Karnataka High Court
Shri Syed Altaff Ahmed vs The Authorised Officer on 25 March, 2022
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 25TH DAY OF MARCH, 2022
BEFORE
THE HON'BLE MR. JUSTICE P. KRISHNA BHAT
WRIT PETITION NO.13518 OF 2015 (GM-RES)
BETWEEN:
SHRI SYED ALTAFF AHMED
S/O. LATE SYED AHMED,
AGED ABOUT 59 YEARS,
RESIDING AT NO.5/1 (48),
VENKATAPPA ROAD,
SHIVAJINAGAR,
BENGALURU-560 051.
... PETITIONER
(BY SRI SANDESH SAMUEL, ADV., FOR SRI DEEPAK)
AND:
1. THE AUTHORISED OFFICER
CENTRAL BANK OF INDIA,
REGIONAL OFFICE, 1ST FLOOR,
ABOVE ARYA BHAVAN SWEETS,
SANTOSH CINEMA COMPLEX,
K.G. ROAD,
BENGALURU-560 009.
2. MR. IQBAL HUSSAIN
S/O. S.A. GAFFAR,
AGED MAJOR,
RESIDING AT NO.25/5,
4TH CROSS, LIC COLONY,
3RD BLOCK, JAYANAGAR EXTENSION,
BENGALURU-560 011.
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3. MR. SHOAIB AHMED
S/O. JUNAID AHMED,
AGED ABOUT 49 YEARS,
NO.409, BAZAAR STREET,
NEELASANDRA,
BENGALURU-560 038.
... RESPONDENTS
(BY SRI M. MOHAMMED IBRAHIM, ADV., FOR
SRI EASHWAR PRASAD B., FOR R-1)
***
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE
ORDER DATED 26-2-2015 IN IR NO.2773 OF 2014 PASSED BY THE
DEBTS RECOVERY TRIBUNAL, BENGALURU, AND TO QUASH THE
ORDER DATED 1-7-2014 IN C.MISC NO.50002 OF 2014 ON THE
FILE OF XI ADDITIONAL CHIEF METROPOLITAN MAGISTRATE,
BENGALURU.
THIS WRIT PETITION IS COMING ON FOR ORDERS, THIS
DAY, THE COURT MADE THE FOLLOWING:
ORDER
The petitioner claims that he is a tenant in possession of property bearing No.5/1, New No.48, situate at Venkatappa Road, Shivajinagar, Bengaluru - 560 001, comprising of ground and first floor with passage 8 feet x 32 feet. He further states that under a lease agreement dated 31-5-2004 (Annexure-A), respondent No.2 leased the said premises to him for a period of twenty years (Clause-3 of Annexure-A).
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2. In this petition, the petitioner is seeking the following reliefs:
"a. Issue a writ in the nature of Certiorari or any other writ quashing the Judgment dated 26.02.2015 passed in IR No.2773 of 2014 by the Debts Recovery Tribunal, at Bangalore, after calling for all the records on its file, furnished as Annexure-E to this petition.
b. Issue a writ in the nature of Certiorari or any other writ quashing the order dated 01.07.2014 passed in C.Misc.50002/2014 on the file of XI Addl. Chief Metropolitan Magistrate, Bengaluru, furnished as Annexure-C to this petition."
3. Learned counsel for the petitioner advances two fold contentions;
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firstly, he submitted that respondent No.2 who is the owner of the premises had leased the property to the petitioner by lease agreement dated 31-5-2004 (Annexure-A) and pursuant to the same, he was put in possession and lease was for a period of twenty years. He submits that provisions of Sections 13 and 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'the SARFAESI Act'), is not applicable to a tenant like him and therefore, in a proceedings initiated under the SARFAESI Act, he cannot be evicted from the premises and the order dated 26-2-2015 (Annexure-E) passed by the Presiding Officer of the Debts Recovery Tribunal is required to be quashed. In support of his contention, he has placed reliance on decision of this Court in HUTCHISON ESSAR SOUTH LIMITED v. UNION BANK OF INDIA reported in ILR 2007 KAR 4362;
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Secondly, he submitted that the Debts Recovery Tribunal has dismissed the application in IR No.2773 of 2014 by placing reliance on the decision of the Hon'ble Supreme Court in HARSHAD GOVARDHAN SONDAGAR v. INTERNATIONAL ASSETS RECONSTRUCTION CO. LTD. AND OTHERS reported in (2014) 6 SCC 1. He submits that the petitioner is a lessee of subject property even prior to the mortgage in favour of respondent No.1-Bank and since his lease has not been validly terminated, respondent No.1-Bank could not have dispossessed him. He submits that on account of the above illegality, the impugned order (Annexure-E) is liable to be quashed.
