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Judgment
JUSTICE R.D. KHARE, CHAIRPERSON
The present appeal has been preferred by the appellant under section 18 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short "The SARFAESI Act") against the order dated 03.11.2023, whereby the S.A. No. 121/2017 filed by the appellants has been dismissed by the Tribunal below.
Brief facts of the matter are that the appellants are the tenants of the property in dispute and they are stated to be in possession of the same for the last more than 35 years.
It appears that M/s Nav Bharat Pvt. Ltd. had taken some loan from respondent no. 1-Bank and mortgaged the entire building with the Bank on 12.04.2004, which includes the properties of the appellants also. Since the borrowers did not maintain the financial discipline, therefore, the account was classified as NPA and the respondent no. 1-Bank after issuance of demand notice and possession notice had filed an application u/s 14 of the SARFAESI Act before the authority concerned, which was disposed off vide order dated 30.11.2016 and later on, it was modified on 23.03.2017. Pursuant to the said orders, the respondent no. 3-the Tehsildar, Kotwali Division, Jabalpur had pasted a notice dated 18.04.2017 for taking physical possession of the entire premises of Nav Bharat Press, which includes the shops/godowns of the appellants. The appellants challenged the notice dated 18.04.2017 as well as the orders dated 23.03.2017 and 30.11.2016 passed by the authority concerned before the Tribunal below by filing the present S.A., which has been dismissed by the Tribunal below vide order impugned. Being aggrieved by the said order, the present appeal has been filed by the appellant-Bank.
Learned counsel for the appellants submitted that the appellants are old tenants of Directors of M/s Nav Bharat Pvt. Ltd. in the precinct of Nav Bharat Press. It was further contended that when the notice dated 18.04.2017 was pasted by the respondent no. 3 for taking possession of the entire premises of Nav Bharat Press, which included the shops/godowns of the appellants, they came to know about the order dated 30.11.2016, which was subsequently modified on 23.03.2017, passed by the district authority u/s 14 of the SARFAESI Act. It was also contended that after passing the order, the District Magistrate has no power to renew or modify the same. It was further contended that the appellants are the tenants in the shops and godowns situated at ground floor of the building known as Nav Bharat Press and the first floor of the building was earlier occupied by the mortgager M/s Nav Bharat Pvt. Ltd.
Learned counsel further submitted that the respondent no. 1-Bank had earlier filed an application u/s 14 of the SARFAESI Act before the District Magistrate on 28.02.2013, which was dismissed in default on 04.09.2013. It was further contended that in the said case, the appellants had appeared and filed their respective objections collectively, but in the subsequent proceedings, the appellants were kept in dark by the Bank regarding their tenancy and obtained the order dated 30.11.2016, which was subsequently modified on 23.03.2017 by the District Magistrate, thus the said order was barred by the principle of res judicata, but also does not have any binding effect upon the appellants.
Learned counsel also submitted that the appellants had been making negotiations since long time from the respondent no. 1-bank for purchasing the shops/godowns, which are in their possession, under private treaty, but the Bank has not considered the same. It was further contended that the appellants are the tenants in Nav Bharat Press premises since 1983-1986 respectively, which is evident from annexure no. A-1 to A-4. It was also contended that the tenancy of the appellants is from 1983-1986 and the mortgage was created in 2004, but the respondent-Bank did not implead the appellants in the array of parties, thus they have been deprived from their right to raise the objection before the District Magistrate. It was thus prayed that the order impugned may be set aside and the appeal may be allowed.
Learned counsel for the respondent-Bank submitted that the controversy in the present case is to be adjudicated, as to whether the appellants being tenants deserve protection under the Rent Control Act or not?
