Karnataka High Court
Mohammed Maqmoor Ateeq vs Hdb Financial Services Ltd on 10 March, 2022
Bench: S.G.Pandit
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF MARCH, 2022
BEFORE
THE HON'BLE MR.JUSTICE S.G.PANDIT
WRIT PETITION No.5005/2022 (GM-RES)
BETWEEN:
MOHAMMED MAQMOOR ATEEQ
S/O MOHAMMED MUNTHAKIM-ULLA
AGED ABOUT 37 YEARS
R/AT NO.145 PRATHAMESH APARTMENTS
2ND AND 3RD CROSS, NEW BEL ROAD
RK GARDEN, RMV II STAGE
BENGALURU-560054
PRESENTLY AT NO.45
FLAT NO.401, 1ST CROSS
LIC COLONY, YESHWANTHAPURAM
BENGALURU-560022.
...PETITIONER
(BY SMT. SONA VAKKUND, ADV.)
AND:
1. HDB FINANCIAL SERVICES LTD
REGD. OFFICE AT RADHIKA
2ND FLOOR, LAW GARDEN ROAD
NAVRANGPURA
GUJARAT-380009
BRANCH OFFICE AT NO.1078, 2ND FLOOR
MAHALAKSHMIPURAM MAIN ROAD
ABOVE PUNJAB NATIONAL BANK
MAHALAKSHMI LAYOUT
BENGALURU-560086
2
REP. BY ITS AUTHORIZED OFFICE
SHRI H N MANJUNATH RAO.
2. SMT. C M MEENAXI
W/O MOHAMMED ZABI-ULLA ROSHAN
AGED ABOUT 55 YEARS
RESIDING AT NO.145, 3RD FLOOR
R K GARDEN, RMV 2ND STAGE
NEW BEL ROAD
BENGALURU-560054.
3. M/S. M R ENTERPRISES
REPRESENTED BY ITS PROPRIETRIX
SMT. C M MEENAXI
RESIDING AT NO.145, 3RD FLOOR
R K GARDEN, RMV 2ND STAGE
NEW BEL ROAD
BENGALURU-560054.
4. MS. RUBY NAZZ
D/O SMT. C M MEENAXI
AGED ABOUT 30 YEARS
RESIDING AT NO.145, 3RD FLOOR
R K GARDEN, RMV 2ND STAGE
NEW BEL ROAD
BENGALURU-560054.
5. SHRI KISHORE MUTHANNA
AGED: MAJOR
RESIDING AT NO.145, 3RD FLOOR
R K GARDEN, RMV 2ND STAGE
NEW BEL ROAD
BENGALURU-560054.
...RESPONDENTS
(BY SRI V.B. RAVISHANKAR, ADV. FOR C/R1)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
3
QUASH ANNEXURE-E DATED 27.05.2020 INCLUDING
REPORT DATED 24.02.2022 BY THE SHERISTEDAR IN CRL.
MISC NO.109/2019 ON THE FILE OF VII ADDL
METROPOLITAN MAGISTRATE AT BENGALURU IN SO FAR AS
THE PETITIONER IS CONCERNED AND DIRECT TO THE R-1
TO HANDOVER THE POSSESSION OF THE PROPERTY BACK
TO THE PETITIONER HEREIN.
THIS WRIT PETITION HAVING BEEN HEARD AND
RESERVED ON 05/03/2022 COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE
FOLLOWING:
ORDER
The petitioner, claiming to be a lessee of 1st floor of
the property bearing No.145, Prathamesh Apartment, 3rd
Cross, R.K. Garden, RMV 2nd Stage, New BEL Road,
Devasandra, Bengaluru - 560 054, which is mortgaged to
the first respondent-HDB Financial Services Limited (for
short 'the Financial Institution') is before this Court,
questioning the correctness of the order dated 27.05.2020
passed under Section 14 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (for short "the 2002 Act") and
also the mahazar dated 24.02.2022.
2. Heard Smt Sona Vakkund, learned counsel for the
petitioner and Sri V.B.Ravishankar, learned counsel for
caveator/respondent No.1. Perused the writ petition
papers.
