Calcutta High Court
Arun Kumar Sarswat vs The State Of West Bengal & Others on 5 May, 2009
Equivalent citations: AIRONLINE 2009 CAL 15
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
WP No. 247 of 2009
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
ORIGINAL SIDE
ARUN KUMAR SARSWAT
-Versus-
THE STATE OF WEST BENGAL & OTHERS
For the Petitioner: Mr. A. Haque, Adv.,
Mr. Abdul Monsoor, Adv.
For the State of West Bengal: Mr. Balai Chandra Roy, Adv. General,
Mr. Ashim Kumar Chatterjee, Adv.
For the Bank: Mr. Soumen Sen, Sr. Adv.,
Mr. K. Sen, Adv.,
Mr. S. Dasgupta, Adv.
Hearing concluded on: May 4, 2009.
BEFORE
The Hon'ble Justice
SANJIB BANERJEE
Date: May 5, 2009.
SANJIB BANERJEE, J. : -
The writ petitioner questions the propriety of the respondent bank in
having caused the petitioner to be dispossessed from a property without following
due process of law.
The petitioner claims to have entered into an agreement with Super Tech
Limited for being inducted as a monthly tenant at an apartment measuring about
365.72 sq.ft. on the sixth floor of premises no. 18A, Park Street. The agreement,
a copy whereof is annexure P-2 to the petition, is dated December 4, 2002. The
document, on a stamp paper of Rs.10/-, records that a security deposit of Rs.1
lakh had been paid by the petitioner which was refundable without interest at
the time of the petitioner vacating the premises. The tenancy was to be for a
period of 15 years and the petitioner was to use the flat either for residential or
business purpose.
At the fifth paragraph of the petition it is averred that on November 16,
2005 some persons "claiming themselves to be officers of Allahabad Bank" called
at the petitioner's office at the said premises and represented that since the
"petitioner's landlord" had failed to repay a loan of Rs.1,80,57,350/-, an officer of
the bank authorised under the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 (the said Act) was
empowered to take possession of the premises which had been mortgaged to the
bank. It is stated in the petition that the authorised officer of the bank took
symbolic possession of the premises since the petitioner was in possession
thereof. It is evident from paragraph 5 of the petition that the bank attempted to
serve a notice on the petitioner but the "petitioner refused to accept the notice."
The narration in the petition quantum leaps to March, 2009. The petitioner
says that he had "altogether forgotten about the incident when suddenly on
13.03.2009 the authorised officer of (the bank) along with a team of police
personnel ... and local musclemen forced into (the) petitioner's office." The
petitioner claims to have been dispossessed on such date and subsequent
enquiry by the petitioner revealed that the bank had approached the chief
metropolitan magistrate for police protection to obtain possession of the
premises. A copy of the magistrate's order of September 9, 2008 has been
appended to the petition. It is the petitioner's case that the bank suppressed the
fact that the petitioner was in possession of the property at the time that it
approached the magistrate under Section 14 of the said Act. The petitioner
insists that the bank could not have obtained possession of the property from the
petitioner without the petitioner having due notice of any proceedings in such
regard and without any adjudication being made in the petitioner's presence.
The petitioner has relied on a judgment of this Court reported at AIR 2008
Calcutta 9 (Manager, UCO Bank v. Samar Sarkar & ors.). In that case an order of
dismissal of a defendant's application for rejection of a plaint was carried in
revision under Article 227 of the Constitution. The plaintiff had sought a
declaration of his tenancy rights under a constituent of a bank and a further
declaration that the plaintiff could not be evicted without due process of law and
ancillary reliefs. The defendant bank applied under Order VII Rule 11 of the Civil
Procedure Code on the ground that the suit was barred under Sections 13, 17
and 34 of the said Act of 2002. The revisional application failed upon the
following view taken at paragraph 10 of the report:
"10. None of the provisions of the said Act authorises the bank to recover
possession from a tenant under the borrower in a mortgaged property in
the process of recovery of its dues from its borrower. If that be so, the bank
cannot evict the tenant of a borrower from a mortgaged property by virtue
of any of the provisions of the said Act and if any action of the bank which
is not protected under the said Act, is challenged by such a tenant in a
suit, such challenge cannot be held to be barred under the provision of
Section 17 of the said Act."
