Gujarat High Court
Mahendrasinh Bharatsinh Chudavat & vs Cosmos Cooperative Bank Ltd on 6 February, 2017
Author: N.V.Anjaria
Bench: N.V.Anjaria
C/SCA/16431/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 16431 of 2015
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MAHENDRASINH BHARATSINH CHUDAVAT & 1....Petitioner(s)
Versus
COSMOS COOPERATIVE BANK LTD....Respondent(s)
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Appearance:
MR SHASHVATA U SHUKLA, ADVOCATE for the Petitioner(s) No. 1 - 2
MR GM JOSHI, ADVOCATE for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 06/02/2017
ORAL ORDER
Heard learned advocate Mr. Shashvata Shukla for the petitioners and learned advocate Mr. G. M. Joshi for the respondent Bank.
2. The challenge in this petition is essentially directed against the measures taken by the respondent Bank under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. In this regard, it is prayed to set aside notice dated 18.09.2015 issued by the respondent Bank and further to set aside the action of the respondent Bank in taking symbolic possession of the secured assets. The petitioners seek a declaration that the respondent Bank does not have any authority to dispossess the petitioners who are the lawful tenants of the premises in question. Another prayer is made to restrain the respondent Bank from taking coercive measures in respect of the properties.
3. Referring to the facts in brief, it is stated by the Page 1 of 5 HC-NIC Page 1 of 5 Created On Wed Feb 08 02:31:35 IST 2017 C/SCA/16431/2015 ORDER first petitioner that he took on 08.09.2010 the property described as Flat No.302, Chinmay Tower, Near Subhash Chowk, Memnagar, Ahmedabad on lease from its owner one Dilipbhai Chandulal Patel and that he was regularly paying the rent. It appears that the petitioner filed the proceedings under the Arbitration Act seeking to restrain its landlord from dispossessing the petitioner from the property. It is further stated that the second petitioner took on 02.04.2007 the property described as Survey No.438/2, behind Madhusudan Ceramics, besides Sudarshan Oil Mill, Kundal, Kadi, District Mehsana on rent from its owner one M/s. Neel Oil Industries by way of tenancy agreement of the aforesaid date.
3.1 It appears that the respondent-Cosmos Cooperative Bank Limited issued notice dated 18.09.2015 to abovenamed M/s. Neel Oil Industries through its partners of which one of the partners and addressee of the notice was said Dilipbhai Chandulal Patel. It was a notice under Section 13(4) of the SARFAESI Act calling upon the borrower/guarantor to pay the dues of the Bank for which the property was mortgaged-a secured asset. The said notice contained the description of the property as "All that immovable property bearing Flat No.A/302 admeasuring about 145 Sq. Yds. Situated on Third Floor of Block-A of "Chinmay Tower" Scheme of Parasnath Memnagar Co-operative Housing Society Limited Standing/Constructed on land bearing F.P. No.126 of T.P. Scheme No.1 (allotted in Lien of R.S. No.31) of Mouje : Memnagar, Taluka : City within the Registration Sub-District: Ahmedabad-3 (Memnagar) and District: Ahmedabad."
Page 2 of 5HC-NIC Page 2 of 5 Created On Wed Feb 08 02:31:35 IST 2017 C/SCA/16431/2015 ORDER 3.2 The ground which the petitioners herein have raised to seek the prayers and to assail the proceedings under the SARFAESI Act initiated by the respondent Bank against the said borrowers has been that the petitioners herein are the tenants in the properties by virtue of lease/tenancy documents executed. Learned advocate for the petitioners relied on the decision in Harshad Govardhan Sondagar vs. International Assets Reconstruction Company Limited. [(2014) 6 SCC 1].
4. The above contention is not required to be examined in view that the Legislature has amended Section 17 of the Act as per the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016.
5. Amongst other amendments, sub section (4A) was inserted in Section 17 which reads as under, (4A) Where-(i) any person, in an application under sub-section (1), claims any tenancy or leasehold rights upon the secured asset, the Debts Recovery Tribunal, after examining the facts of the case and evidence produced by the parties in relation to such claims shall, for the purpose of enforcement of security interest, have the jurisdiction to examine whether lease or tenancy.-
(a) has expired or stood determined; or
(b) is contrary to section 65A of the Transfer of Property Act, 1882; or
(c) is contrary to terms of mortgage; or
(d) is created after the issuance of notice of default and demand by the Bank under sub-section (2) of section 13 of the Act; and
(ii) the Debts Recovery Tribunal is satisfied that tenancy right or leasehold rights claimed in secured asset falls under sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) of clause (i), then notwithstanding anything to the contrary contained in Page 3 of 5 HC-NIC Page 3 of 5 Created On Wed Feb 08 02:31:35 IST 2017 C/SCA/16431/2015 ORDER any other law for the time being in force, the Debts Recovery Tribunal may pass such order as it deems fit in accordance with the provisions of this Act."
5.1 In view of above, it is clear that all the questions including claim of tenancy rights can be examined by the Tribunal in an appeal under Section 17 of the Act allowing the parties to lead the evidence. The Tribunal, after examining the facts of the case including claim of tenancy right or leasehold rights and considering the evidence produced by the parties in relation to such claim, would be passing an order as it may deem fit.
5.2 The aforesaid provisions of the Act as inserted undoubtedly gives a locus standi to a party to claim tenancy right or leasehold rights in relation to the secured assets before the Tribunal by preferring appeal under Section 17 of the Act. In other words, there is an alternative remedy under Section 17 of the Act of an appeal before the Tribunal and to get the issues of tenancy right and leasehold rights determined by the Tribunal by adducing evidence.
6. It is well settled that when the remedy under Section 17 of the Act is available to approach by way of appeal before the Debt Recovery Tribunal, the petitioners have to avail the same. The petitioners are entitled to raise all the issues including the claim of tenancy while pursuing such alternative forum. The stage at which the case is placed, is an appropriate stage where the remedy before the Tribunal could be properly pursued. It is held by the Supreme Court that order under section 14 of the Act also constitutes post-13(4) stage to avail alternative remedy and challenge the order passed under Page 4 of 5 HC-NIC Page 4 of 5 Created On Wed Feb 08 02:31:35 IST 2017 C/SCA/16431/2015 ORDER section 14 of the Act. In United Bank of India vs. Satyawati Tondon and Others [(2010) 8 SCC 110], the Supreme Court cautioned about the High Court readily entertaining writ petitions even though an efficacious remedy of appeal under section 17 is available to the aggrieved party.
6.1 Learned advocate for the petitioners fairly stated that he would approach the Tribunal by preferring appeal and raise all the contentions which are sought to be raised in this petition. The petitioners are permitted accordingly, and therefore relegated to the remedy of appeal under Section 17 of the Act before the Debts Recovery Tribunal.
6.2 While dealing with the aspect of condonation of delay, if any, the aspect of filing of the present petition and pendency thereof till date, shall be given due regard by the Tribunal.
6.3 This Court has not gone into the merits of the case of the petitioners. The Tribunal shall consider the case of the parties and decide the same on merits.
7. The petition stands disposed of in the aforesaid terms.
(N.V.ANJARIA, J.) chandrashekhar Page 5 of 5 HC-NIC Page 5 of 5 Created On Wed Feb 08 02:31:35 IST 2017