3. Learned counsel for the petitioner submits that
petitioner is a lessee of 1st Floor consisting of 3 Bed Rooms
in the property bearing No.145, Prathamesh Apartment,
3rd Cross, R.K. Garden, RMV 2nd Stage, New BEL Road,
Devasandra, Bengaluru - 560 054, in pursuance of the
Lease Agreement dated 03.02.2017. Initially the period of
lease was for a period of 36 months and thereafter, the
same was extended by another 36 months under lease
agreement dated 07.02.2020. It is submitted that
respondents 2 to 5 had borrowed loan from the 1st
respondent-Financial Institution. As the respondents 2 to
5 failed to honour their commitment in repaying the loan
taken by them, the 1st respondent initiated recovery action
under the provisions of 2002 Act. The 1st respondent
approached the VII Additional Chief Metropolitan
Magistrate at Bangalore (for short 'the ACMM') under
Section 14 of the 2002 Act for possession of the mortgaged
property. In pursuance to the impugned order passed by
the ACMM, the 1st respondent-Financial Institution on
24.02.2022 barged into the house of the petitioner with
police force and forcibly the petitioner and his family
members were pulled out of the house, without even
allowing to take the belongings of the petitioner.
Subsequently on enquiry, the petitioner came to know
that since the respondents 2 to 5 failed to pay the loan
amount, as the property was mortgaged as security to the
loan, the 1st respondent has taken action to take
possession of the mortgaged property. Challenging the
impugned order dated 27.05.2020 passed under Section
14 of the 2002 Act as well as the mahazar dated
24.02.2022, taking possession of portion of the property in
which the petitioner was lessee, the petitioner is before
this Court in this writ petition.
4. Heard Smt. Sona Vakkund, learned counsel for the
petitioner and Sri V.B. Ravi Shankar, learned counsel for
the 1st respondent. Perused the writ petition papers.
5. Smt. Sona Vakkund, learned counsel submits that
petitioner is a lessee under unregistered lease from
03.02.2017 which is continued subsequently by lease
agreement dated 07.02.2020. The petitioner was not a
party to any of the proceedings and without giving an
opportunity to the petitioner and without following due
process of law, the petitioner is dispossessed from the 1st
floor of the premises in question. Learned counsel
submits that at least the petitioner ought to have been
made a party to the proceedings initiated under Section 14
of the 2002 Act. It is her submission that Section 14 of
the Act requires filing of an affidavit by the secured
creditor with regard to the nature of the property and as to
whether there are tenants in the property mortgaged.
Without disclosing the occupation of the property by the
tenants the 1st respondent-Financial Institution
approached the ACMM Court under Section 14 of the Act.
6. Learned counsel would further submit that
petitioner being a lessee under the lease agreement dated
03.02.2017 as well 07.02.2020, the petitioner ought to
have been evicted by following due process of law. The 1st
respondent could not have taken forcible possession of the
premises in which the petitioner was residing. The 1st
respondent-Financial Institution had not even taken
inventory, while taking possession of the property from the
petitioner. By drawing attention of this Court to the
Mahazar under which possession of the property is taken,
learned counsel submits that owner of the property, who
was residing in the 3rd floor of the Apartment has not been
evicted and without evicting the landlord, it is
unreasonable and arbitrary to evict only the petitioner,
who was in occupation of 1st floor. Thus she submits that
action of the 1st respondent is wholly unreasonable.
Learned counsel in support of her contention relies on the
decision of the Hon'ble Apex Court in HARSHAD
GOVARDHAN SONDAGAR Vs. INTERNATIONAL ASSETS
RECONSTRUCTION COMPANY LIMITED AND OTHERS
reported in (2014) 6 SCC 1 inviting attention of this Court
to paragraph 25 of the judgment to contend that the
petitioner was in lawful possession under a valid lease.
Hence without following the due process of law, petitioner
could not have been evicted. Further learned counsel also
relies upon the decision in VISHAL N. KALSARIA Vs.
BANK OF INDIA AND OTHERS reported in (2016) 3 SCC
762 to say that the petitioner is a protected tenant and
could be evicted only by following the due process of law.
7. Per contra, