Gujarat High Court
Smt. Jayshreeben Amitkumar Chauhan vs Jashwantlal Bhulabhai Parmar & 2 on 15 February, 2017
Author: N.V.Anjaria
Bench: N.V.Anjaria
C/SCA/7676/2016 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 7676 of 2016
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SMT. JAYSHREEBEN AMITKUMAR CHAUHAN....Petitioner(s)
Versus
JASHWANTLAL BHULABHAI PARMAR & 2....Respondent(s)
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Appearance:
JAIMIN A GANDHI, ADVOCATE for the Petitioner(s) No. 1
MR BHAVIK J PANDYA, ADVOCATE for the Petitioner(s) No. 1
MR HIRAN M SHROFF, ADVOCATE for the Respondent(s) No. 2
NOTICE SERVED BY DS for the Respondent(s) No. 3
PUNITA H JOSHI, ADVOCATE for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 15/02/2017
ORAL ORDER
Heard learned advocate Mr. Jaimin Gandhi for the petitioner and learned advocate Mr. Hiren Shroff for the respondent No.2. None appeared for the first and third respondents though served with the notice.
2. What is prayed by the petitioner herein is to hold that no action could be taken against him without hearing him under section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, nor any order under section 14 of the said act could be passed without hearing him. The second limb of the prayer is to direct the civil court concerned to Page 1 of 6 HC-NIC Page 1 of 6 Created On Sun Aug 13 16:25:01 IST 2017 C/SCA/7676/2016 ORDER expedite the hearing and adjudicate the injunction application in Regular Civil Suit No. 3/2015.
3. The petitioner asserts that he is a tenant of the property in question being 11, Natwarnagar Society, Naswadi, Chhoteudaipur, which was rented to him by the first respondent herein in June, 2013. The first respondent happens to be the original borrower who took financial assistance from the bank. It further appears that the petitioner has instituted a Regular Civil Suit No.3 of 15 for relief of permanent injunction against the respondent to restrain them from obtaining possession of the said property on the ground that the petitioner has a valid tenancy rights therein. It appears that the bank has proceeded against the original borrower under the SARFAESION Act. 2002, to recover the unpaid dues. In this regard, an advertisement dated 13.02.2016 is published in the newspaper. As the said proceedings by the bank are afoot, the petitioner feels aggrieved and has filed the present petition.
4. The respondent No.2 bank has filed affidavit-in- reply contentious the petition, stating that notice dated 08.02.2016 was issued by the bank under section 13(4) of the SARFAESI Act,2002.
5. The essence of the grievance and the case of the petitioner is that he has rights as a tenant in the property which is a secured asset in respect of the loan transaction between the second respondent bank Page 2 of 6 HC-NIC Page 2 of 6 Created On Sun Aug 13 16:25:01 IST 2017 C/SCA/7676/2016 ORDER and the first respondent borrower, and in connection therewith the bank has taken steps to seek possession of the property in process of recovery of the dues under the SARFAESI Act. The petitioner therefore apprehends that he will loose possession. He has sought declaration that action under the SARFAESI Act would not be competent against him, unless he is heard and his tenancy rights are duly considered.
5.1 In the facts of the case, there is no gainsaying that the petitioner falls within the category of 'aggrieved person' within the meaning of section 17 of the SARFAESI Act. Section 17 provides for an appeal before the Debt Recovery Tribunal which is a remedy available in respect of the measures taken under the SARFAESI Act and any aggrieved may have such remedy. Even the contention of the petitioner about he having the tenancy rights, can be examined by the Tribunal in the appeal as available as above.
5.2 It is further relevant to take note 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.
5.3 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 Page 3 of 6 HC-NIC Page 3 of 6 Created On Sun Aug 13 16:25:01 IST 2017 C/SCA/7676/2016 ORDER 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 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.
6 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.
6.1 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 Page 4 of 6 HC-NIC Page 4 of 6 Created On Sun Aug 13 16:25:01 IST 2017 C/SCA/7676/2016 ORDER the issues of tenancy right and leasehold rights determined by the Tribunal by adducing evidence.
6.2 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 petitioner has to avail the same. The petitioner is 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 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.
7. The petitioner is therefore relegated to the remedy of appeal under Section 17 of the Act before the Debts Recovery Tribunal. He may raise all the contentions before the Tribunal, which are sought to be raised in this petition.
8. While dealing with the aspect of condonation of delay, if any, the factum and aspect of filing of the present petition and pendency thereof till date, Page 5 of 6 HC-NIC Page 5 of 6 Created On Sun Aug 13 16:25:01 IST 2017 C/SCA/7676/2016 ORDER shall be given due regard by the Tribunal.
8.1 It is clarified that this court has not gone into the merits of the case of the petitioner. In the event, the petitioner avails remedy of appeal before the Tribunal, the Tribunal shall consider the case of the parties and decide the same on merits.
9. Accordingly, this petition is not liable to be entertained on the aforesaid ground that the alternative statutory efficacious remedy of appeal is available. Therefore, leaving the said remedy open to be resorted to by the petitioner, the petition is not accepted.
The petition stands disposed of in the aforesaid terms.
(N.V.ANJARIA, J.) cmjoshi Page 6 of 6 HC-NIC Page 6 of 6 Created On Sun Aug 13 16:25:01 IST 2017