4. Per contra, learned counsel for respondent No.1- Cebtral Bank of India submits that the lease deed is a created document. He submits that the petitioner, who claims to be the lessee is none other than the original owner of the property and he had sold the same to respondent No.2. Learned counsel further states that 6 respondent No.3 had borrowed money from the Bank and as a security to the same, the petitioner had mortgaged the schedule property in favour of the Bank. He submits that in order to delay and defeat the legal claim of the Bank, the petitioner has entered into a device of lease agreement which is an antedated document. He further contended that lease agreement being for a period of twenty years, it is a compulsorily registrable document and therefore, it cannot be looked into by the Debts Recovery Tribunal in view of the decision of the Hon'ble Supreme Court in BAJARANG SHYAMSUNDER AGARWAL v. CENTRAL BANK OF INDIA AND ANOTHER reported in (2019) 9 SCC 94. His further contention is that, the petitioner is not entitled to approach this Court under Article 226 of the Constitution of India and alternative, remedy is available under Section 18 of the SARFAESI Act. If his petition is dismissed by the Debts Recovery Tribunal, he can prefer an appeal before the Debts Recovery Appellate Tribunal, but the petitioner has 7 not availed that remedy, but instead he has approached this Court by filing this petition. In support of his contention, he has placed reliance on a decision of this Court in Writ Petition No.12461 of 2020 (GM-RES) disposed of on 13-11-2020.
5. Careful perusal of the documents clearly shows that the petitioner himself was the previous owner of the schedule property which was mortgaged to Central Bank of India by a mortgage deed dated 28-9-2004 by respondent No.2. Respondent No.2 had purchased the schedule property from the petitioner by sale deed dated 29-5-2004. Clause-3 of the sale deed clearly shows that at the time of execution of sale deed dated 29-5-2004, possession of the schedule property was handed over by the petitioner to respondent No.2. It is the contention of learned counsel for respondent No.1 that the lease agreement (Annexure-A) is nothing but an antedated document dated 31-5-2004, i.e. two days immediately 8 after the sale deed dated 29-5-2004 as a device to defeat the interest of the Bank, in favour of which, the mortgage deed was executed by respondent No.2 himself. As rightly pointed by the learned counsel for respondent No.1, even though lease agreement (Annexure-A) recites the duration of the lease is twenty years, but it is an unregistered document. Learned counsel for respondent No.1 has pointed out another glaring factor in support of his contention that it is a created document as the seal and signature of stamp appearing on the second page of lease agreement as dated "17 May 2004". In so far as date is concerned, 17 May is in printed format and 2004 is in hand-written. It is not necessary to go in detail into that aspect. What is important is the observation of the Hon'ble Supreme Court in BAJARANG SHYAMSUNDER AGARWAL (stated supra) at paragraph No.24.3, which reads as follows:
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"24.3 In any case, if any of the tenants claim that he is entitled to possession of a secured asset for a term of more than a year, it has to be supported by the execution of a registered instrument. In the absence of a registered instrument, if the tenant relies on an unregistered instrument or an oral agreement accompanied by delivery of possession, the tenant is not entitled to possession of the secured asset for more than the period prescribed under Section 107 of the T.P. Act."
