then, as per the observation of the Hon'ble Apex Court, he can only be evicted by the owner thereof in accordance with law.
As the facts and circumstances of the cases, relied upon by Mr. Khan, as cited above, are entirely different than the facts and circumstances of the present appeal, therefore, the observations made in those cases, in my opinion, do not apply to this appeal.
In the case of Sanjeev Bansal v. Oman International Bank Saog (supra), the tenancy was created after the creation of mortgage and the alleged lease was based on an unregistered deed on a insufficient stamp paper and the emphasis of the petitioner was on Section 14 of the Delhi Rent Control Act, which protects a tenant against his eviction qua landlord and not against a mortgagor seeking to enforce his rights under the SARFAESI Act.
Similarly, in M.A. No. 47/2010 -- Kotak Mahindra Bank Ltd. v. Kaushal Arora (supra) of this Tribunal, the alleged tenancy was also created after the creation of mortgage of the property in question in favour of the Bank. The facts and circumstances of the said appeal were also different from the facts and circumstances of the present case and as such the observations made in that appeal do not hold good to this case.
In the case of Jammu & Kashmir Bank Ltd. v. Gold Line Impex Pvt. Ltd. & Ors. (supra), it was found that the alleged tenant, M/s. Gold Line Impex Pvt. Ltd. and the borrower, M/s. Priyanka Overseas Private Ltd., were sister concerns and the main person at whose instance the entire credit facilities were availed of by the borrower was the Director of both the companies and the alleged lease deed was also found to be a sham transaction executed with a view to defeat the process of law and in view of these facts and circumstances the Hon'ble High Court did not find the alleged tenant entitled to the relief against its dispossession. Thus, the said case also has no application to the present case wherein the appellant has been found, by the learned Tribunal below, in possession of the property in question from before the creation of mortgage by respondent No. 2 in favour of respondent No. 1 Bank.
In view of above discussion, during the subsistence of the S.A. wherein the question of appellant's alleged lawful tenancy is yet to be adjudicated upon, the direction of filing an undertaking by the appellant for vacating the property in question within 30 days of confirmation of sale or issuance of sale certificate in case it is purchased for better price by some person other than the appellant does not appear to be legally sound as it affects the appellant's alleged right of tenancy over the said property. I am, therefore, of the considered view that the appeal has merit and is entitled to be allowed.
The appeal is accordingly allowed and the impugned condition of filing the undertaking-cum-affidavit is set aside. The parties shall bear their own cost.
Before parting, it is made clear that the learned Tribunal below shall not be influenced by any of the observations made by this Tribunal in this order while deciding the S.A. Let the record of the Tribunal below be sent back to it along a copy of this order. Copies of the order be also furnished to the parties.