BY SRI v. MOHAN
Case Details
- 1 - NC: 2025:KHC:4972 WP No. 19820 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE R DEVDAS WRIT PETITION NO. 19820 OF 2024 (GM-RES) BETWEEN: SMT. P.N. VIJAYALAKSHMI W/O LATE P. NANDAKUMAR, AGED ABOUT 78 YEARS, FLAT NO.H-204, GROUND FLOOR, BLOCK NO.2, SHOBHA DEWFLOWER APARTMENTS, SARAKKI MAIN ROAD, J.P. NAGAR 1ST PHASE, BANGALORE - 560 078. (BY SRI. V. MOHAN, ADVOCATE) AND: 1. HINDUJA LEYLAND FINANCE LTD., …PETITIONER Digitally signed by DHARMALINGAM Location: HIGH COURT OF KARNATAKA REGISTERED OFFICE NO.1, SARDAR PATEL ROAD, CHENNAI - 600 032, BRANCH OFFICE AT, NO.2/6, ABOVE MAX HERO SHOW ROOM, DR. RAJKUMAR ROAD, 4TH BLOCK, RAJAJINAGAR, BANGALORE - 560 010, REPRESENTED BY AUTHORISED OFFICER, MR. VIJAY T, SECURED CREDITOR AND GENERAL MANAGER. (BANKING COMPANY REGISTERED UNDER COMPANIES ACT 1949 - BANKER FOR LESSOR) 2. M/S. SRI. RAGHAVENDRA ART PRODUCTION
Legal Reasoning
Annexure-H is an interim order passed by this Court in RFA.No.363/2021, which was filed by the petitioner's husband Sri.P.Nanda Kumar and Another. The petitioner herein was challenging an order dated 09.04.2021, passed in I.A.No.1/2019, in O.S.No.25451/2017 on the file of IV Additional City Civil and Sessions Judge, Mayohall, Benglauru. It is pointed out that by order dated 28.04.2021, this Court while issuing Emergent Notice, granted interim order as prayed for, thereby staying the order dated - 5 - NC: 2025:KHC:4972 WP No. 19820 of 2024 09.04.2021 in I.A.No.1/2019. It is submitted that despite such an interim order passed by this Court, respondent No.1 has approached the Jurisdictional Magistrate filing an Application under Section 14 of the SARFAESI Act, 2002. 3. It is also contended that in the case of Hemaraj Ratnakar Salian Vs. HDFC Bank Limited & Others, AIR 2021 SC 3880, the Hon'ble Supreme Court has held that if a tenancy under law comes into existence after the creation of a mortgage, but prior to the issuance of notice under Section 13(2) of the SARFAESI Act, 2002, it has to satisfy the conditions of Section 65A of the Transfer of Property Act, 1882. Learned Counsel for the petitioner submits that the petitioner has entered into a Lease Agreement on 01.01.2023 and the petitioner stands protected under the provisions of Section 65A of the Transfer of Property Act. - 6 - NC: 2025:KHC:4972 WP No. 19820 of 2024 4. However, on going through the said judgment, it is clear that the borrower would be required to seek consent of the secured creditor for transfer of secured asset by way of sale, lease or otherwise, after issuance of the notice under Section 13(2) of the SARFAESI Act, 2002 and admittedly, no such consent has been sought by the borrower. If the lease is created prior to issuance of notice under Section 13(2) of the Act at the hands of the secured creditor, for a limited purpose, protection is provided to such a lessee. Section 65A of the Transfer of Property Act, 1882, provides that the subject to the provisions of sub-section (2) of Section 65A, of the Act, 1882, a mortgagor, while lawfully in possession of the mortgaged property, shall have power to make leases thereof which shall be binding on the mortgagee. However, it would be subject to sub- section (2) of the provision. Sub-section 2(a) provides that every such lease shall be such as would be made in the ordinary course of management of the property concerned, and in accordance with any local law, - 7 - NC: 2025:KHC:4972 WP No. 19820 of 2024 custom or usage. It is important to notice that Clause (c) provides that no such lease shall contain a covenant for renewal. Clause (d) provides that every such lease shall take effect from a date not later than six months from the date on which it is made. Clause (e) provides that in the case of a lease of buildings, whether leased with or without the land on which they stand, the duration of the lease shall in no case exceed three years, and the lease shall contain a covenant for payment of the rent and a condition of re-entry on the rent not being paid within a time therein specified. 5. Per contra, learned Counsel for respondent No.1 submits that the ‘Renewal Rental Agreement’ has been produced at Annexure-C and it is not a registered document. Learned Counsel submits that although the stamp duty is said to be paid and collected by the Deputy Commissioner of Stamps, Jayanagar, however, it is not a registered instrument. It is also submitted that in terms of Section 17(1)(d) of the Registration - 8 - NC: 2025:KHC:4972 WP No. 19820 of 2024 Act, 1908, any lease of immovable property from year- to-year or for any term exceeding one year would require compulsory registration. That being the position, it is submitted that the petitioner cannot contend before this Court that she is a protected tenant and therefore, before taking possession of the secured asset, respondent No.1 should have issued notice to the petitioner and should have followed all the procedures as contemplated under law. 6. Having heard the learned Counsel for the petitioner, learned Counsel for the contesting respondent No.1 and on perusing the petition papers, this Court is of the considered opinion that the petitioner is not a protected tenant, who could seek protection under Section 65A of the Transfer of Property Act. It is also noticeable that the petitioner filed a suit in O.S.No.25451/2017, before the Additional City Civil and Sessions Court, Bengaluru, against the respondents herein, including the Financial - 9 - NC: 2025:KHC:4972 WP No. 19820 of 2024 Institution, seeking a direction that the Financial Institution should not evict the petitioner without due process of law. The said suit was dismissed on the ground that the measures taken by the Financial Institution under SARFASEI Act, cannot become a subject matter of a litigation before a civil court. The application filed by respondent No.1 under Order VII Rule 11 of CPC was allowed and the plaint was rejected. Following the same, the petitioner filed appeal in RFA No.363/2021 and there appears to be an interim order insofar as the order passed in I.A.No.1/2019, rejecting the plaint. That by itself will not enable the petitioner to challenge an Application filed by respondent No.1, before the jurisdictional Magistrate under Section 14 of the SARAESI Act. 7. It is by now clear that the petitioner is seeking to come to the rescue of respondents No.2 to 4, who are the borrowers from respondent No.1-Bank. The other respondents have set up the petitioner to ensure - 10 - NC: 2025:KHC:4972 WP No. 19820 of 2024 that the secured assets are not sold and the Financial Institution does not recover the money lent to the private respondents herein. Surely, the law protecting the interest of a tenant is only under certain circumstances, where no harm would be caused to the secured assets of the secured creditor. If such petitions are allowed, the secured creditor would never be able to recover the outstanding loan amount along with interest. 8. For the reasons stated above, this Court is convinced that the writ petition has no merits.
