Uday Sankar Roy Choudhury vs Authorized Officer
2022 Latest Caselaw 5524 Cal

AD-11
Ct No.09
17.08.2022
TN
                           WPA No. 18376 of 2022

                       Uday Sankar Roy Choudhury
                                     Vs.
                   Authorized Officer, Bajaj Housing Finance
                              Limited and others


             Mr. Anindya Bose,
             Mr. Shubradip Roy
                                                  .... for the petitioner

             Mr. Kaushik Chatterjee,
             Mr. Tirthankar Dey
                                                 .... for the respondent

nos. 1 and 2

Mr. Rabindra Narayan Dutta, Mr. Suprabhat Bhattacharya .... for the State

Affidavit-of-service filed in court today be kept

on record.

Heard learned counsel for the parties.

The scope of challenge of the writ petition is that

an order has been passed under Section 14 of the

Securitisation and Reconstruction of Financial Assets

and Enforcement of Security Interest Act, 2002

(hereinafter referred to as "the SARFAESI Act") by the

District Magistrate, South 24 Parganas, for possession

in respect of a premises, on two floors of which the

petitioner is allegedly a tenant.

It is submitted by learned counsel for the

petitioner that in the impugned order, the Magistrate

categorically observed that the property is not under

lease and tenancy as per affidavit, deeds, records or

all other relevant documents as submitted by the

Authorized Officer in his affidavit.

However, learned counsel for the petitioner

submits that the petitioner was all along a tenant in

respect of the suit premises, initially from the year

1982 and thereafter upon another deed of lease being

executed in the year 2013. Since the petitioner is a

pre-existing tenant in respect of the property, it is

submitted that the premise on which the Section 14

order was passed, was palpably perverse.

The police report filed by learned counsel for the

State be kept on record.

In support of his contention, learned counsel

appearing for the Financial Institution submits by

placing reliance on (2019) 9 SCC 94 (Bajarang

Shyamsunder Agarwal vs. Central Bank of India and

another) that if any of the tenants claim that he is

entitled to possession of a secured asset for a term of

more than a year, it has to be supported by the

execution of a registered instrument. In the absence

of a registered instrument, if the tenant relies on an

unregistered instrument or an oral agreement

accompanied by delivery of possession, the tenant is

not entitled to possession of the secured asset for

more than the period prescribed under Section 107 of

the Transfer of Property Act.

Learned counsel for the Financial Institution

further places reliance on an unreported judgment

dated July 25, 2022 rendered by a coordinate Bench

of this court in WPA 16454 of 2022 [Aniruddha

Mukherjee & Anr. Vs. The Authorised Officer,

Cholamandalam Investment & Finance Company

Limited & Ors.), wherein it was held, inter alia, that

the petitioners therein having not challenged the

notices under Sections 13(2) and 13(4) of the

SARFAESI Act, which was also noted by the District

Magistrate in the order impugned therein, the

petitioners could not maintain an application under

Section 17 of the SARFAESI Act against a notice of

possession under Section 14 of the Act.

It was further recorded that the earlier Section

17 application challenging two other notices had

become infructuous.

It is, thus, contended that in the absence of a

challenge against the parent orders under Sections

13(2) and 13(4) of the SARFAESI Act, the present

challenge is not maintainable at the behest of the writ

petitioner.

Learned counsel for the petitioner places

reliance on a Division Bench judgment of this court

reported at AIR 2016 CAL 176 (State Bank of India and

another vs. Vivek Kumar Kejriwal), for the proposition

that a bona fide pre-existing tenant in the secured

asset is entitled to assail measures taken by the

secured creditor to take possession of the secured

property under Section 13(4) of the Act as well as

steps taken by the secured creditor under Section 14

of the Act before the Tribunal or the learned

Magistrate as the case may be.

Learned counsel for the Financial

Institution/respondent contends that it will be evident

from the Division Bench judgment itself that Section

35 of the SARFAESI Act provides that in case of

inconsistency, the said Act shall prevail over other

laws for the time being in force. Hence, it is argued

that in the absence of a challenge to the orders under

Sections 13(2) and 13(4), the provisions of the

SARFAESI Act would prevail and override the

provisions of the Rent Control Act.

At the outset, it is to be noticed that the

Financial Institution has placed reliance on an

undertaking filed by the petitioner, indicating that the

petitioner would vacate the entire premises within a

limited period, which belies the premise of the present

challenge. After having so undertaken, in normal

circumstances, it would not lie in the mouth of the

petitioner to resile from the said position.

However, in the peculiar facts of the case, it has

also been counter-alleged by the writ petitioner that

by a subsequent communication, the writ petitioner

denied that the undertaking was given by the

petitioner of his own volition. It was alleged that the

petitioner had given the same under compulsion and

force.

