Rajkot vs Jignesh on 10 May, 2011

[Cites 49, Cited by 0]

Gujarat High Court

Rajkot vs Jignesh on 10 May, 2011

1. The petitioner, a Cooperative Bank, has brought under-challenge the order dated 31.08.2010 passed by the Debts Recovery Appellate Tribunal (hereinafter referred to as "the Appellate Tribunal") in Appeal No.162 of 2010 whereby the Appellate Tribunal confirmed the order dated 25.05.2010 passed by the Debts Recovery Tribunal-II (hereinafter referred to as "the DRT") in Application No.56 of 2010. The petitioner has also challenged the aforesaid order dated 25.05.2010 passed by the DRT.

1.1 While allowing the application filed by present respondent no.1, the DRT, vide the aforesaid order dated 25.05.2010, directed the petitioner-Bank to restore the possession of the disputed property in favour of the respondent no.1. The Appellate Tribunal, by the order dated 31.08.2010, confirmed the said order passed by the DRT. The petitioner-Bank is aggrieved by the said orders and directions. Hence, present petition.

2. The petition on hand raises the issue regarding the extent of the jurisdiction of DRT in the matter concerning disputes pertaining to secured asset in possession of / occupied by tenant.

2.1 Mr.Navin Pahwa, learned advocate has appeared for the petitioner-Bank and Mr.Gogia, learned advocate has appeared for the respondent no.1. Though served no one has entered appearance for the respondent no.2. Having regard to the rival contentions, Rule. Mr. Gogia, learned advocate has waived service of Notice of Rule on behalf of the respondent No.2. With the consent of the learned advocates appearing for the contesting parties, the petition is taken up for hearing and final decision today.

3. So as to appreciate the issue raised by the parties contesting present petition, it is necessary to take into account the factual matrix. The relevant facts are as follows:-

3.1 The petitioner is a Cooperative Society registered under the Gujarat Cooperative Societies Act, 1961 and is, inter-alia, engaged in banking activity. The petitioner is also governed by the provisions under Banking Regulation Act, 1949.

3.2 The petitioner-Bank had given loan to the respondent no.2 for purchasing the property in dispute. The respondent no.2 had, for the said purpose, mortgaged the property in favour of the Bank.

3.3 It is the claim of the petitioner-Bank that at the time when the respondent no.2 created the mortgage in favour of the petitioner-Bank neither there was any tenant in possession and occupation of the disputed property nor any tenancy rights in favour of anyone was existing and/or created by the borrower and the property in question was vacant. The respondent No.1 claimed, and continues to claim, that he is the tenant and his allegations are diagonally opposite to the case put-up by the petitioner Bank inasmuch as the bank claims that vacant property was mortgaged while the respondent No.1 is claiming pre-existing tenancy.

3.4 Sometime after the loan was availed and mortgage was created, the respondent no.2 failed to pay the installments and eventually defaulted in repayment of the loan.

3.5 Therefore, in May-2005, the petitioner-Bank issued notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the Act"). The respondent no.2, allegedly, did not pay any heed to the said notice. Therefore, the aforesaid notice was followed by notice under Section 13(4) of the Act. Since the respondent no.2 neglected both the notices, request to the District Magistrate was made under Section 14 of the Act which culminated into order passed by the District Magistrate in exercise of powers under Section 14 of the Act.

3.6 The petitioner has claimed that subsequently the respondent no.1, (who claims to be the tenant) filed a Civil Suit in the Small Cause Court at Rajkot and invoked the provision under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the "Rent Act") which was registered as Civil Suit No.11 of 2010. The respondent no.1 prayed for declaration that his tenancy rights are protected under the Rent Act and the defendants are not entitled to summarily evict him. The petitioner-Bank was impleaded as defendant no.1 in the said suit. The present respondent no.1 had also prayed for interim orders restraining the defendants including present petitioner-Bank, from evicting him from the premises in question. The application seeking interim order (Exh:5) was heard and by order dated 18.02.2010, the learned Trial Court rejected the said Exh:5 Application.

3.7 The petitioner-Bank has heavily relied on the said order passed by the learned Trial Court below Exh:5 so as to contend that the Court of Competent Jurisdiction has already held against the respondent no.1 so far as his claim of pre-existing tenancy on the date of mortgage is concerned. Per contra, the respondent no.1 has claimed that the Exh:5 was not entertained and was rejected on ground of lack of jurisdiction.

3.8 In this backdrop, the petitioner-Bank has claimed that it has taken over the possession of the subject property in April-2010 and has applied its seal.

3.9 It appears that in view of such development, the respondent no.1 withdrew the aforesaid Civil Suit No.11 of 2010 from the Small Cause Court and also withdrew the appeal which he had preferred before the District Court against the order passed below Exh:5 Application.

3.10 Subsequently, somewhere in April-2010, the respondent no.1 filed an Application under Section 17 of the said Act. The said application was registered as Application No.56 of 2010.

3.11 After hearing the parties, the DRT, vide order dated 25.05.2010, allowed the application and directed the petitioner-Bank to restore the possession of subject property in favour of the respondent no.1.

Aggrieved by the said order, the petitioner-Bank preferred appeal before the Appellate Tribunal, which was registered as Appeal No.162 of 2010. After hearing the parties, the Appellate Tribunal dismissed the appeal vide order dated 31.08.2010 and directed the petitioner-Bank to restore the possession of the property to the respondent no.1.

3.12.

The petitioner-Bank has, claiming that all along the order staying the implementation and operation of the directions to restore the possession has been operating in favour of the petitioner-Bank, preferred present petition and challenged the orders passed by the DRT and the Appellate Tribunal.

