Hemraj Ratnakar Salian vs. Hdfc Bank Ltd. and Ors. - (Supreme Court) (17 Aug 2021)

If the tenancy claim is for any term exceeding one year, the tenancy can be made only by a registered instrument

MANU/SC/0538/2021

Banking

Present appeals are directed against the Orders passed by the Chief Metropolitan Magistrate, rejecting the Application filed by the Appellant herein for restraining HDFC Bank, the first Respondent herein, from taking possession of the property in the Appellant’s possession. HDFC Bank had granted financial facility to Respondent nos.2 and 3 (‘the Borrowers’) of Rs. 5,50,00,000. On 3rd April, 2013, the Borrowers had mortgaged a property (“the Secured Asset”) in favour of the Bank with an intention to secure the said credit facility.

The accounts of the Borrowers were declared as non¬ performing assets (NPA). The Bank issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”) to the Borrowers. It is the case of the Appellant that, he is a tenant of the Secured Asset on a monthly rent of Rs. 20,000 since 12th June, 2012 with an increase of 5% every year. He has been paying rent regularly to his landlord since inception of his tenancy.

The Appellant filed application before the Magistrate seeking protection of his possession of the Secured Asset as the Magistrate was ceased with the petition under Section 14 of SARFAESI Act filed by the Respondent no.1 -Bank. Vide Order, the intervention application of the Appellant was dismissed by the Magistrate holding that, there was no registered tenancy placed on record by the appellant.

In Harshad Govardhan Sondagar v. International Asset Reconstruction Co. Ltd. & Ors., this Court has categorically held that, if the tenancy claim is for any term exceeding one year, the tenancy can be made only by a registered instrument. In the present case, there is a serious doubt as to the bona fide of the tenant, as there is no good or sufficient evidence to establish the tenancy of the Appellant. According to the Appellant, he is a tenant of the Secured Asset from 12th June, 2012. However, the documents produced in support of his claim are xerox copies of the rent receipts and the first xerox copy of the rent receipt is of 12th May, 2013 which is after the date of creation of the mortgage. It is pertinent to note here that the Borrowers have not claimed that any tenant is staying at the Secured Asset. At the time of grant of facility, third¬ party valuers had also confirmed that the Borrowers were staying at the Secured Asset.

The Appellant has pleaded tenancy from 12th June, 2012 to 17th December, 2018. This is not supported by any registered instrument. Further, even according to the Appellant, he is a “tenant¬in¬sufferance”, therefore, he is not entitled to any protection of the Rent Act. Even if the tenancy has been claimed to be renewed in terms of Section 13(13) of the SARFAESI Act, the Borrower would be required to seek consent of the secured creditor for transfer of the Secured Asset by way of sale, lease or otherwise, after issuance of the notice under Section 13(2) of the SARFAESI Act and, admittedly, no such consent has been sought by the Borrower in the present case. There is no merit in present appeals. Appeals dismissed.

Tags : REGISTERED INSTRUMENT REQUIREMENT TENANCY CLAIM