Gujarat High Court
Hitemp Polymers Pvt. Ltd. vs Gujarat Industrial Development Corpn. on 7 May, 2018
Author: Rajesh H.Shukla
Bench: Rajesh H.Shukla
C/SCA/3790/2015 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 3790 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE RAJESH H.SHUKLA
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1 Whether Reporters of Local Papers may be allowed to
see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law
as to the interpretation of the Constitution of India or any
order made thereunder ?
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HITEMP POLYMERS PVT. LTD.
Versus
GUJARAT INDUSTRIAL DEVELOPMENT CORPN.
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Appearance:
MR. SHAKTISINH JADEJA for MR P P MAJMUDAR(5284) for the
PETITIONER(s) No. 1,2
MR SP MAJMUDAR(3456) for the PETITIONER(s) No. 1,2
MS. ASMITA PATEL, AGP for the RESPONDENT(s) No. 2,3
MR CHINMAY M GANDHI(3979) for the RESPONDENT(s) No. 1
MR DEVANG VYAS(2794) for the RESPONDENT(s) No. 4
MR MB GANDHI(326) for the RESPONDENT(s) No. 1
MR SHASHIKANT S GADE(1706) for the RESPONDENT(s) No. 5
MS E.SHAILAJA(2671) for the RESPONDENT(s) No. 7
NOTICE SERVED BY DS(5) for the RESPONDENT(s) No. 6
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CORAM: HONOURABLE MR.JUSTICE RAJESH H.SHUKLA
Date : 7/05/2018
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C/SCA/3790/2015 JUDGMENT
ORAL JUDGMENT
1. The present petition is filed by the petitioner under Articles 14, 19(1)(g) and 21 of the Constitution of India as well as under
Article 226 of the Constitution of India and also under the provisions of the Gujarat Industrial Corporation Act for the prayer as prayed for inter alia that appropriate writ, order or direction may be issued quashing and setting aside the decision / communication by Respondent No.1 - Gujarat Industrial Development Corporation dated 30.7.2014 at Annexure-F and also letter dated 4.4.2013 at Annexure-G and also further direction directing Respondent No.2 - Sub-Registrar of Assurances, Taluka Halol, District Panchmahal to release the original registered sale deed of the petitioner and to register the petitioner as the owner of the premises in the record of Respondent No.1 - Gujarat Industrial Development Corporation and Respondent No.2 - Sub-Registrar of Assurances, Taluka Halol, District Panchmahal by transferring the industrial plot and shade on the grounds stated in the memo of petition.
2. The facts of the case briefly summarized are as follows:
[2.1] The petitioner is the purchaser of the premises in GIDC Halol in an auction conducted pursuant to the public notice for auction sale of the property bearing Plot No. 2002 at GIDC Estate, Halol together with construction and fixtures.
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C/SCA/3790/2015 JUDGMENT [2.2] The auction sale was conducted as the original holder of the said premises i.e. M/s Ezy Slide Fasteners Private Limited had defaulted in repaying certain loans to the Bank of Baroda. Thus, the auction sale was conducted to realize the dues of the Bank. [2.3] A registered lease deed was executed between the erstwhile holder of the plot of GIDC on 16.1.1986 and thereafter the erstwhile holder was converted into a private limited Company. The petitioner had participated in the public auction of sale and had submitted the highest bid which was accepted by the India SME Asset Reconstruction Company ("ISARC" for short). [2.4] It is the case of the petitioners that vide letter dated 17.9.2013, the ISARC informed the petitioner that the competent authority has confirmed the sale of the aforementioned property in their favour as per the terms and conditions of the sale notice published on 2.9.2013 on "As is where is basis". Therefore the petitioner was required to deposit the bid amount as per the terms of sale. The said letter is produced at Annexure-D. Thereafter on fulfillment of the procedural formalities, the sale certificate dated 2.4.2014 was issued by ISARC in favour of the petitioner produced at Annexure-E and thereafter the petitioner as a bonafide purchaser for a value became entitled for registering the name in various official records as the holder of the premises.