4. The petitioner's counsel initially heavily relied on the learned Trial Court's order below Exh:5 so as to claim that the respondent no.1, even otherwise, does not have any case in its favour on the ground of pre-existing tenancy, however, subsequently he did not press the submissions on the strength of order below Exh:5. The learned counsel for the petitioner has submitted, inter-alia, that the DRT has no jurisdiction to entertain and decide the issue concerning tenancy, much less the dispute regarding pre-existing tenancy. He has also contended that the DRT has no jurisdiction, under Section 17(3) to direct the Bank to restore the possession. The learned counsel for the petitioner has also contended that learned Tribunal erred, rather exceeded the jurisdiction, in holding that there was pre-existing tenancy. He has submitted that the said conclusion and the impugned directions by the learned Tribunal are without jurisdiction.

4.1 Per contra, the learned counsel for the respondent no.1 has, while resisting the petition, submitted that the DRT is justified in examining the action taken by the secured creditor and that the respondent no.1 being tenant in the property in question cannot be thrown out by the petitioner-Bank by invoking provision under Section 13 and / or 14 of the Act since the tenancy rights of the respondent no.1 are protected by the Rent Act and that therefore, the tenant cannot be evicted except in accordance with law. The learned counsel for the respondent no.1 also submitted that the learned Tribunal having been satisfied on the count that there was pre-existing tenancy passed the order setting aside the impugned action of the Bank and also directed the Bank to restore the possession and that the orders impugned by the petitioner Bank are, in fact, wholly justified and do not warrant any interference. He also submitted that the petitioner-Bank cannot do what the owner himself could not have done and that the impugned orders do not lack jurisdiction or authority of law. So as to support his submission, learned counsel for the respondent no.1 relied on the judgment by the Apex Court in the case between Authorized Officer, Indian Overseas Bank Vs. Ashok Saw Mill (AIR 2009 SC 2420) and on the decision in the case of Sree Lakshmi Products Vs. State Bank of India decided by the Madras High Court (AIR 2007 Madras 148) as well as on the decision by the Kerala High Court in the case between V.P. Fakrudin Hazi Vs. State Bank of India (AIR 2009 Kerala 78) and the decision by Karnataka High Court in Baswa Raju Vs. Purnima S. R. (IV (2010) BC 366).

5. We deem it fit to make it clear, at the outset, that in present case, we have addressed a very limited and specific issue about the extent of Tribunal's jurisdiction under Section 17 of the Act viz. whether the DRT under Section 17, can receive and examine evidence regarding tenancy and to decide the dispute regarding landlord and tenant relationship (tenancy dispute) and whether the DRT can restore the possession to the borrower / occupant after the action under Section 13(4) is taken by the secured creditor. Any other issue has not been addressed or considered by us in present decision.

6. As noticed earlier, after the learned Trial Court rejected his application (Exh:5), the respondent no.1 filed, before the DRT, application under Section 17 of the Securitisation Act and challenged the action taken by petitioner-Bank under Section 13(4) of the Securitisation Act.

6.1 The DRT has, in the order dated 25.05.2010 recorded that:-

" it is the main contention that the applicant is a tenant in the said property. The tenancy is pre-existing to the alleged mortgage created in favour of the respondent no.1-Bank by the respondent no.2-Borrower. As such, it is claimed that the applicant should not be dispossessed without following due process of law and further seeing directions to open the seal..." (emphasis supplied) 6.2 The defence of the Bank is recorded thus, in the said order:-

"......However, it is contention that the tenancy does not exist prior to the creation of mortgage on 22.08.2000... It is the contention of the respondent no.1-Bank that there is no such evidence, on the basis of which, it can be held that the tenancy is pre-existing of the mortgage. It is also a contention that the Small Cause Court has given a finding to that effect." (emphasis supplied) 6.3 After dealing with the preliminary objection raised by the Bank on the ground of res-judicata, the DRT posed the issue for its consideration. The DRT observed that:-

"...T he only question remains whether his possession and tenancy is prior to creation of mortgage on 22.08.200........ Therefore, I am also of the opinion that inspite of the inspecting much more evidence let us examine the evidence which has already been produced."

(emphasis supplied) 6.4 The learned DRT, after evaluating the evidence received during the proceedings, recorded its conclusion as follows:-

"under such a situation, this Tribunal has no hesitation to rely on the documentary evidence placed on record by the applicant and to accept that his tenancy pre-exists to the creation of the mortgage..." (emphasis supplied) 6.5 Having thus recorded its conclusion, the learned DRT, while relying on the decision in the case of Dena Bank Vs. Sihor Nagrik Sahakari Bank (2008(2) GLH 218), directed the secured creditor to restore possession of the disputed property to the applicant.

6.6 The above noted observations and conclusions recorded by the learned DRT in the order dated 25.05.2010 demonstrate and establish that while considering and deciding the said Application No.56 of 2010 filed by present respondent no.1, the learned DRT entered into the mater of landlord-tenant relationship and addressed the issue related to tenancy dispute i.e. dispute between occupier and owner of the secured property.

6.7 It becomes clear from the observations and conclusions recorded by the learned DRT that for deciding the said issue, the learned DRT evaluated the evidence on record and came to its own independent conclusion which is evident from learned DRT's observation in para-13 of the order that while considering the application under Section 17 the learned DRT examined the factum of tenancy and evaluated and tested the conflicting evidence and determined the issue whether tenancy existed prior to mortgage.