The petitioner relies on a judgment reported at AIR 1968 SC 620 (Lallu
Yashwant Singh v. Rao Jagdish Singh & ors.) to emphasise on the approval by the
Supreme Court of the Privy Council's enunciation of the law in 1924, that in
India persons are not permitted to take forcible possession, they must obtain
such possession as they are entitled to through a court. It is the petitioner's
contention that in the absence of any form of adjudication, even a rank
trespasser cannot be removed from any property and the entire procedure
adopted by the bank which is an authority answering to the description under
Article 12 of the Constitution, smacks of vindictiveness and arbitrariness.
The bank has produced a copy of a document of September 17, 1999
evidencing mortgage of the same property by Super Tech Alloy Foundry Private
Limited in favour of the bank. The bank refers to clause 3 of the document:
"3. The Borrower(s) further undertake(s) to the Bank that during the
continuance of the said Mortgage to be created by Deposit of Title Deeds
the Borrower(s) will not without the written consent of the Bank first hand
and obtained, grant any lease of or create any further charge on the
mortgage property or any part thereof in favour of any person or persons,
firm or Company or any other body corporate and that any lease or charge
if granted or created without the aforesaid consent of the Bank shall not
and will not be binding on the Bank and will be treated by the Bank as
void and inoperative."
The bank says that the view expressed in Samar Sarkar is an aberration
and refers to judgments reported at AIR 2007 Madras 148 (Sree Lakshmi
Products Rep. by its Partner v. State Bank of India), AIR 2007 Gujarat 172
(Oriental Bank of Commerce v. Naresh Khushaldas Gangtani), AIR 2007 Kerala
114 (Business India Builders & Developers Ltd. v. Union Bank of India & ors.), AIR
2008 Kerala 179 (Kottakkal Co-operative Urban Bank v. T. Balakrishnan & anr.),
AIR 2008 P&H 107 (M/s. Delhi Punjab Goods Carrier Pvt. Ltd. v. Bank of Baroda),
AIR 2008 Gujarat 110 (Dena Bank v. Shri Sihor Nagarik Sahakari Bank Ltd. &
ors.) and AIR 2009 Madras 10 (Indian Overseas Bank v. M/s. Sree Aravindh
Steels Ltd. & ors.) for such purpose.
In Sree Lakshmi Products the petitioner invoked Article 226 of the
Constitution to resist the bank from removing the petitioner from a property on
the ground that a lease obtained by the petitioner therein from the principal
debtor was protected under the Rent Control Act. The Division Bench noticed the
purpose of the said Act of 2002 and the Supreme Court pronouncement on the
scheme of the said Act expressed in Transcore v. Union of India reported at AIR
2007 SC 712. The Madras High Court read the Supreme Court dictum in
Transcore to imply that a bank or financial institution was entitled to take actual
possession of the secured assets from the borrower or from any other person in
terms of Section 13(4) of the said Act. The view expressed is that a party
aggrieved by such dispossession would have to take recourse under Section 17 of
the Act and the deserving applicant was entitled to have the clock put back and
status quo ante restored.
In Naresh Khushaldas Gangtani a Single Judge was of the opinion that in
view of the provisions of the said Act of 2002 the jurisdiction of the civil court to
entertain a suit had been taken away and the civil court would inherently lack
jurisdiction to receive a claim by a person dispossessed or facing a threat of
dispossession by a bank or financial institution exercising its rights under the
said Act.
A Division Bench of the Kerala High Court observed in Business India
Builders that if a borrower let out a property in violation of the terms of a
declaration furnished to the bank, the tenant in occupation of the secured asset
could be evicted by the bank under the said Act of 2002 as it had overriding
effect over the Rent Act in Kerala. A Single Judge of the same Court recognised in
Kottakkal Co-operative Urban Bank that a transferee of a property sold by a
secured creditor on the strength of de jure possession had the right to demand
actual physical possession from the secured creditor.