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C/SCA/3790/2015 JUDGMENT [2.5] It is the case of the petitioners that though they were lawful purchaser of the premises at the auction, they cannot be compelled to clear the obligations of the erstwhile holder. The Respondent No.1 had however insisted for complying with the requirements of clearing the dues of the erstwhile holder as well as other authorities like Employees Provident Fund and also to procure No Objection Certificate from the Directorate of Enforcement, Revenue Department, Ahmedabad and also the No Objection Certificate from the Commercial Tax Commissioner as stated in detail in letter Annexure-R1 dated 30.7.2014.
[2.6] The Respondent No.1 is said to have addressed a letter dated 4.4.2013 to Respondent No.2 directing him not to register the deed of conveyance or a deed of assignment or the other deeds without their consent as stated in the said communication at Annexure-G. [2.7] It is therefore the case of the petitioner that the petitioner is not liable as auction purchaser of the property for the outstanding dues of the defaulter or the erstwhile holder and still the name of the petitioner is not registered in the record of Respondent No.1 and also the entry is not made by Respondent No.2 which would create difficulty for the petitioner in making use of the premises. Therefore, though the huge amount has been spent in purchasing the premises at the auction, the petitioner is not able to utilize for Page 4 of 24 C/SCA/3790/2015 JUDGMENT such reasons and the objections which caused prejudice to the rights of the petitioner which has lead to the present petition.
3. Affidavit-in-reply has been filed by Respondent No.1. It is contended that that though the petitioner may have purchased the property which was put to auction by the creditor Bank, the Respondent Nos. 1 and 2 could not register the name as the owner of the said property since the Corporation has received various communications from the government authorities such as Employees' State Insurance Corporation, Enforcement Directorate and Commercial Tax Commissioner etc. It is contended that such dues would fall within the definition of "dues attached to the land"
and therefore the petitioner is liable to clear them. It is also stated that the petitioner has not joined such authorities as party- respondent and therefore the plot in question cannot be transferred in the name of the petitioner without clearing the dues of the government authorities. It has been specifically contended that after the purchase of the plot the petitioner tendered a request dated 2.7.2014 for transfer of the plot in its favour which was scrutinized by the Respondent Corporation and it was conveyed vide letter dated 30.7.2014 produced at Annexure-R1. It has been stated in the said letter about the liabilities on the plot. Thereafter vide letter dated 4.4.2013 a general instruction was conveyed to the Sub- Page 5 of 24
C/SCA/3790/2015 JUDGMENT Registrar, Halol that when the lessee approaches for execution of deed of assignment, prior permission of lessor may be taken. It is contended that a policy laid down by the Respondent Corporation shall prevail upon in such matters and the procedure for transfer of the leased property shall be subject to such procedure and policy, and therefore, without observing the necessary legal formalities or discharge of obligation, it may not be registered, and therefore, the petitioner cannot claim to transfer as a matter of right. It is specifically contended that the Respondent Corporation has never granted permission under Clause 2(r) of the lease deed in respect of the leased property bearing Block No.2002 at Halol Industrial Estate to ISARC. It is contended that permission under Clause 2(r) of the lease deed in respect of the premises is granted permitting the Bank of Baroda to create a charge in its favour and registration of any agreement without the permission of the Respondent Corporation is null and void. It has also been contended that since the name of the Bank of Baroda as financial institution is mentioned and not that of ISARC, the original lessee ought to have brought to the notice of the Respondent Corporation that any such agreement is executed by which such ISARC is permitted to recover the Bank of Baroda's dues recoverable from the original borrower or the loanee M/s Ezy Slide Fasteners Private Limited. Page 6 of 24
C/SCA/3790/2015 JUDGMENT It is therefore contended that the Respondent Corporation has not granted permission under Clause 2(r) of the lease deed in respect of the aforesaid leased property and therefore any internal arrangement by the Bank of Baroda and ISARC may not have any validity, and therefore the public auction at the instance of ISARC is not in accordance with the lease deed particularly Clause 2(r) of the lease deed dated 9.6.1994. It is therefore contended that unless the Respondent Corporation recognize the purchaser, he cannot be a lawful holder of the premises and the Respondent Corporation has conveyed vide letter dated 30.7.2014 to the petitioner to comply with the requirement. Therefore, it is contended that in the absence of No Dues Certificate or the No Objection Certificate from the ESI Corporation and other government body the Respondent Corporation may not transfer in the name of the petitioner. Reference is also made to Section 93(A) of Employees' State Insurance Act, 1948. It is contended that the leased property could not have been put to auction sale without the prior permission of the lessor I.e. Respondent No.1 as per the lease deed and therefore no right can be claimed as a bona fide purchaser.