7. Against the said decision and order of the learned DRT, the petitioner-Bank approached the Appellate Tribunal and the learned Appellate Tribunal vide order dated 31.08.2010 dismissed the appeal and confirmed the order passed by the DRT.

7.1 It is pertinent that the learned Appellate Tribunal also noticed that the learned DRT had examined the issue about tenancy and whether the tenancy was created prior to the mortgage i.e. tenancy was pre-existing or not. This is evident from the below mentioned observations by the learned Appellate Tribunal in para-5 of its order:-

"......the Respondent No.1 has filed Rent Receipt from 2000 to January 2010. He has also filed copies of Income Tax Returns and statements appended thereto in the year 1999-2000 where the Respondent No.1 has given his address of the premises in question. Then there are documents of the purchase of goods and their delivery at the address of the disputed property. The learned P.O., therefore, held that the Respondent No.1 is a tenant in the disputed premises before the creation of the mortgage on 22.08.2000......"(emphasis supplied) 7.2 The learned Appellate Tribunal having noticed that the learned DRT had entered into and decided the issue regarding factum of tenancy after receiving and evaluating the evidence placed on record, proceeded to examine the conclusions recorded by the learned DRT and confirmed the order passed by the learned DRT. The learned Appellate Tribunal, however, did not examine the extent of DRT's jurisdiction and the petitioner's objection about DRT's jurisdiction i.e. the jurisdiction to decide the dispute related to tenancy.

8. The issue before us, therefore, are (i) "while considering application under Section 17(1) read with Section 17(2) of the Act whether the DRT has jurisdiction to receive and evaluate evidence regarding tenancy and to decide the dispute and factum regarding landlord-tenant relationship (i.e. existence of tenancy) and (ii) whether under Section 17(3) of the Securitisation Act, the DRT has power to direct the secured creditor, after the action under Section 13(4) of the Act (of taking over the possession) is taken, to restore the possession to the borrower / occupier.

9. We shall, for sake of convenience take-up the second issue first.

9.1 So far as the second contention is concerned, it deserves to be noted that the said Act has been enacted with the object of speedy and effective recovery of the secured debt of banks and financial institutions and for that purpose vast and stringent authority is vested with the banks and the financial institutions. At the same time, so as to ensure that there are sufficient checks and balances, the legislature has conferred on the DRT, power and jurisdiction to examine as to whether the measures taken by the secured creditor for enforcement of security have been taken in accordance with the provision of the Act or not, which is evident from plain reading of sub-section (3) of Section 17. The said sub-section (3) reads thus:-

(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." (emphasis supplied) 9.2 It can be seen from the aforesaid provision that it empowers the DRT to examine as to whether the measures taken by the secured creditor were, or were not, in accordance with the provision of the Act and the legislature has also conferred, authority of law and jurisdiction on the DRT to declare the measure (taken by the secured creditor) as invalid and direct the secured creditor to restore the possession of the secured assets to the borrower if the measures taken under Section 13(4) by the secured creditor are found to be not in accordance with the provisions of the Act.

9.3 Having regard to the scope and effect of the provision under Section 17(3) it becomes clear that it cannot be said that the DRT has no jurisdiction to interfere with the action taken by the secured creditor after stage contemplated under Section 13(4). Actually the law is otherwise and it postulates that the action taken by the secured creditor in exercise of power under Section 13(4), is open to scrutiny and not only it can be set aside by the DRT but even status entirior to the action taken by the secured creditor, can be restored.

9.4 Under the circumstances, it would be misconceived and futile for the secured creditor to contend, while defending the measures taken by it for enforcing the security, that even if the tribunal finds that the measures taken by it are/were not in accordance with the provisions of the Act, it does not have jurisdiction to direct restoration of the possession of the secured assets to the borrower once the possession has been taken by it (i.e. secured creditor) in exercise of power under Section 13(4) of the Act. The said contention of the petitioner is misconceived. Hence, it must fail. We, accordingly, do not accept the said contention.

10. We may now turn to the first and the main contention.

10.1 So as to consider the said two issues on hand it is necessary and relevant to take into account the provision under Section 17(1) & (2) of the Act which reads thus:-

"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 authorized 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......] (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.

(emphasis supplied) 10.2 A glance at the above noted provision under Section 17 of the Act and the earlier noted sub-section (3), gives out that any person, including a borrower, who is aggrieved by any of the measures taken by the secured creditor or authorized officer under sub-section (4) of Section 13 is entitled to make an application under sub-section (1) of Section 17 of the Act to the DRT and when such application is made, the DRT is competent to (a) "consider whether the measures taken by the secured creditor under Section 13(4) for enforcement of security are in accordance with the provisions of the Act or not" and (b) if upon such examination the DRT comes to the conclusion that the measures taken by the secured creditor are not in accordance with the provisions of the Act, then it may direct restoration of the possession of secured assets whereas if the DRT declares that the recourse taken by the secured creditor is in accordance with the provisions of the Act, then the secured creditor may, notwithstanding anything contained in any other law for the time being in force, proceed further to take recourse to one or more measures specified under Section 13(4) of the Act to recover the secured debt.

11. Thus, the learned DRT is clothed with the jurisdiction "to consider whether the measures or recourse taken by the secured creditor under Section 13(4) of the Act was taken in accordance with the provisions of the Act, and if not then to direct the secured creditor to restore the position. That is the extent - scope and nature - of learned DRT's jurisdiction.

12. True it is that by virtue of the provisions under the Act, the secured creditor is vested with wide and stringent powers for recovery of its dues, however it is also provided that the measures taken by the secured creditor must be in accordance with the provisions of the Act and that therefore, the secured creditor cannot take any action except in accordance with the provisions of the Act.