Be that as it may, the Writ Court, particularly

sitting in a challenge with regard to an order passed

under Section 14 of the SARFAESI Act, need not go

into the nitty-gritties of such factual context.

It appears from paragraph no. 24.3 of Bajarang

Shyamsunder Agarwal (supra), cited by the Financial

Institution, that the said judgment was delivered in

the context of the Transfer of Property Act, vis-à-vis

the provisions of the SARFAESI Act. It was

specifically stipulated by taking note of Section 107 of

the Transfer of Property Act and other provisions

thereof that if the tenants claim entitlement to

possession of a secured asset for a term of more than

a year, it has to be supported by the execution of a

registered instrument, as contemplated in the

Transfer of Property Act.

However, since the present petitioner claims to

be a tenant under the Rent Control Act, that is, the

West Bengal Premises Tenancy Act, 1997, the said

principle is not applicable. Prima facie case of tenancy

has been made out by the petitioner by annexing

certain rent receipts allegedly issued in favour of the

petitioner.

Hence, the ratio of the said judgment is not

applicable to the present case.

On a harmonious construction of the Division

Bench judgment rendered in Vivek Kumar Kejriwal

(supra) and the coordinate Bench judgment in the

unreported case of Aniruddha Mukherjee (supra), it

can be elucidated that a bona fide pre-existing tenant

in a secured asset is entitled to assail measures taken

by the secured creditor to take possession not merely

under Section 13(4) of the Act but also against steps

taken under Section 14 of the SARFAESI Act before

the Tribunal.

In the present case, the said ratio is squarely

applicable since the petitioner claims to be a pre-

existing tenant in the secured asset, that is, the

disputed property and has challenged the order

passed under Section 14 of the SARFAESI Act.

Inasmuch as the ratio of Aniruddha Mukherjee

(supra) is concerned, in the said case, it is not clear as

to whether the borrower or a tenant had approached

this court.

Since nothing appears from the said order to

indicate that a tenant had challenged the order under

Section 14 of the SARFAESI Act but from the apparent

tenor of the order it transpires that it was the

borrowers who had moved this court, the ratio laid

down therein in respect of non-maintainability of a

challenge to the order under Section 14 in the absence

of a challenge to the prior orders under Sections 13(2)

and 13(4) of the SARFAESI Act cannot hold good.

Reconciling and reading in conjunction the two

judgments, of the Division Bench and the coordinate

Bench, the principle which can be culled out is that

although a borrower may have certain restrictions in

challenging an order under Section 14 in isolation in

the absence of a challenge to the prior orders under

Sections 13(2) and 13(4) of the SARFAESI Act, no

such fetter is applicable to a pre-existing tenant who,

according to the Division Bench judgment, has a right

to challenge independently even an order under

Section 14 of the said Act.

Moreover, in the instant case, as rightly pointed

out by the writ petitioner, it was erroneously recorded

in the impugned order under Section 14 that the

property is not under lease and tenancy, apparently

on the strength of the affidavit, deeds, records and

other documents submitted by the Authorized Officer

in his affidavit.

As such, there is no whisper in the impugned

order with regard to the tenancy claimed by the

petitioner in respect of the self-same property, as is

apparent from the impugned order, which fact was

suppressed altogether by the Authorized Officer in his

affidavit. Even if the question of tenancy is disputed,

such dispute has never been raised at any point of

time at least by the Financial Institution. As such,

adopting a comprehensive view with regard to the

cited judgments, the impugned order under Section

14 of the SARFAESI Act was bad in the eye of law and

perverse inasmuch as the same did not take notice of

the alleged pre-existing tenancy of the petitioner in

respect of the premises.

Hence, even in the absence of a challenge by the

petitioner/tenant against the prior orders under

Sections 13(2) and 13(4) of the SARFAESI Act, the

present challenge to the order under Section 14

thereof is wholly tenable in the eye of law and is, thus,

allowed.

Accordingly, WPA No. 18376 of 2022 is allowed,

thereby setting aside the impugned order under

Section 14 of the SARFAESI Act, 2002, dated April 11,

2022 passed in Case No. 550/SARFAESI by the

District Magistrate, South 24 Parganas.

Liberty is given to the petitioner to challenge the

parent orders under Sections 13(2) and 13(4) of the

SARFAESI Act as well. If such a challenge is preferred

at the behest of the petitioner, nothing in this order

shall prejudice the rights and contentions of any of

the parties herein either way and it will be open to the

appropriate authority to decide such challenge

independently in accordance with law without being

influenced in any manner by any of the observations

made herein.

There will be no order as to costs.

Urgent photostat certified copies of this order, if

applied for, be made available to the parties upon

compliance with the requisite formalities.

(Sabyasachi Bhattacharyya, J.)