4. Affidavit-in-Rejoinder is filed by the petitioner reiterating similar contentions. It is contended that as long as the petitioner is ready to clear all the dues of the GIDC, GIDC cannot raise any objection Page 7 of 24 C/SCA/3790/2015 JUDGMENT in registering the name of the petitioner. It is contended that ISARC is only an assignee of the Bank of Baroda and such assignment is recognized as permissible by the Hon'ble Apex Court. Therefore, it is contended that Respondent No.1 GIDC cannot insist for No Dues Certificate of the other authorities for which the reliance is placed on the judgment of the High Court in Special Civil Application No. 8948 of 2008 produced at Annexure-I. It is contended that Section 93(A) of the Employees' State Insurance Act is not applicable as the transferred property is sold in an public auction and therefore as the petitioner has complied with the requirements as a bonafide purchaser in an auction sale, the present petition may be allowed.
5. Heard learned Advocate Shri Shaktisinh Jadeja for learned Advocate Shri S.P.Majmudar for the petitioner, learned Advocate Shri M.B.Gandhi for Respondent No.1 - Gujarat Industrial Development Corporation, learned Advocate Ms. E. Shailaja for Respondent No.7, learned Advocate Shri Shashikant S. Gade for Respondent No.5, learned Advocate Shri Kshitij Amin for Respondent No.4 and learned AGP Ms. Asmita Patel for the Respondent - State.
6. Learned Advocate Shri Shaktisinh Jadeja for learned Advocate Shri S.P.Majmudar for the petitioner has referred to the Page 8 of 24 C/SCA/3790/2015 JUDGMENT background of the facts and also referred to the order passed and also the sale certificate produced on record. Learned Advocate Shri Jadeja submitted that as it is evident from Annexure-E, the sale certificate has been confirmed by the officer of the ISARC which is the assignee of the debt of the bank. He therefore submitted that when the auction is held in exercise of powers for recovery of the outstanding dues and the petitioner as a highest bidder at the auction has purchased the same, there is no justification for not transferring or registering the name of the petitioner in place of the erstwhile holder of the plot. He submitted that any such instance for payment of the dues or the liability of the erstwhile holder of the plot including that the liabilities like the liability towards the PF and ESI are erroneous.
7. Learned Advocate Shri Jadeja has referred to the judgment of the High Court reported in 1997 (1) GLR 624 in case of P.B.Textiles Pvt. Ltd. v. Gujarat Industrial Development Corporation and submitted that it is a transfer by operation of law as a result of the auction. Therefore, learned Advocate Shri Jadeja submitted that the transfer by operation of law is justified than transfer inter vivos agreement. He therefore submitted that in view of the sale certificate granted, necessary direction may be issued to transfer the plot in question in the name of the petitioner. He also referred Page 9 of 24 C/SCA/3790/2015 JUDGMENT to the letter of Respondent No.1 - GIDC at Annexure-F and submitted that there is no justification to insist for compliance of such conditions of getting No Objection Certificatge from PF Authority and ESI Corporation. He also referred to the judgment of the Hon'ble Apex Court as well as the judgment of the High Court of Gujarat reported in AIR 2013 (Guj) 50 in case of Canara Bank through authorized Signatory v. Palco Recycle Industries Ltd. through its Directo. He has also referred to the judgment of the Hon'ble Division Bench of the High Court in SCA 8948/2008 as well as the the judgment of the High Court (Coram: R.Subhash Reddy, CJ and Anant S. Dave,J) in Letters Patent Appeal No. 9 of 2016 dated 19.2.2016. Learned Advocate Shri Jadeja stated that the reliance placed on the judgment of the Hon'ble Court reported in (2014) 15 SCC 263 in case of Mcleod Russel India Limited v. Regional Provident Fund Commissioner, Jalpaiguri & Ors. may not be justified, as, there the transfer was a voluntary transfer and not by operation of law or auction sale.