13. Now, when the secured creditor takes any measures (for enforcement of security so as to recover the secured debt) which are not in accordance with the provisions of the Act, the borrower or aggrieved person can, as provided by the Act, make an application to the DRT claiming that the measures taken by the secured creditor were not or are not in accordance with the Act. The learned DRT would, upon such application by the borrower or an aggrieved person, (a) examine as to whether the measures taken by the secured creditor were/are taken in accordance with the provisions of the Act or not and (b) if the measures taken are found to be not in accordance with the provisions of the Act, then it may direct restoration of the possession (or management) of secured assets and pass such order as may be necessary in relation to the recourse taken (c) but if the measures are found to be in accordance with the provisions of the Act then the secured creditor may proceed further to take any measure specified under Section 13(4) to recover its dues. That, as noted earlier, is the extent of the jurisdiction of the DRT.

13.1 The use of words "as may consider appropriate and necessary", may, at first blush, appear to be of wide amplitude and as such, ordinarily, they would provide a wide and broad canvass of jurisdiction, but the scope is circumscribed by the subsequent words viz. "in relation to recourse taken under Section 13(4)"

in sub-section (3) and the said words put the "qualifying boundary" inasmuch as the said section also provides that the DRT may pass such order as may be considered necessary but such order must be "in relation to recourse taken under Section 13(4)".

13.2 The limits of DRT's jurisdiction under Section 17(2) of Act are circumscribed thus.

13.3 The fact that the DRT has limited jurisdiction is amplified from the language and scope of Section 17 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 ("RDB Act" for short) which read thus:-

"17(1)Jurisdiction, powers and authority of Tribunals. (1) A Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications form the banks and financial institutions for recovery of debts due to such banks and financial institutions."

13.4 The two provisions i.e. Section 17(2) read with Section 17(1) of the Act and Section 17(1) of the RDB Act in juxtaposition bring out the difference in the scope and jurisdiction conferred on the tribunal under the respect Acts.

13.5 In the former case i.e. the tribunal under the Act can mere consider "Whether any of the measure referred to in subsection 4 of Section 13 taken by the secured creditor are in accordance with the provision of this Acts and the Rules....". The limitation of the jurisdiction has been discussed hereinabove.

13.6 In the later case the tribunal under the RDB Act is conferred with the power and authority "to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions". Thus, the tribunal in the later case has power to entertain and decide the applications for recovery of debts which may allow, in appropriate and given case to examine other related or incidental issue whereas in the former case the tribunal can decide only the propriety of the measure taken by the secured creditor and to decide whether the same are taken in accordance with the provisions of the Act or not. The tribunal would not be competent to travel beyond the said boundary and decide any other issue, it being creature of the statute.

14. A question, therefore, would arise as to whether the DRT, while deciding the application under Section 17(1) in exercise of its jurisdiction under Section 17(2) & (3) can decide the contested or disputed issues regarding tenancy, [e.g. whether any landlord and tenant relation has come into existence and whether such relation exists between the borrower and the objector, and/or whether there was/is landlord-tenant relation between the borrower and the objector and/or whether the tenancy was existing prior to the date when the asset in question turned into secured asset etc.] 14.1 While it is true that wide power and jurisdiction is conferred on the DRT, it is also clear that ultimately the DRT is a creature constituted under the special statute and can exercise only so much of authority and jurisdiction as is conferred i.e. can exercise only specified and prescribed jurisdiction and cannot travel beyond its confines.

15. On the other hand, the provision under the Rent Act by virtue of Section 28 excludes the jurisdiction of Courts, other than the Court specified in sub-section (1) of Section 28 of the Rent Act (hereinafter referred to as the "Court under the Rent Act") to entertain any suit arising out of the Rent Act, The relevant provision reads thus:-

"28.

Jurisdiction of Courts (1) Notwithstanding anything contained in any law and notwithstanding that by reason of the amount of the claim or for any other reason, the suit or proceeding would not, but for this provision, be within its jurisdiction

(a) in the City of Ahmedabad, the Court of Small Causes of Ahmedabad.

(aa) in any area for which 3 Court of Small Causes is established under the provincial Small Causes Courts Act, 1887 (IX of 1887), such Court and

(b) elsewhere, the Court of the Civil Judge (Junior Division) having jurisdiction in the area in which the premises are situate or, if there is no such Civil Judge, the Court of Civil Judge (Senior Division) having ordinary jurisdiction.

Shall have jurisdiction to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of rent of possession of any premises to which any of the provisions of this Part apply and to decide any application made under this Act and to deal with any claim or question arising out of this Act or any of its provisions and [subject to the provisions of sub-section(2)] no other court shall have jurisdiction to entertain any such suit, proceeding or applications or to deal with such claim or question.

(2)

(a)......."

15.1 Thus, in view of Section 28 of the Rent Act only the Court under the Rent Act (i.e. the Court specified under Clause-(a), (aa) and (b), sub-section (1) of Section 28) will have jurisdiction to entertain and try any suit or proceedings between a "landlord" and a "tenant" relating to the recovery of rent or "possession" of any "premises" covered under part-II of the Rent Act. The Rent Act defines the terms "landlord", "premises" "Standard Rent" and "tenant". Consequently, any suit or proceedings which concern i.e. which are between a "landlord" and a "tenant" and pertain to the matter relating to "recovery of rent"

or "possession" of any "premises"

to which Part-II of the Rent Act applies can be tried only by the Court under the Rent Act.