A Division Bench of the Punjab and Haryana High Court held in M/s. Delhi
Punjab Goods Carrier Pvt. Ltd. that if a tenancy was granted by a borrower after
creating a security in respect of the same property in favour of the creditor, the
tenant was not entitled to any protection under law as the tenant was subject to
the mercy to the secured creditor. Paragraph 2 of the short judgment is apposite:
"2. From the above principles of law it is evident that tenancy has to be
proved by a document or otherwise prior to the date of creation of charge of
equitable mortgage. It is well settled that a mortgagee or mortgagor cannot
induct a tenant without mutual agreement and confer upon a tenant any
right to the prejudice of either of the parties. In the instant case, the
relationship of the petitioner as a tenant with the borrower as a landlord
admittedly came into existence after the creation of charge by the borrower
on the property which is under the tenancy of the petitioner and, therefore,
no protection in law would be available to such a tenant and above
principles laid down by Hon'ble the Supreme Court would fully apply to the
facts of the instant case and it has to be held that the petitioner in his
capacity as tenant does not enjoy any right qua the charge holder-
respondent Bank. The writ petition is wholly misconceived and is thus
liable to be dismissed."
A Single Judge of the Gujarat High Court dealt with a tenancy in Shri Sihor
Nagarik Sahakari Bank Ltd. that had been created prior to the borrower-landlord
mortgaging the property to secure a debt. It was in such context that it was
observed that a secured creditor would not have the authority under the said Act
of 2002 to extinguish the rights of a tenant who had entered into a possession
prior to the security being created by the landlord. Implicit in the judgment is the
recognition that if the tenancy was created subsequent to the mortgage, the
secured creditor would be entitled to dispossess the tenant by enforcing its rights
under the said Act of 2002.
In Sree Aravindh Steels Ltd. the bank had applied before a chief judicial
magistrate for taking possession of the asset under Section 14 of the said Act.
The application was dismissed and the petitioner carried the order to the High
Court. The Court held that no notice was necessary to be issued to borrowers in
proceedings under Section 14 of the said Act.
The bank has relied on a Division Bench judgment of the Bombay High
Court reported at 2007 CrLJ 2544 (Trade Well v. Indian Bank & anr.). The
question posed in that case was whether in proceedings under Section 14 of the
said Act the chief judicial magistrate or the district magistrate was required to
give notice to the borrower or any person who may be in possession of the
secured asset and give such person a hearing. The answer is found from the
following passages at paragraphs 67-68 and 77 of the report:
"67. When the bank takes any measures under Section 13(4), on account
of failure of the borrower to repay the liability is already crystallized.
Similarly when the secured creditor approaches the CMM/DM for
assistance to take possession of the secured asset, the liability having been
crystallized, there can be no adjudication about it at that stage. Possession
has to be taken by non-adjudicatory process. There is no question of
pointing out to the CMM/DM at that stage that the person who is to be
dispossessed is a tenant, or that he has a prior registered sale deed or that
in case of simple mortgage, ownership rights are not transferred; that the
mortgagee is only entitled to an obligation to pay and, hence, possession
cannot be taken or that such a course will improve or change the contract
etc. Grievance that reasons for not accepting the objections were not
communicated can also not be raised at that stage because consideration
of reply is in the realm of adjudication which cannot be done under Section
14. Besides as per proviso to Section 13(3-A) and explanation to Section
17, non-communication of reasons to the borrower does not confer on the
borrower or any person right to prefer an application under Section 17 at
the stage of communication. This is the scheme of the NPA Act. It is so
framed to achieve its object. At first blush this may appear harsh. But it is
not so. The borrower and the third party is not remedy-less. Remedy is
provided in Section 17 where appropriate relief can be given to them. It is
after measures under Section 13(4) are taken that an application under
Section 17 can be filed by a borrower or any person and in that
application, all grievances including the grievance that reasons were not
communicated can be voiced. Prior to that, at no point of time any
grievances can be raised. Section 17 offers an adequate remedy. We shall
advert to Section 17 a little later.
"68. In any case, it is also held by the Supreme Court in Transcore's case
(supra), that if the measures undertaken by the secured creditor come in
conflict with any other law the provisions of Section 13(4) override these
provisions and that Section 35 gives an overriding effect to the NPA Act."