Learned counsel has referred to the page no. 162 to 167 of the memo of appeal, which is a mortgage deed. The said mortgage deed demonstrates that Praful! Kumar Maheshwari was owner of the property in question, who has mortgaged the same with the respondent-Bank in order to secure the financial assistance granted to Nav Bharat Press Pvt. Ltd. and the said mortgage does not indicate that the said property is under any tenancy. Learned counsel has further referred to page no. 27 to 29 of the memo of appeal, which is the memo of securitization application filed by the appellants before the Tribunal below, which also shows that there is not even a single document of registered tenancy. Learned counsel has also referred to page no. 66 of the memo of appeal, which is rent receipt dated 10.04.2009 issued by Nav Bharat Press Pvt. Ltd. Learned counsel has further referred to page no. 67 & 68, which are the rent receipts dated 18.06.2010 and 28.05.2012 issued by the Nav Bharat Press Pvt. Ltd. Learned counsel has further referred to page no. 69 of the paper book, which is a letter dated 22.09.2024 issued by Nav Bharat Press (Bhopal) Pvt. Ltd. to the appellant no. 1 with regard to enhancement of rent w.e.f. 01.10.2014. Learned counsel has further referred to page no. 82 of the paper book, which is rent receipt dated 09.07.2011 issued by Nav Bharat Press (Bhopal) Pvt. Ltd. It was thus contended that the receipts towards rent produced by the appellants are subsequent to the mortgage created by Prafull Kumar Maheshwari to secure the loan advanced by the Bank in favour of M/s Nav Bharat Press. It was also contended that the appellants have never produced any registered lease agreement, which may authenticate their tenancy. It was, therefore, prayed that the appeal filed by the appellant may be dismissed with heavy costs.
I have considered the rival contentions of the learned counsels for the parties and perused the material available on record.
It is to be seen that a financial assistance was granted by the Bank to one M/s Nav Bharat Press Pvt. Ltd. and its one Director namely Shri Prafull Kumar Maheshwari had created equitable mortgage over his property in question by depositing original title deed with the Bank on 12.04.2004. On making default in repayment of the loan, the appellant-bank filed an O.A. No. 135/2009 against the said firm for a sum of Rs. 24,93,08,875.73/- along with interest, which was decreed on 05.08.2011 and recovery certificate was issued for the same, which was subsequently registered as OAEX No. 156/2011 before the Recovery Officer. In the said proceedings, one of the Directors of the said firm namely Mr. Prafull Kumar Maheshwari, who is mortgagor of the property in question, had taken objection for the first time with regard to the alleged tenants, which was declined by the Recovery Officer vide order dated 06.05.2015 and the same has never been challenged before any higher authority, therefore, the same has attained finality.
Besides above, the order dated 30.11.2016 passed by the District Magistrate u/s 14 was earlier challenged by the owner/mortgager Shri Prafull Kumar Maheshwari before the Tribunal below by filing the S.A. No. 01/2017, which was dismissed on merits vide order dated 21.12.2020. From the said facts, it is clear that the mortgager/owner of the property in question was attempting to stall the proceedings of the Bank on the ground of the alleged tenancy, but when he failed, then the appellants came in picture by filing the present S.A.
The main question in the present case is, as to whether the appellants are statutory tenants in the property under the dispute or not?
While going through the record of the case, it is found that the appellants have not filed any copy of lease deed/agreement of tenancy, which is evident from the page no. 27 of the paper book. The said page is of the S.A. filed by the appellants, but they have only filed the rent receipt dated 10.04.2009, copy of which has been placed at page no. 66. There are other rent receipts dated 18.06.2010 and 28.05.2012, copies of which have been placed at page no. 67 and 68 of the paper book. Perusal of these receipts reveals that these receipts are in the different form and signed by different persons, therefore, these receipts cannot be taken into consideration for establishing the tenancy of the appellants. If any person claims that he is entitled for possession of the secured asset for any term exceeding one year from the date of lease made in his favour, he has to produce proof of execution of a registered instrument in his favour by the lessor. If he fails to do so and relies on an unregistered instrument or oral agreement, he cannot be held to be entitle for possession of the secured asset. In the present case, the appellants neither filed any registered instrument nor any oral agreement, which may clear the period of the tenancy created by the owner in favour of the appellants. Thus the appellants cannot be said to be the statutory tenants in the premises in dispute, but it may be said that the borrower has set up these appellants to frustrate the recovery of the Bank.
So far as the contention of the appellants that they are interested in purchasing the property, which are allegedly stated to be in their possession, is concerned, there is no bar for the appellants to participate in the auction, if it is going to be held by the Bank in future, but the Bank cannot sell the property in piecemeal, because it is not a private seller of the property. The another contention of the appellants that they are tenant prior to the mortgage created by the borrower in favour of the bank in the year 2004 is also not tenable because the rent receipts filed by the appellants along with the memo of appeal are mostly subsequent to it and besides it, nothing on record which may prove that the tenancy of the appellants is prior to the mortgage of the property in question.
In view of the discussions as recorded above, there is no infirmity or illegality in the order impugned, hence the same does not call for any interference by this Tribunal. Consequently, the appeal filed by the appellant is dismissed with no order as to costs.
A copy of this judgment be forwarded to the parties as well as the DRT concerned and be also uploaded on the e-DRT portal.