15.2 Section 7 to 10 make provision regarding aspects related to Rent and Section 10A to 10E deal with aspects connected with increase in rates of rent while section 11 empower the Court under Rent Act to fix standard rent and permitted increase. Section 12 of the Rent Act puts restriction on eviction of tenant and Section 13 makes provision as to when the landlord may recover the possession of the premises. Sub-sections (2) and (3) of Section 13, inter-alia, provide when the Court would pass decree for eviction and Section 14 provide for sub-tenancy.

15.3 Thus, the whole field i.e. the matters concerning "landlord", "tenant" and "premises" and "possession" i.e. about the landlord-tenant relations, the claims and rights pertaining to the premises and the disputes arising therefrom, is occupied and governed by the provisions under the Rent Act and that therefore in view of the provision under Section 28 of the Rent Act, the proceedings between the landlord and tenant are to be decided by the Court under the Rent Act.

16. It is, therefore, necessary to examine the rival contentions and the applicability of the decisions relied on by the defendant in light of the aforesaid provisions i.e. Section 17(2) of the Securitisation Act and Section 28 of the Rent Act.

16.1 As noted above the fountain head of the jurisdiction of the DRT is Section 17(2) read with Section 17(1) of the Act and its power and jurisdiction flows from the said provisions. The said sections are "empowering provisions" in light of which the DRT can "examine as to whether measures taken by the secured creditor are in accordance with the provisions of the Act or not" i.e. extent of the jurisdiction of the DRT.

16.2 On the other hand the jurisdiction of the Court under the Rent Act flows from Section 28 of the Rent Act. According to the said Section 28 the Court under the Rent Act shall have jurisdiction to entertain any suit or proceedings relating to the recovery of rent or recovery of possession of any premises to which the Act applies or to decide application made under the Act and to deal with any claim or question arising out of the Rent Act, between the landlord and tenant.

16.3 The said Section 28 not only prescribes the jurisdiction of the Court under the Rent Act but also contains the exclusion clause or negative provision excluding the jurisdiction of other court by prescribing that "no other Court shall entertain such suit or application or proceedings or deal with such claim" which are to be decided by the Court under the Rent Act.

17. In present case one important aspect which is required to be kept in focus is that the DRT is creature of special Act and not a Court of original and inherent jurisdiction and that therefore it has to act within the confines of the limited jurisdiction conferred by the statute and it cannot exercise authority or jurisdiction which a Court of original and inherent jurisdiction can. It cannot like the Court of original and/or inherent jurisdiction, decide all matters or issues except those which are expressly or impliedly barred.

17.1 On the contrary the DRT can decide only those cases which come within the purview of its empowering section/provision i.e. 17(2) read with Section 17(1).

17.2 On examination of Section 17(2) of the Act and Section 28 of the Rent Act, we have noted hereinabove the matters and/or issues which each one of them can entertain and decide.

17.3 Now so far as the DRT is concerned, if, while entertaining and deciding any application filed under Section 17(2) r/w. Section 71(1) of the Act, and during the course of proceeding of such application, in face of the provision under Section 28 of the Rent Act, any issue about landlord and tenant relationship and/or about existence or otherwise of landlord-tenant relationship and/or about the possession or about the dispute between landlord and tenant (which can be decided after receiving and evaluating the evidence)arises, then, in our view, the jurisdiction of DRT would not extend to the extent of receiving and evaluating the evidence and deciding such (tenancy) dispute.

17.4 In view of the scope of jurisdiction specified by the provision under Section 17(2) read with Section 17(1) of the Act the jurisdiction of DRT would extend to, or shall be limited to, determining as to whether the measures taken by the secured creditor were/are "in accordance with the Act", or not, and the DRT cannot travel beyond that boundary. So far as the question about the jurisdiction of DRT to receive and evaluate evidence about tenancy dispute and to examine and decide such dispute is concerned, it emerges from the relevant provisions that on one hand its jurisdiction is inhibited by the restriction specified under Section 17(2) read with Section 17(1), and being creature of statute the DRT cannot travel beyond the confines prescribed by the Act; whereas, on the other hand in view of the exclusionary provision under Section 28 of the Rent Act, which excludes jurisdiction of the Courts other than the Court under Rent Act to decide disputes falling within its purview, the DRT would not be competent to step into the boundary of the Court under the Rent At and decide tenancy dispute.

18. We may, at this stage consider the decisions on which the respondent has relied. So far as the decision in case of Authorised Officer, Indian Overseas Bank and anr. vs. Ashok Saw Mill (AIR 2009 SC 2420) is concerned, the issue considered in the said case was whether the DRT would have jurisdiction to consider and adjudicate, with regard to "post Section 13(4) events" or whether, in terms of Section 17, its jurisdiction would be confined to stage contemplated under Section 13(4) was under consideration before the Apex Court. It was in that context that the Apex Court observed that:-

"23....

The consequences of the authority vested in DRT under Sub-Section (3) of Section 17 necessarily implies that the DRT is entitled to question the action taken by the secured creditor and the transactions entered into by virtue of Section 13(4) of the Act. The Legislature by including Sub-Section (3) in Section 17 has gone to the extent of vesting the DRT with authority to even set aside a transaction including sale and to restore possession of the borrower in appropriate cases. Resultantly, the submissions advanced by Mr. Gopalan and Mr. Altaf Ahmed that the DRT has no jurisdiction to deal with post 13(4) situation, cannot be accepted....."

Thus, in view of the facts of the present case and the issue which is on hand in present case, the said decision by the Apex Court would not help the petitioner.