8. Learned Advocate Shri M.B.Gandhi for Respondent No. 1 - GIDC referred to the papers and submitted that as stated, the Corporation is the lessor and, without the permission of the Corporation, the premises cannot be transferred. He submitted that the clause in the lease agreement clearly provide for permission of the Corporation, Page 10 of 24 C/SCA/3790/2015 JUDGMENT and therefore, any exercise undertaken by the Bank or ISARC for recovery of dues of the Bank cannot affect the right of the Corporation emerging from the lease agreement. He referred to page 49 at Annexure-F and submitted that by this communication dated 30.7.2014 the Respondent Corporation has specifically asked for compliance with the necessary requirements including No Objection Certificate from the government authority like the PF Authority as well as Directorate of Enforcement, Revenue Committee. Similarly, it was stated that No Dues Certificate should be obtained from the ESI Corporation. Learned Advocate Shri M.B.Gandhi submitted that these letters specifically contend about the dues of the ESI Corporation that the dues of the ESI Corporation to the tune of Rs.89,86,018/- was outstanding and, after making the payment, No Dues Certificate has to be produced for the purpose of such transfer. Therefore, learned Advocate Shri Gandhi submitted that the change in the name is not merely by understanding or some arrangement between the borrower and the creditor like the Bank. However he submitted that the communication dated 27.1.2014 received from the Employees' Provident Fund Organization produced with the affidavit-in-reply at Annexure-R5 clearly suggest about the fact that the employer and the transferee to whom such establishment is transferred shall Page 11 of 24 C/SCA/3790/2015 JUDGMENT be jointly and severally liable to pay the contribution. Learned Advocate Shri Gandhi has stated that this liability under the provisions of Section 17(B) of EPF and Miscellaneous Provisions Act 1952 would be attracted and therefore as it has also been conveyed to the Respondent No.1 Corporation, the Respondent Corporation has asked for compliance with the same. Similarly legal notice given by the petitioner has only stated about the bona fide purchaser in the auction. He submitted that the transaction of sale or purchase for the purpose of recovery by Bank is one thing and, the operation of other laws is another thing and therefore the GIDC as a lessor is entitled to protect its interest and, in fact any leasehold rights are with the lessee like the petitioner and, it cannot be sold by auction inasmuch as there cannot be any conferment of the title of the land in question. Learned Advocate Shri Gandhi therefore submitted that the entire exercise of sale is misconceived. Learned Advocate Shri Gandhi has also referred to the communication dated 2.8.2013 by the Petitioner Company to the PF Commissioner and by this letter, it is suggested, by sale of unit, the Company proposed to make the payment of EPFO and the same has also been replied by the office of the PF Commissioner. He therefore submitted that the present petition may not be entertained.
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9. Learned Advocate Ms. E.Shailaja for Respondent No. 7 - Employees Provident Fund Organization has referred to the background and submitted that the provisions of Section 17(B) of the P.F. Act is required to be considered. She submitted that transfer or sale would not absolve the employer from liability. She also submitted that even the judgment of the Hon'ble Division Bench in LPA 9/2016 has also on the contrary observed with regard to the fact that such liability towards the payment of PF would not be affected. She pointedly referred to the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act. She therefore submitted that the liability of the establishment will remain and it cannot be transferred without the fulfillment of the statutory obligation for the payment. She therefore submitted that if it is insisted for payment of the outstanding dues before such transfer should take place, it cannot be said to be illegal.
