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12. It was argued by the Respondent No. 8 before this Court that since the tenancy in question is a tenancy, where no period has been fixed, the tenancy in question is deemed to be on month-to-month basis and as such, registration is not necessary. However, this argument bears no weight given the present circumstances. As the law stands, if a tenant claims possession of a secured asset beyond the prescribed period under Section 107 of the TPA 1872, he is required to produce a registered instrument executed in his favour.

(Emphasis Added)

16. What flows from the aforesaid discussion is that in absence of a registered instrument executed in its favour, a tenant, cannot be permitted to claim possession of a secured asset for a term beyond one year from the date on which the lease is claimed to have come into effect. If a tenant intends to safeguard his possession of the secured asset, presence of a registered lease deed executed in his favour is the sine qua non for the same. Having concluded that, it is further held that an oral agreement accompanied by delivery of possession, or an unregistered lease deed cannot be relied upon by a tenant to claim possession of a secured asset beyond the period prescribed under Section 107 of the TPA 1872. We also hold that the tenant, who claims tenancy month by month, would not get any advantage as per the judgment of the Supreme Court in Agme Marketing Pvt. Ltd. (Supra) as it clearly holds that a month to month tenancy comes to an end at the end of the month and commences at the beginning of every month. If that is the case, then as per Section 13 (13) of the SARFAESI Act, a new tenancy would not commence after the notice under Section 13 (2) of the SARFAESI Act was issued to the borrower-landlord and, therefore, whenever in any case a plea is taken that the tenant was a tenant on a month to month basis then he would not get any advantage of that assertion as the commencement of tenancy on the first of every month would be a definite breach of the provisions of Section 13 (13) of the SARFAESI Act.

17. It has been conclusively established by this Court under Issue No. 1 that only through a registered instrument, a tenant can claim possession of a secured asset beyond the prescribed period under Section 107 of the TPA 1872. Therefore, the question which now emerges is - what is the remedy available to a tenant, in case, during the validity of his tenancy, proceedings are initiated under Section 14 of the SARFAESI Act?

18. Rules 8 (1) and 8(2) of the Security Interest (Enforcement) Rules, 2002 require that in case the secured asset is an immovable property, the officer, authorized by the DM/CMM, as the case maybe, before taking possession, shall deliver a possession notice on the outer door or at a conspicuous place of the property. The said possession notice shall also be published, in two leading newspapers, including, one newspaper in the local language. The Hon'ble Supreme Court in Harshad Govardhan Sondagar (supra), held that after a lessee becomes aware, of such a possession notice, he can either resist the attempt of the secured creditor to take possession of the secured asset, or surrender the possession. The lessee, in case, he resists possession, is required to produce proof before the authorized officer, that his tenancy was created prior to creation of the mortgage or under the mortgagor, he was a lessee in accordance with Section 65-A of the TPA 1872. The authorized officer is then required to file an application before the CMM/DM, under Section 14 of the SARFAESI Act. The affidavit accompanying the application must state the name and address of the person claiming to be the lessee. On receipt of such an application, the CMM/DM must give notice and an opportunity of hearing to the person who is claiming to be the lessee. Thereafter, if existence of a valid lease is established to the satisfaction of the CMM/DM, he shall not pass an order delivering the possession of secured asset to the secured creditor. If in case, no valid lease exists, the CMM/DM, will pass an order delivering to the secured creditor, the possession of the secured asset. Relevant paragraphs from Harshad Govardhan Sondagar (supra) have been extracted below:

b) A tenancy where no period has been fixed, or a tenancy which is deemed to be a month-to-month tenancy, cannot entitle a tenant to seek possession of a secured asset beyond a period of one year when proceedings have been initiated under Section 14 of the SARFAESI Act.

c) If a tenant intends to claim the possession of a secured asset when proceedings have been initiated under Section 14 of the SARFAESI Act it must necessarily be done by way of a registered instrument executed in his favour.