18.1 The learned Counsel for present respondent has relied upon the decision by Sree Lakshmi Products rep. by its partners v. State Bank of India (AIR 2007 Madras 148). In facts of present case the decision would not assist the petitioner inasmuch as the provision similar to the provision under Section 28 of the Bombay Rent Act did not fall for consideration in the cited case. Thus the said decision also would not help present respondent.

18.2 The respondent's Counsel also relied on the decision in the case between Hutchison Essar South Ltd. v. Union Bank of India and Anr. (AIR 2008 Karnataka 14(1)) wherein the issue raised before the Court was whether the actual possession can be taken under Sections 13 and 14 of Securitisation Act and the Court observed that:-

"......If the secured asset is in the possession of the borrower, its possession can be taken in accordance with the provisions contained in Sections 13 and 14 of the Securitisation Act. If the borrower has inducted somebody overnight only to defeat the rights of the bankers, then also the provisions of Sections 13 and 14 of the Securitisation Act can be pressed into service for taking the possession.

23. However, if the secured asset is in the possession of a bona fide lessee or tenant, he cannot be thrown out by invoking Sections 13 and 14 of the Securitisation Act.....

In the said case also the issue was not about the jurisdiction of the DRT to receive and evaluate evidence, regarding landlord-tenant relationship and the issue was neither examined in light of nor in face of provision such a Section 28 of Rent Act which confers exclusive jurisdiction to decide the tenancy dispute on the Court under the Rent Act and also excludes other Courts.

18.3 So far as the decision in case of Dena Bank Vs. Sihor Nagrik Sahakari Bank (supra) is concerned, the said decision also does not assist the petitioner in overcoming the hurdle since the issue which is on hand in present case was not raised in the said case and the learned Single Judge was not required to address the said issue in the cited case.

18.4 Same is the position so far as the another decision in case between Pankajkumar Chandulal Antala vs. Central Bank of India through Branch Manager, Rajkot is concerned since in the said case also the issue was not raised before the learned Single Judge. Furthermore, in the cited case the learned Single Judge declined to entertain the petition since the petitioner had preferred the writ petition instead of approaching DRT against the action of the secured creditor. Hence, the said decision also would not help the petitioner.

18.5 So far as the decision by the Kerala High Court in the case between V.P. Fakrudheen Haji vs. State Bank of India and another [AIR 2009 KERALA 78] is concerned the question raised before the Division Bench was whether a relief can be granted under Section 17(3) of the Securitisation Act in favour of a person other than borrower. In the said decision the contention that the direction for restoration of possession can be made only in favour of borrower was not accepted. In the said case also the issue on hand in this case was not under consideration.

19. So as to appreciate the restriction on jurisdiction of DRT, particularly in light of Section 28 of Rent Act, we may also refer to Section 85 under the Bombay Tenancy and Agricultural Lands Act, 1948 ("Tenancy Act" for short) whereunder also the jurisdiction of Civil Court is barred as is under Section 28 of the Rent Act.

"85.

Bar of Jurisdiction.

(1)

No Civil Court shall have jurisdiction to settle, decide or deal with any question which is by or under this Act required to be settled, decided or dealt with by the Mamlatdar or Tribunal, a Manager, the Collector the Gujarat Revenue Tribunal or the State Government in appeal or revision or the State Government in exercise of their powers of control (2) No order of the Mamlatdar, the Tribunal, the Collector or the (Gujarat Revenue Tribunal) or the State Government made under this Act shall be questioned in any civil or criminal court."

19.1 With reference to the said provision the issue about civil court's jurisdiction to decide the issue as to whether the defendants were tenant was raised before Bombay High Court in case of Shivappa Satawappa Ashtekar v. Gajanan Chintaman Deshpande [1953 (55) Bom LR 843:AIR 1954 Bom 107] wherein the landlord had filed suit in civil court for possession of the lands where the defendants had setup the defence on the ground of protected tenancy. In the said case relying upon the earlier judgment by Division Bench in the case of Dhondi Tukaram v. Dadoo Piraji [1953] 55 Bom LR 663:(AIR 1954 Bom 100] the Court observed that:-

"Ex facie, by the operation of Section 70 and Section 85 of the Bombay Tenancy and Agricultural Lands Act, 1948, the jurisdiction of th civil court to decide whether the defendants were tenants or protected tenants mu st be regarded as excluded and the Mamlatdar alone must be regarded as competent to decide that question. That is the view which has been taken by a division bench of this Court in Dhodi Tukaram v. Dadoo Piraji..."

19.2 On this point two aspects deserve to be noted viz. (a) the said decision was rendered by the Court even before Section 85-A came to be incorporated in the Tenancy Act. Actually the observation and view expressed by the Court in case of Dhondi Tukaram (supra) paved the way for amendment in the Tenancy Act which introduced Section 85 in the Tenancy Act; and (b) the said observation and view of the Court is in respect of civil court's jurisdiction which, even otherwise is the Court of inherent and original jurisdiction unlike the tribunal which has limited jurisdiction as conferred by the Act.

19.3 In the case on hand we are concerned with the jurisdiction of DRT which, being creature of statute, has limited jurisdiction and does not enjoy inherent and original jurisdiction like civil court.

19.4 When, in light of Section 85 of Tenancy Act the aforesaid view is taken with reference to the jurisdiction of civil court, which enjoys original and inherent jurisdiction then it would apply with more vigour to tribunal with limited jurisdiction. The power or jurisdiction to decide all issues and matters of civil nature which is available and permissible to a civil court enjoying original and inherent jurisdiction to decide all matters of civil nature is not permissible to a tribunal having circumscribed and defined jurisdiction. Such limited jurisdiction would get more shrinked and confined in respect of a "subject" or "issue" reserved for or within exclusive jurisdiction of a Special Court / Tribunal e.g. Court constituted under rent Act or Industrial Disputes Act.