"77. In our opinion, to secure its object the NPA Act has by necessary
implication ruled out giving hearing either to the borrower or third parties
till the application is filed under Section 17. As observed by the Supreme
Court in Transcore's case (supra) Section 6 of the NPA Act inter alia states
that the bank or financial institution may, if it considers appropriate give a
notice of acquisition of financial assets by any securitisation company or
reconstruction company to the borrower and to any other concerned
person but they may or may not give notice to the borrower regarding
acquisition of financial assets the reason being that assets are transferable
overnight. Section 13(2) contemplates a notice to the borrower calling upon
him to discharge his liabilities. Section 13(3A) requires the secured creditor
to communicate to the borrower reasons for not accepting his
representation or objection and proviso thereto states that such
communication shall not confer right on the borrower to make an
application under Section 17 at that stage. Section 14 with which we are
concerned here does not contemplate any notice to the borrower or a third
party. It is only Section 17 which states that any person including
borrower can make an application to DRT being aggrieved by any measure
taken under Section 13(4). Explanation to Section 17 clarifies that reasons
communicated to a borrower at the stage of communication will not confer
on the person including borrower any right to make an application to DRT
under Section 17(1). Section 18 again confers right on any person
aggrieved by an order of DRT under Section 17 to file an appeal before the
Appellate Tribunal against the said order. Therefore, third party was in the
mind of the legislature when it enacted the NPA Act. Wherever necessary
reference is made to third party. Nothing prevented the legislature from
specifically making a provision in Section 14 for notice to the borrower or
third party. It purposely did not make provision for notice or hearing being
given to the borrower or third party at the stage of Section 14. Looking to
the scheme of the NPA Act, we are of the opinion that notice or hearing to
the borrower or third party is excluded at the stage of Section 14 by
necessary implication."
The bank says that there is no further scope of argument if the drift of an
unreported Division Bench judgment of this Court rendered in MAT No. 2763 of
2007, CAN No. 9182 of 2007 (Deepak Gupta v. Union of India & ors.) delivered on
December 20, 2007 is appreciated:
"Mr. Roy, the learned advocate appearing on behalf of the appellant
tried to convince us that his client being a tenant under the debtor, the
bank could not proceed against the asset of his client and his tenancy will
continue even if the property is sold to an outsider.
Mr. Pal Chowdhury, the learned advocate appearing on behalf of the
Bank, however, points out that even on the basis of the document relied
upon by the appellant, his tenancy was created in the year 2006 after the
mortgage was created by the landlord, and, therefore, in view of Section
65A of the Transfer of Property Act, the tenancy is subject to the mortgage
in favour of the bank.
After going through the aforesaid document, we find substance in the
contention of Mr. Pal Chowdhury. We, therefore, find that all that the
appellant can be permitted is to remove the goods within 72 hours from
today. The respondent-bank is permitted to take possession of the
tenanted portion of the appellant after expiry of 72 hours from today."
The purpose and scheme of the said Act have been conclusively
commented upon by the Supreme Court in Mardia Chemicals [(2004) 4 SCC 311]
and Transcore. Up to the stage of Section 13(2) of the said Act, no grievance can
be entertained as to the conduct of the bank. An objection may be raised by a
noticee following the receipt of a notice under Section 13 (2) of the said Act which
the bank or financial institution must consider under sub-section (3-A) of Section
13 which has been introduced into the said Act. Subsequent steps taken by a
bank may be questioned by a person aggrieved in accordance with the provisions
of the said Act. It does not imply that a writ court is denuded of all authority to
receive a petition under Article 226 of the Constitution if a petition is brought
against an authority within the meaning of Article 12 of the Constitution seeking
to enforce its rights as a secured creditor. An element of self-restraint, upon
appreciating the availability of an efficacious alternative remedy, would prompt
the writ court to not receive a challenge unless the secured creditor's conduct
appeared to be without jurisdiction or patently perverse or in complete derogation
of the principles of natural justice.
The adjudication that a person may invite as to the conduct of the secured
creditor is primarily embodied in Section 17 of the Act. Section 14 is a recognised
avenue for the ultimate enforcement of the secured creditor's right and is, in a
sense, the culmination of all that is specially carved out for a secured creditor
entitled to invoke the provisions of the said Act.