10.Similarly, learned Advocate Shri Shashikant S. Gade appearing for Respondent No.5 - Employees State Insurance Corporation submitted that the provisions of Section 93(A) of the ESI Act may be considered. He pointedly referred to the Section and submitted that it implies that by voluntary transfer by the employer it may have to be an application. However, the submission that if it is by auction sale, it will not attract the liability, is misconceived. He Page 13 of 24 C/SCA/3790/2015 JUDGMENT submitted that even if the transfer is by auction sale in exercise of powers under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act ("SARFAESI Act" for short) it cannot escape the statutory liability. Learned Advocate Shri Gade submitted that the Petitioner Company is filing the petition one after other to escape the liability and to avoid the liability. Earlier one Ganesh Trading Company had filed the petition being Special Civil Application No. 3230 of 2014 for the same property and it was not entertained. He therefore submitted that the present petition may not be entertained.
11.In rejoinder, learned Advocate Shri Shaktisinh Jadeja for learned Advocate Shri S.P.Majmudar for the Petitioner referred to the judgment of the Hon'ble Division Bench of the High Court (Coram: Bhaskar Bhattacharya, C.J and J.B.Pardiweala,J) reported in AIR 2013 (Guj) 50 in case of Canara Bank through Authorized Signatory v. Palco Recycle Industris Ltd. through its Directo. He submitted that the observations clearly suggest that the provisions of the EPF Act or the ESI Act would be applicable to the case of transfer made voluntarily by mutual agreement for sale or transfer of such premises or undertaking. However, it will not have any application when such transfer is for the auction sale in exercise of powers under the SARFAESI Act. Learned Page 14 of 24 C/SCA/3790/2015 JUDGMENT Advocate Shri Jadeja submitted that if there is any outstanding liability like ESI, PF Authority, the same may be pursued by the authority for recovery in accordance with law but transfer of the premises in the name of the purchaser like petitioner cannot be declined.
12.In view of these rival submissions, it is required to be considered whether the present petition deserve consideration.
13.As could be seen from the background of the facts, the petitioner claims to be a bonafide purchaser in an auction sale at the instance of the creditor like Bank who is said to have exercised the power under the SARFAESI Act. The ISARC is said to have been assigned such powers of the Bank and therefore on behalf of the Bank, said ISARC has sold the premises in question by auction sale. However, the moot question is whether the Bank or the assignee like ISARC can sell the property or the premises which is a plot in the GIDC given on lease to the debtor. It is well accepted that under the Transfer of Property Act, the leasehold right are the limited right under the lease subject to the covenant of lease deed and it does not convey or transfer the title over the land. In other words, the right, title, interest in the land will remain with the GIDC and what has been given is a limited right created by way of lease in favour of lessee subject to the covenant in the lease deed. Page 15 of 24
C/SCA/3790/2015 JUDGMENT Thus, it is a mutual agreement between the GIDC and the lessee who takes on lease such land or premises. Clause 2 stipulates that such lessee will not transfer the possession or any right without the prior permission of the lessor I.e. GIDC. Thus when the lessee does not have any title over the land or the premises, the sale by auction at the instance of the Bank or the assignee of the Bank I.e. ISARC could not have ventured to sell such a plot or premises without the prior permission of the Corporation. The recovery of the outstanding dues of the financial institution like Bank by sale of the assets mortgaged by taking the possession in exercise of power under the SARFAESI Act is one thing but it cannot extend to a sell of premises or the land in possession of the borrower as a lessee. The lessee may have a limited right and in any case the right of the lessor including the title over the land is not affected by any such borrowing by the lessee inasmuch as the lessor is not a party or a privy to any such agreement for the purpose of loan or advances and the document created or executed between the borrower like lessee and the bank or the financial institution. Once it is accepted that the Bank could not have proceeded to sell such premises by auction sell, naturally the assignee also would not get any right for auction sale of such premises which has been in possession of the borrower as a lessee. Again the Corporation has made it clear Page 16 of 24 C/SCA/3790/2015 JUDGMENT obliging to fulfill the necessary requirement by letter dated 30.7.2014 at Annexure-F. The covenant in the lease agreement also refers to the rent which itself suggest that the title to the land would remain with the lessor. Further, stipulations providing for the right of the lessor to re-enter or make alteration as per the building regulation would further state that the lessee or the borrower like the petitioner has no absolute title. Therefore, it could not have been taken for