Summary
The Court dismissed a claimed tenant’s challenge to bank possession proceedings. Photocopied rent receipts issued after the mortgage, the borrowers’ silence about any tenancy and the valuer’s findings cast serious doubt on the claim. No registered instrument supported possession for the pleaded multi-year term, and no secured-creditor consent supported renewal after the statutory demand notice. The Court considered the merits because the appeals had remained pending since 2016, while recognising the tenant’s remedy before the Debts Recovery Tribunal.
Issues
- Whether the appellant proved a tenancy protecting possession against the secured creditor.
- Whether an oral tenancy and an asserted post-notice renewal could defeat bank possession proceedings.
Provisions considered
- Sections 65A and 107, Transfer of Property Act, 1882A tenancy created after mortgage but before the statutory notice must meet Section 65A; a claimed term exceeding one year requires a registered instrument. (¶¶ 11, 12, 14)
- Sections 13(2), 13(13) and 35, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002The appellant’s asserted renewal lacked the secured creditor’s consent after the demand notice; rent-law protection did not assist the tenant in sufferance on these facts. (¶¶ 13, 14)
- Section 17(1), Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002A tenant claiming under the borrower could approach the Debts Recovery Tribunal; the Court nevertheless decided these long-pending appeals on merits. (¶ 10)
Held
- A valid tenancy predating mortgage cannot simply be displaced through SARFAESI possession proceedings. A post-mortgage, pre-notice tenancy must satisfy Section 65A, and a claim to a term exceeding one year requires a registered instrument. (¶¶ 11, 12)
- The appellant failed to provide good or sufficient evidence of the alleged earlier tenancy. The first photocopied receipt postdated the mortgage; the borrowers had not disclosed a tenant and third-party valuers found them occupying the property. (¶¶ 9, 14)
- The pleaded multi-year tenancy had no registered instrument. The appellant, treated as a tenant in sufferance, could not claim rent-law protection; the asserted renewal also failed because the borrower had obtained no secured-creditor consent after the statutory demand notice. (¶¶ 13, 14)
- Although a Tribunal remedy was available even before the 2016 amendment, the Court examined the merits because the appeals had been pending since 2016. Both appeals were dismissed. (¶¶ 10, 15)
Result
Appeals dismissed; rejection of the application to restrain the bank from taking possession upheld.