19.5 In this context the Apex Court, in 1979 examined observations by Bombay High Court regarding scope and jurisdiction of civil court to decide, as incidental issue, matter within Mamlatdar's jurisdiction in light of the provision contained under Sections 63, Section 70, Section 85 and Section 85-A of the Tenancy Act and noted that:-

"...The High Court was of the opinion that if an issue arises in a properly constituted civil suit which the Civil Court is competent to entertain, an incidental or subsidiary issues which may arise may be decided by the Court and jurisdiction of the Civil Court would not be ousted since the issue is not required to be decide under the Tenancy Act."

While considering such view of the High Court, the Apex Court observed in paragraph 10 of the judgment that:-

"10....This view overlooks and ignores the provision contained in Section 85-A. There can be a civil suit properly constituted which the Civil Court will have jurisdiction to entertain but therein an issue may arise upon a contest when contentions are raised by the party against whom the civil suit is filed......If any such issue arises which is required to be settled, decided or dealt with by the competent authority under the Tenancy Act, even if it arises in a civil suit, the jurisdiction of the Civil Court to settle, decide and deal with the same would be barred by the provision contained in Section 85...

"

The Apex Court, then further observed in paragraph No.15 as follows:-

"15.

.....The Legislature has clearly expressed itself that issues required under Act 67 of 1948, viz., Tenancy Act, to be decided by a revenue court, even if arising in a civil suit, must be decided by the revenue Court and not by the Civil Court. The view expressed by the Bombay High Court in Pandurang Hari v. Shanker Maruti, (1960) 62 Bom LR 873, and the Gujarat High Court in Kalicharn Bhajanlal Bhayya v. Raj Mahalaxmi, (1963) 4 Guj LR 145, that in such suit the Civil Court is competent to adjudicate upon the issues which are by Act 67 of 1948 required to be decided by the revenue Court, was disapproved. This Court held that the question whether the defendant being a tenant on the day on which the Tenancy Act was put into operation and whether he retained the protection in view of the proviso to S. 43-C was within the exclusive jurisdiction of the Mamlatdar under the Tenancy Act and, therefore, the District Judge was in error in dismissing the suit."

19.6 The relevance and importance of the issue on hand would bear the repeatation, hence even at the risk of repeatation, it is necessary to reiterate and again note that the said observations are made with reference to jurisdiction of Civil Court, thus it will apply with more force and rigour to a tribunal (DRT in this case) with limited jurisdiction and that too in face of Section 28 of Rent Act.

19.7 Thereafter, in 1993 in the case between Shri Inacio Martins, Deceased through LRs. v. Narayan Hari Naik and others (AIR 1993 SC 1756[1]), which involved the provision under Goa, Daman and Diu Agricultural Tenancy Act 1964 particularly Section 58(2) and section 7 thereof which excluded jurisdiction of Civil Court observed in paragraph No.9 as under:-

"9....If the defendant who is sued as a trespasser raises a plea of tenancy, a question arises whether his plea of tenancy can be decided by the Civil Court as incidental to the grant of relief for possession or is the Civil Court precluded from deciding the same in view of section 7 read section 58(2) of the Act. As pointed out earlier, section 7 in terms states that if any question arises whether any person is a tenant or should be deemed to be a tenant under the Act, the Mamlatdar shall decide such question. The jurisdiction is, therefore, vested in the Mamlatdar under section 7 of the Act and section 58(2) specifically bars the jurisdiction of all other courts to settle, decide or deal with any question which is by or under the Act required to be settled, decided or dealt with by the Mamlatdar. ...... Defendant No.1 raised a contention in his written statement that he was lawfully inducted as a tenant in the lands in question by the owner, defendant No.2. In other words, he disputed the plaintiff's contention that, he was a trespasser and pleaded tenancy. If his plea was found to be well-founded, he would be entitled to retain possession but not otherwise. Therefore, the question which arose in the suit was whether defendant No.1 proved that he was a tenant in respect of the land in question. This question could not be gone into by the Civil Court in view of the clear language of section 7 read with section 58(2) of the Act...." (emphasis supplied) As noted above earlier Section 28 confers exclusive jurisdiction, to decide the issues arising from and connected with tenancy dispute, on the Court under the Rent Act.

20. In that context reference may be made to the decision in the case between Dhagad Ambalal Bhailalbhai v. Bai Narmada (1963[4] GLR 90) wherein the Court observed that:

"the suit in which the plaintiffs claimed that they are entitled to remain in possession and seek to avoid eviction by praying for an injunction against the defendant is the suit which falls under Section 28 of the Act."

20.1 While on this point, reference may also be made to the decision in the case between Parvatishanker Mulshanker Vs. Prafulchandra Ravjibhai Patel (1979 (1) GLR 762) wherein the plaintiff-tenant had filed the suit against the defendant-landlord for declaration that he was tenant in respect of the suit property and he prayed for permanent injunction against the defendant from interfering with his possession and in that factual background, the Court observed thus:-

".....Sec.28 of the Rent Act confers jurisdiction upon the special Court not only to decide questions referred to in the section but also all matters which are incidental or ancillary to the determination of these questions. It has next been laid down in that decision that the words of sec.28 are wide enough to include every suit between a landlord and a tenant whether the tenancy is contractual or is continued by reason of the provisions of the Act provided the relief asked for relates to possession. Lastly it has been laid down in that decision that the words relating to used in sec.28 are very wide and include any suit or proceeding in connection with or having a direct bearing on the question of possession of the premises. Therefore even if the suit is not for possession if the relief claimed in the suit is in regard to or in respect of recovery of possession it will fall within the ambit of this section. In my opinion the principle laid down in this decision has applicability to the facts of the instant case. The plaintiff has alleged in the plaint the relationship of landlord and tenant between him and the defendant in respect of Khadki open chawk and the loft. He claims that he has been the tenant in respect of the said premises.