auction sale without the permission of lessor. Therefore, the leasehold right could be transferred subject to covenant in the lease agreement as well as other requirements like the payment of outstanding dues of the other authorities. Therefore, the letter at Annexure-F clearly indicated for compliance with the requirement. Moreover, even before the sale certificate has been granted by the authorized officer of the ISARC produced at Annexure-E dated 2.4.2014, the GIDC has already conveyed to the petitioner as well as to the Sub-Registrar that without the prior approval of the Corporation, the leasehold right may not be transferred and any such leasehold right cannot be transferred without the prior approval of the lessor I.e. GIDC. Therefore, the submissions made by learned Advocate Shri Shaktisinh Jadeja relying upon the judgment of the Hon'ble Division bench of the High Court in case of Canara Bank Page 17 of 24 C/SCA/3790/2015 JUDGMENT through Authorized Signatory v. Palco Recycle Industries Ltd. Through its Directo (supra) will not have the applicability inasmuch as even if the SARFAESI Act read with the Security Interest (Enforcement) Rules 2002 are considered and accepted as giving power to the Bank or the financial institution to recover the outstanding dues by sell of the secured asset, it will not justify the auction sale of the premises in question which are held by the debtor by way of lease. Therefore, it will have to be considered with regard to the provisions of Transfer of Property Act and the right of the Bank or the financial institution to sell such property in exercise of power under the SARFAESI Act. As stated above, the Bank or the financial institution can exercise the powers under the SARFAESI Act and also the Security Interest Rules to realize the outstanding dues by way of such asset which is secured.
14.In the facts of the case, having a background of the limited leasehold rights, the moot question would be whether the Bank or the financial institution can resort to a auction sale under the SARFAESI Act for sale of such land or the premises for which the title remain with the Corporation like GIDC. The borrower will have limited leasehold right and therefore when the borrower has a limited leasehold right, can the Bank or the financial institution in purported exercise of power under the SARFAESI Act can have Page 18 of 24 C/SCA/3790/2015 JUDGMENT the auction sale of such premises with a leasehold rights subject to the covenant in the lease deed. Therefore, without the prior approval of the lessor neither lessee like borrower can transfer or create any encumbrance nor the Banks or the financial institution who advanced the loan to such borrower I.e. lessee can claim any right to recover without the approval of the lessor. Therefore, the auction itself is said to be without authority or jurisdiction in respect of such leasehold rights enjoyed by the borrower I.e. the erstwhile allottee of the premises. The person like petitioner who is said to have purchased in the auction sale cannot claim any right, title, interest. Even if it is assumed that such auction sale could be held, even then, he would step in the shoes of earlier lessee having the leasehold rights. Therefore, if he claims to step in the shoes of the earlier lessee, he would be bound by the lease deed again providing for compliance with the conditions, and therefore, it cannot be said that it would not bind him for the other statutory obligations. Again Section 108 of the Transfer of Property Act referring to the 'rights and liabilities of the lessor and lessee' also provide that if the lessee is aware of any proceedings to recover the property or any part thereof, or of any encroachment made upon, or any interference with, the lessors' right concerning such property, he is bound to give, notice thereof to the lessor. Therefore, it Page 19 of 24 C/SCA/3790/2015 JUDGMENT requires a close scrutiny of interplay of statutory provisions of the Transfer of Property Act as well as the SARFAESI Act and the interpretation of the covenant like lease deed.
15.From reading the entire material and the statutory provisions, it makes it clear that exercise of powers under the SARFAESI Act by the Banks or the financial institutions to recover the money by sale of secured assets is one thing but it cannot be a matter of right in such cases where the premises or the property in question is with only leasehold rights in favour of the borrower. Therefore, it could not have been sold by auction without the prior permission of the lessor like GIDC. Again, a useful reference can be made to the judgment of the Hon'ble Division Bench in LPA 9/2016 dated 19.2.2016, where, considering the statutory provision and the obligation under the different statutes like the ESI Act and the PF Act read with the provisions of SARFAESI Act, the Hon'ble Division Bench has made the observation that the right of the authorities like ESI Corporation to recover the unpaid contribution is independent and Section 93(A) of the ESI Act is one of the remedies and the obligation to pay such contribution and right to recover the unpaid contribution are the statutory right which can be exercised qua the premises or the establishment of the erstwhile employer.