In terms of the above law laid down by the Hon'ble Supreme Court, since the lease agreement (Annexure-A) is an unregistered document, the petitioner who claims to be tenant cannot be said to be entitled for possession of the secured asset for more than the period prescribed under Section 107 of the Transfer of Property Act, 1882, which is three years. Notice to the tenant to vacate (Annexure-D) was issued on 6-8-2014 by financial institution. It is well beyond the period of three years stipulated under Section 107 of the Transfer of Property Act, 1882. In that view of 10 the matter, the petitioner is not entitled to benefit of lease agreement dated 31-5-2004.
6. There is no dispute about the fact that a tenant of a secured creditor aggrieved in any manner by the steps taken under the SARFAESI Act can prefer an appeal before the Debts Recovery Tribunal under Section 17(4A) of the SARFAESI Act. If he is aggrieved by the order passed by the Debts Recovery Tribunal, he can prefer an appeal before the Debts Recovery Appellate Tribunal under Section 18 of the SARFAESI Act. The petitioner has not taken recourse to the same. This Court had an occasion to consider the scope and power to entertain the petition against the steps taken by the Authorised Officer under the SARFAESI Act and to explain the correct position in law in Writ Petition No.12461 of 2020 (GM-RES) (SRI U.M. RAMESH RAO AND OTHERS v. UNION BANK OF INDIA) disposed of on 13-11-2020, which reads as follows:
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"12. In the case of Satyawati Tandon, it is held that when a particular Legislation contains a detailed mechanism for redressal of grievance, High Court should not interfere under Article 226 of the Constitution of India.
13. In the case of K.C. Mathew, reaffirming the principle in Sathyawati Tandon, the Apex Court has held that it is the solemn duty of the Court to apply the correct law without waiting for an objection to be raised by a party when the law stands well settled. In financial matters, grant of ex parte interim orders can have deleterious effect. Loans from Financial Institution are granted by public money generated at tax payers' expense. Such loan does not become the property of the person taking the loan but retains its character of public money given in the fiduciary capacity.
14. In the case of ICICI Bank Ltd., referring to K.C. Mathew's case, the Apex 12 Court has deprecated the practice by High Courts to continue to entertain matters which arise under SARFAESI Act. The Apex Court has noted the observations made in paragraph No.32 of Dwarikesh Sugar Industries Ltd., Vs. Prem Heavy Engineering Works Pvt. Ltd. wherein it is held that when a position in law is well settled as a result of judicial pronouncement, it would amount to judicial impropriety to ignore the settled decisions and to pass judicial orders which are contrary to the settled legal position.
15. In the case of SSJV projects, it is held that when a contention has been raised and if it is pending in appeal, the question of urging the same plea under Articles 226 and 227 of the Constitution of India cannot be permitted.
16. On facts, one of the borrowers, Shri. S. Dinakar Rao, has stated in his letter produced by the Bank that his brother Ramesh Rao, who is the first 13 petitioner in this petition has been deliberately withholding repayments of loan and refusing to pay to the Bank. Petitioners have already approached the DRT by filing S.A. No.542/2019. It is the specific case of respondent Bank that petitioners have urged the very same grounds urged in this writ petition, before the DRT.
17. It is also the specific case of the Bank that petitioners have been using the Estates for the purpose of Home stay, guest house etc. This contention was sought to be refuted by the learned Senior Advocate by producing Google maps. It was urged that a very small portion of the Estates measuring about 348 acres was being used for the purpose of Home stay and it cannot alter the nature of the land which is primarily agricultural land. However, no finding can be recorded based on the assertions and photographs in proceedings under Article 226 of the 14 Constitution of India. Undoubtedly, it is a matter of fact.
18. Admittedly, Bank has initiated proceedings under the SARFAESI Act. Petitioners' remedy lies in an appeal under Section 17 of the SARFAESI Act. In view of this settled position, this petition must fail and it is accordingly dismissed."
7. In that view of the matter, this writ petition cannot be entertained and the petitioner cannot be granted any relief in a petition under Article 226 of the Constitution of the India. Accordingly, the petition is dismissed.
In view of dismissal of the main petition, I.A. No.1 of 2017 does not survive for consideration and accordingly, it is also dismissed.
Sd/-
JUDGE kvk