That an application of the ultimate enforcement of the right may be made
to a district magistrate, as recognised in Section 14, leads to the inescapable
conclusion that the function of the authority approached under Section 14 would
be, if not ministerial, more administrative than judicial. Section 14 of the Act is
incidental to, and for the purpose of facilitating the exercise of the rights under,
Section 13(4) of the Act.
It is necessary, in this context, to notice sub-sections (1) and (4) of Section
13, Section 14 and Section 17 of the Act:
"13. Enforcement of security interest. --(1) Notwithstanding anything
contained in Section 69 or Section 69A of the Transfer of Property Act,
1882 (4 of 1882), any security interest created in favour of any secured
creditor may be enforced, without the intervention of the court or tribunal,
by such creditor in accordance with the provisions of this Act.
...
(4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:--
(a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset;
(b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset:
Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt:
Provided further that where the management of whole of the business or part of the business is severable, the secured creditor shall take over the management of such business of the borrower which is relatable to the security for the debt;
(c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor;
(d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt."
"14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset.--(1) Where the possession of any secured assets is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured assets, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him--
(a) take possession of such asset and documents relating thereto;
and
(b) forward such asset and documents to the secured creditor.
(2) For the purpose of securing compliance with the provisions of sub- section (1), the Chief Metropolitan Magistrate or the District Magistrate may take or cause to be taken such steps and use, or cause to be used, such force, as may, in his opinion, be necessary.
(3) No act of the Chief Metropolitan Magistrate or the District Magistrate done in pursuance of this section shall be called in question in any court or before any authority."
"17. Right to appeal. --(1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, may make an application along with such fee, as may be prescribed to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken:
Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.
Explanation. --For the removal of doubts it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under sub-section (1) of section
17.
(2) The Debts Recovery Tribunal shall consider whether any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder.
(3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in sub-section (4) of section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management of the secured assets to the borrower or restoration of possession of the secured assets to the borrower, it may by order, declare the recourse to any one or more measures referred to in sub- section (4) of section 13 taken by the secured assets as invalid and restore the possession of the secured assets to the borrower or restore the management of the secured assets to the borrower, as the case may be, and pass such order as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub- section (4) of section 13.
(4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under sub-section (4) of section 13, is in accordance with the provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to one or more of the measures specified under sub-section (4) of section 13 to recover his secured debt.
(5) Any application made under sub-section (1) shall be dealt with by the Debts Recovery Tribunal as expeditiously as possible and disposed of within sixty days from the date of such application:
Provided that the Debts Recovery Tribunal may, from time to time, extend the said period for reasons to be recorded in writing, so, however, that the total period of pendency of the application with the Debts Recovery Tribunal, shall not exceed four months from the date of making of such application made under sub-section (1).
(6) If the application is not disposed of by the Debts Recovery Tribunal within the period of four months as specified in sub-section (5), any party to the application may make an application, in such form as may be prescribed, to the Appellate Tribunal for directing the Debts Recovery Tribunal for expeditious disposal of the application pending before the Debts Recovery Tribunal and the Appellate Tribunal may, on such application, make an order for expeditious disposal of the pending application by the Debts Recovery Tribunal.
(7) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be, dispose of application in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and the rules made thereunder."
Sections 69 and 69A of the Transfer of Property Act, 1882 confer certain rights on a mortgagee subject to the restrictions contained therein. The non- obstante clause found in Section 13(1) of the said Act of 2002 empowers a secured creditor covered by such Act to enforce any security interest created in its favour, without the intervention of any court or tribunal, in accordance with the provisions of the said Act. Section 13(4) sets out the measures that a secured creditor covered by the said Act may take recourse to for the purpose of recovering the secured debt. The Supreme Court has recognised in Transcore that the Act of 2002 provides for recovery of possession by non-adjudicatory process. The Act of 2002 is an exception to the general principle. The scheme of the Act of 2002 envisages possession being obtained and a subsequent adjudication as to whether the possession was obtained in accordance with the provisions of the said Act. The concept of obtaining possession by due process of law, thus, stands modified in the context of the right of a secured creditor covered by the Act of 2002 to enforce its security interest.