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16.The reliance placed on the judgment of the Hon'ble Apex Court in case of Mcleod Russel India Limited v. Regional Provident Fund Commissioner, Jalpaiguri & Ors. (supra) would also not help learned Advocate for the petitioner inasmuch as the facts were different and the liability under the EPF Act referring to Section 17(B) has been considered.
17. It is well accepted that a judgment has to be considered in background of the facts and, the text of the judgment has to be considered in context of the facts and the statutory provisions. A useful reference can be made to the judgment of the Hon'ble Apex Court in case of Ajitsinh Arjunsinh Gohil v. Bar Council of Gujarat and Anr. reported in (2017) 5 SCC 465 wherein it has been observed:
"As far as interpretation of statutory provisions is concerned, textual interpretation to match context and further explore intention of legislature. The words have to understood regard being had to the purpose behind it and hence concern with the intention is basically to decipher the meaning of the word that the legislature has placed on it."
18.Though it has been stated referring to the liability of the transferee up to a particular stage or the proviso to Section 17(B) providing for reconstruction or the limits of the liability of the transferee up to the date of transfer will have a reference to transfer of the Page 21 of 24 C/SCA/3790/2015 JUDGMENT establishment or the undertaking by mutual agreement between the employer and other persons who takes over as a unit or the establishment or the running business. The issue in the present case is not with regard to the apportionment of the liability in case of such transfer or the undertaking or the unit by mutual understanding or the agreement. In the facts of the case, the issue which is required to be addressed is whether there could be any auction sale in exercise of power under the SARFAESI Act of a so- called secured asset which is only a limited leasehold right with the borrower. Therefore, whether it could have been put to auction without the prior permission of the lessor like Corporation having the title over the land or the premises in question and only a limited right or the leasehold rights are given to the lessee I.e. borrower subject to the covenant of the lease agreement. Therefore, when the sale could not have taken place without the permission of Respondent No.1-GIDC, the claim made by the petitioner as a bona fide purchaser in an auction sale must fail and the prayer regarding entry or the transfer in the name of the petitioner in the record of Corporation or the revenue cannot be entertained. If at all the petitioner has any grievance, it may have a recourse against the Bank or the ISARC for suitable relief including the refund of the amount.
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19.Before parting, it is required to be stated that even making a note of the underlying purpose of the SARFAESI Act for speedy recovery of the land or the outstanding dues, it cannot have any right for a sale of the property or the premises dehors the other provisions including the Transfer of Property Act, GIDC Act, ESI Act etc. Though the SARFAESI Act provides that notwithstanding anything contained, it may have a overriding effect. It is not necessary that it may have an overriding effect qua every other statutory provisions. In fact a useful reference can be made to the judgment of the Hon'ble Apex Court in case of Harshad Govardhan Sondagar v. International Assets Reconstruction Company Limited & Ors. reported in (2014) 6 SCC 1 and also in a judgment in case of Dena Bank v. Shri Sihor Nagrik Sahakari Bank Limited & Ors. reported in 2008 (2) GLH 218 as well as the judgment of the Hon'ble Apex Court in case of Vishal N. Kalsaria v. Bank of India and Ors. reported in (2016) 3 SCC 762, where the Hon'ble Apex Court referring to the situation of a sitting tenant has considered the applicability of the Rent Act viz-a- viz SARFAESI Act and has observed that it cannot have an overriding effect.
Therefore, having regard to the aforesaid discussions, the present Page 23 of 24 C/SCA/3790/2015 JUDGMENT petition cannot be entertained and deserve to be dismissed and accordingly stands dismissed. Rule is discharged. Interim relief, if any, shall stand vacated.
(RAJESH H.SHUKLA, J) J.N.W Page 24 of 24