9..... Once he seeks a declaration in respect of his contractual tenancy which is protected by the Rent Act the claim directly arises out of the provisions of the Rent Act. Therefore it is an error to contend that what the plaintiff claims is merely a declaration of his contractual tenancy de hors or irrespective of the provisions of the Rent Act. In my opinion therefore the Court of Small Causes at Ahmedabad had the jurisdiction to entertain the present suit."

(emphasis supplied) 20.2 In another decision in the case between Nanubhai Pragji Vs. Chhaganlal Ranchodji and others (1993 (2) GLH 456) while deciding the case in light of fact that the plaintiff had claimed tenancy rights with respect to the suit property and had also claimed negative declaration to the effect that neither defendant no.1 nor defendant no.2 was tenant of the suit premises, the Court observed in Paragraph nos.9, 10 and 12:-

"....In fact, the negative declaration that neither respondent no.1 nor respondent no.2 herein is a tenant in respect of the suit premises is sought by the appellant in the suit on the basis that neither of the two respondents acquired any tenancy right on transfer of the appellant herein from Valsad to Malegaon in or around 1956. In other words, the declaration sought in plaint qua respondents nos.1 an 2 herein is to the effect that neither of them is the sub-tenant in respect of the suit premises. Looking to the definitions of the terms "landlords" and "tenant" contained in Section 5(3) and 5(11) respectively of the Act, the principal tenant would be the landlord qua his sub-tenant and the sub-tenant would be a tenant qua the principal tenant. In that view of the matter, there is no escape from the conclusion that the suit is also between the landlord and the tenant qua the appellant and respondents no.1 and 2 herein. It is, therefore, clear that the first condition for application of Section 28 of the Act is found satisfied.

10....The second condition is also found satisfied as the relief sought in the suit includes recovery of possession of the tented premises. It is immaterial whether possession is sought by the landlord from the tenant or by the tenant from the landlord. For the purposes of the second condition for applicability of Section 28 of the Act what is necessary is recovery of possession of the rented premises. I am, therefore, of the view that the second condition for applicability of Section 28 of the Act is also found fulfilled in the present case.

12. In view of my aforesaid discussion, I am of the view that the suit as framed would fall within the purview of Section 28 of the Act and it will be entertainable and triable only by the Forum named in it. The suit in the present case was admittedly and obviously tried by the ordinary Civil Court and not by what is popularly termed as the Rent Court specified in Section 28 of the Act. The trial of the suit by the Lower Court as an ordinary Civil Court would, therefore, be without jurisdiction." (emphasis supplied)

21. In present case the vital point to be kept in focus is that the secured creditor has stepped into the position of landowner and acquired the said status. We have to also recall that the occupant of the secured asset has, while opposing and contesting the claim for possession, set up defence that he is tenant and enjoys protected tenancy. From the above noted decisions it also becomes clear that the dispute in question is in nature and character of tenancy dispute. In view of the foregoing discussion we are of the view that the DRT does not have jurisdiction to deal with, decide and pronounce upon the issues related to the subjects within the exclusive jurisdiction and purview of the Court under Rent Act and/or to receive and evaluate evidence in the matters involving tenancy dispute and to entertain and decide tenancy dispute or the disputes concerning landlord - tenant relationship.

22. In present case, the DRT has received, examined and evaluated the evidence pertaining to tenancy dispute and has finally decided and also pronounced its conclusion regarding tenancy dispute and that therefore the impugned decision of the DRT to that extent is not sustainable. Since the impugned direction to the appellant bank is result of and is based on the conclusion in respect of tenancy dispute, the impugned direction also cannot be sustained.

23. Therefore, our reply to the first issue is in negative.

23.1 Hence, the petition is required to be allowed and the DRT's final conclusion and impugned direction deserves to be set aside.

Accordingly, the decision and order dated 25.5.2010 by the DRT and consequently the order dated 31.8.2010 by the Appellate Tribunal are hereby set aside, and to that extent the petition is allowed. It is however clarified that it would be open to the respondent to take out appropriate proceedings before the appropriate forum and seek necessary and appropriate relief with regard to its claim and dispute on the ground of tenancy and neither present order nor the order passed by the DRT or by the appellate tribunal and/or the conclusions recorded by the DRT and confirmed by the appellate tribunal, will stand in the way of the petitioner in such proceedings.

With the aforesaid observations and clarifications the petition is party allowed. Rule is made absolute to the aforesaid extent. The impugned decisions-orders of the learned DRT and the Appellate Tribunal as set-aside. There shall, however, be no order of cost.

(S.J. MUKHOPADHAYA,C.J.) (K.M.THAKER,J.) For the reasons recorded in the judgment, the oral prayer for stay of the judgment is rejected.

 


 


 


(S.J.
MUKHOPADHAYA,C.J.)
 


 


 

Suresh							(K.M.THAKER,J.)

    

 
	   
      
      
	    
		      
	   
      
	  	    
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