In the unreported judgment of Deepak Gupta, the mandamus appeal was carried to the Division Bench by a writ petitioner upon the writ petition not being entertained and the writ petitioner only being given liberty to approach the Debts Recovery Tribunal in terms of Section 17 of the Act of 2002. The Division Bench noticed the writ petitioner's contention that since the writ petitioner was a tenant under the borrower the secured creditor could not proceed against the tenanted property and repelled such argument. This Division Bench judgment was not noticed in the Samar Sarkar matter. It would appear that the observation in Samar Sarkar that the provisions of the Act of 2002 did not authorise a bank to recover possession of a mortgaged property from a tenant, is at variance with the Deepak Gupta judgment of the Division Bench.
In any event, the question in the Samar Sarkar case was as to whether a suit brought by a tenant apprehending dispossession by the secured creditor would be maintainable. Though the contemporary view, as would appear from the other authorities cited here, indicates that such a suit may not be maintainable, such question does not arise in the present case. The issue here is as to whether a tenant coming into possession of a property after the creation of a mortgage in respect thereof is entitled to any notice or a process of judicial adjudication before being dispossessed by the secured creditor.
Again, the issue is covered by the Division Bench judgment in Deepak Gupta. The writ petitioner here claims to have entered into the agreement at a time subsequent to the execution of the undertaking by the borrower- landlord in favour of the bank. Section 65A of the Transfer of Property Act recognises a mortgagor's right to lease out the mortgaged property, subject to the conditions therein. Sub-section (3) says that the mortgagor would have a right to create a lease of the mortgaged property only if and as far as a contrary intention is not expressed in the mortgage deed. Section 65-A of the Act of 1882 may be seen:
"65-A. Mortgagor's power to lease.--(1) Subject to the provisions of sub- section (2), a mortgagor, while lawfully in possession of the mortgaged property, shall have power to make leases thereof which shall be binding on the mortgagee.
(2) (a) 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, custom or usage.
(b) Every such lease shall reserve the best rent that can reasonably be obtained, and no premium shall be paid or promised and no rent shall be payable in advance.
(c) No such lease shall contain a covenant for renewal.
(d) Every such lease shall take effect from a date not later than six months from the date on which it is made.
(e) 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 condition of re-entry on the rent not being paid within a time therein specified.
(3) The provisions of sub-section (1) apply only if and as far as a contrary intention is not expressed in the mortgage-deed; and the provisions of sub-section (2) may be varied or extended by the mortgage-
deed and, as so varied and extended, shall, as far as may be, operate in like manner and with all like incidents, effects and consequences, as if such variations or extensions were contained in that sub-section."
The agreement of September 17, 1999 between the borrower and the secured creditor records the express undertaking that the borrower would not, without the written consent of the bank first obtained, grant any lease of or create any further charge on the mortgaged property or any part thereof. It is not the writ petitioner's case here that any previous consent in writing of the bank had been obtained by the borrower in creating the tenancy in favour of the petitioner. Even if the petitioner had urged that the bank had given previous consent, the petitioner's only remedy was under Section 17 of the Act of 2002.
The principal ground urged by the petitioner in invoking the extraordinary jurisdiction is that the rules of natural justice had been violated by a nationalised bank. Not every feature of the rules of natural justice needs to be rigidly complied with in every instance, nor will the writ court make such an exacting demand. What is imperative is that unless the rules of procedure permit a summary process, there has to be substantial compliance with the rules of fair play that any form of justice would demand. In every case where the court has condoned a procedure at variance with the accepted norms when the rules of natural justice have been breached without any provision in that regard, the court has been satisfied that even if the principles of natural justice were complied with the result would have been the same. The procedure recognised by the said Act permits possession before adjudication. Further, the petitioner had notice of the bank's right in the year 2005 and it is the petitioner's assertion that the petitioner refused to accept the notice that the bank had attempted to serve on him then.
There is no merit in the petitioner's grievance. WP No. 247 of 2009 is dismissed with costs assessed at 300 GMs to be paid to the bank. The petitioner may still try the petitioner's luck in other proceedings that may be available to the petitioner under the said Act of 2002.
Urgent certified photostat copies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(Sanjib Banerjee, J.)