Shri Kirtikumar Jethmal Bafna vs Kotak Mahindra Bank Limited

Ashok Menon, Chairperson

The matter is taken up for hearing by way of a praecipe filed by the Appellant for seeking urgent relief.

The Appellant who claims to be a tenant has come up with an appeal impugning the order dated 27.02.2024 in Interlocutory Application (I.A.)No. 232 of 2024 in Securitisation Application (S.A.) No. 54 of 2024 on the files of the Debts Recovery Tribunal, Nagpur (D.R.T.) rejecting the application and declining to grant any protection to the Appellant from being dispossessed from the subject premises against which the action has been taken by the first Respondent for recovery of money due from Respondents Nos 2 to 5 who are the borrowers and Respondent No. 6 who is the mortgagor and the present owner of the subject property.

The present matter has a checkered history. The subject premises is a shop room which according to the Appellant was let on oral lease to his grandfather in the year 1947 from the predecessor in the interest of the seventh Respondent. Rent was being paid regularly from 1947 by the grandfather of the Appellant and thereafter by the Appellant’s father. The seventh Respondent had in the meanwhile attempted to evict the Appellant’s grandfather from the premises under the provisions of the Rent Control Act accepting the the tenancy. The Rent Control Court dismissed the petition and an appeal was preferred by the landlord before the Appellate Authority which was allowed. To protect his possession as a tenant the Appellant’s grandfather filed a writ petition No. 220 of 1975 before the Bombay High Court Bench Nagpur which was allowed on 21.11.1980 and the occupation of the subject shop room by the Appellant’s grandfather as a tenant continued. Thereafter, the Appellant’s father and the Appellant inherited the tenancy right and continued their business on the premises.

After having failed to evict the tenant. The seventh Respondent sold the subject property on 29.09.2010 to the sixth Respondent under a registered sale deed. The occupation of the tenant was not mentioned in the sale deed. However, Respondent No. 6 attorned to the tenancy and accepted rent. Rent receipts are produced to prove the tenancy.

Respondent Nos. 2 to 5 borrowed money from the first Respondent and the sixth Respondent secured the loan and created an equitable mortgage concerning the subject property on 31.12.2018 by depositing the title deeds.

The borrowers defaulted payments and the account was classified as a non-performing asset (NPA) which was followed by Sarfaesi action by the first Respondent. The Appellant moved the Civil Court Senior Division, Amaravati for declaration of tenancy and injunction by filing Civil Suit No. 431 of 2019. The suit was dismissed on 17.02.2022 holding that the Appellant had alternate remedy available under Sec. 17(4-A) of the SARFAESI Act and that there was an embargo under Sec. 34 for the Civil Court to entertain the matter. That dismissal has become final.

The first Respondent proceeded to take action under Sec. 13(4) of the SARFAESI Act and a notice was issued on 22.07.2020 for taking symbolic possession of the subject property. The Appellant filed a writ petition before the Nagpur Bench of the Bombay High Court as LDVC No. 803 of 2020. Interim protection was granted during the pendency of the writ and after that, the writ was disposed of on 20.09.2022 granting ten days protection to the Appellant.

In the meanwhile, the first Respondent had obtained an order under Sec. 14 of the SARFAESI Act 24.03.2022 directing physical possession of the subject property to be taken. The protection order of the High Court was in place till 30.09.2022 and after that, the Appellant has also challenged the Sarfaesi measures before the D.R.T. by filing S.A. No. 457 of 2022 seeking protection of his possession as a tenant. The D.R.T. was not enthused and refused to grant protection in the interlocutory petition filed as I.A. No. 2288 of 2022 on 20.12.2022. The Appellant filed Misc. Appeal No. 167 of 2022 before this Tribunal and interim protection was granted to the Appellant vide order dated 30.12.2022 in I.A. No. 166 of 2022. Thereafter, on 31.01.2023 the appeal itself was disposed of directing the D.R.T. to dispose of the S.A. No. 457 of 2022 expeditiously.

The D.R.T. dismissed S.A. No. 457 of 2022 on 24.04.2023 holding that the Appellant cannot continue as a tenant in the premises based on an oral tenancy and without any registered lease deed. The Appellant challenged that dismissal before this Tribunal by filing Appeal No. 30 of 2023.

While Appeal No. 30 of 2023 challenging the dismissal of S.A. No. 457 of 2022 was pending consideration of this Tribunal, it was submitted on behalf of the first Respondent that the bank intends to refrain from proceeding to take physical possession based on the order obtained from the District Magistrate on 24.03.2022. It was, therefore, urged that the challenge to the Sarfaesi action based on the said order of the District Magistrate had become infructuous and fresh action would be taken by the bank. Recording this statement, Appeal No. 30 of 2023 was disposed of as infructuous on 20.06.2023.

Fresh steps were taken before the District Magistrate under Sec.14 but the same was dismissed on 10.01.2024 because there was already an order granting permission to take possession and therefore, a fresh order was not required. The Respondent bank therefore proceeded to take possession of the secured asset. The Appellant filed S.A. No. 54 of 2024 and suffered a dismissal of I.A. No. 232 of 2024 vide the impugned order and hence he is in appeal.

Since the tenancy right claimed by the Appellant has already been determined on 24.04.2023 by the D.R.T. in S.A. No. 457 of 2022 and the appeal preferred therefrom as Appeal No. 30 of 2023 was also dismissed though stealthily and surreptitiously in an underhanded manner, the fact remains that there is no challenge to the D.R.T. order of determination of the right of tenancy in S.A. No. 457 of 2022. The Appellant was represented by a counsel in Appeal No. 30 of 2023 no attempt was made to obtain an order on merits over the order in S.A. No. 457 of 2022 which has now become final.

The Appellant cannot re-agitate the question of tenancy in the present S.A. No. 54 of 2024 since the earlier order in S.A. No. 457 of 2022 would operate as res-judicata. Since the Appellant is not now recognised as a tenant anymore, under Sec. 17(4-A) of the SARFAESI Act, he has no locus to seek protection of possession as a tenant.

Given the above facts and findings, the Appellant is not entitled to any relief, much less to protection of his possession of the subject property, in this I.A. or appeal. The I.A. 177 0f 2034 is dismissed. Nothing survives in this appeal, and hence the Misc. Appeal is dismissed.