Arguments
PROP MR. G. BHAKTHAVATHSALAM, FLAT NO.H 204, GROUND FLOOR, - 2 - NC: 2025:KHC:4972 WP No. 19820 of 2024 2ND BLOCK, SHOBHA DEWFLOWER, M/G GARDEN, 4TH MAIN, J P NAGAR, 1ST PHASE, BANGALORE - 560 078, REGISTERED FIRM. ALSO AT PROPRIETOR MR. G. BHAKTHAVATSALAM, S/O LATE G. PANDURANGAIAH, AGED ABOUT 54 YEARS, R/AT NO.A-18G2, BRIGADE MEADOWS, KANAKAPURA ROAD, NEAR ART OF LIVING, UDAYAPURA POST, OPP ANJANEYA TEMPLE, BANGALORE - 560 082 BORROWER/LESSOR. 3. MRS. SUNITHA W/O MR. G. BHAKTHAVATSALAM, AGED ABOUT MAJOR, FLAT NO.H-204, GROUND FLOOR, 2ND BLOCK, SHOBHA DEWFLOWER, M/G GARDEN, 4TH MAIN, J P 1ST PHASE, BANGALORE - 560 078. ALSO AT MRS. G SUNITHA, W/O MR G. BHAKTHAVATSALAM, AGED ABOUT MAJOR, R/AT NO.A-18G2, BRIGADE MEADOWS, KANAKAPURA ROAD, NEAR ART OF LIVING, UDAYAPURA POST, OPP ANJANEYA TEMPLE, BANGALORE - 560 082. 4. MR. G. SANKETH S/O MR. BHAKTHAVATSALAM, AGED ABOUT 32 YEARS, R/AT NO.A/18G2, BRIGADE MEADOWS, KANAKAPURA ROAD, UDAYAPURA POST, OPPOSITE TO ANJANEYA TEMPLE, BANGALORE - 560 008. ALSO AT MR. G. SANKETH, S/O MR. G. BHAKTHAVATSALAM, AGED ABOUT 32 YEARS, - 3 - NC: 2025:KHC:4972 WP No. 19820 of 2024 R/AT NO.A-18G2, BRIGADE MEADOWS, KANAKAPURA ROAD, NEAR ART OF LIVING, UDAYAPURA POST, OPP ANJANEYA TEMPLE, BANGALORE - 560 082, BORROWER/LESSOR. (BY SMT. RADHA R, ADVOCATE FOR R1; SRI. VISHAL TIWARI, ADVOCATE FOR R2; SRI. K.N. SURESH KUMAR, ADVOCATE FOR R3 AND R4) …RESPONDENTS THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE PROCEEDINGS INITIATED BY 1ST RESPONDENT- VIDE BANK CRL.MISC.NO.5319/2023 PENDING BEFORE THE CHIEF METROPOLITAN MAGISTRATE, BANGALORE (ANNEXURE.A) IN RESPECT OF THE SCHEDULE PROPERTY AND ETC. SARFAESI U/S.14 ACT OF THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE R DEVDAS ORAL ORDER The petitioner who claims to be a tenant under respondent No.4-Sri.G.Sanketh and Sri.G.Bhaktha- vatsalam, who is none other than respondent No.2 and the husband of respondent No.3 and father of respondent No.4, under a Renewal Rental Agreement dated 01.01.2023. The petitioner is aggrieved of the measures taken by respondent No.1-Financial Institution under Section 14 of the Securitisation and - 4 - NC: 2025:KHC:4972 WP No. 19820 of 2024 Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (for short, 'the SARFAESI Act'). Respondent No.1-Financial Institution has approached the Chief Metropolitan Magistrate, Bengaluru in Crl.Misc.5319/2023 seeking permission to take possession of the secured assets and it had also sought for the jurisdictional police to render assistance to respondent No.1 to take possession of the property. 2. Learned Counsel for the petitioner submits that
Decision
Accordingly, the writ petition stands dismissed. 9. Pending I.As., if any, stand disposed of. Sd/- (R DEVDAS) JUDGE rv,DL List No.: 1 Sl No.: 11 CT: BHK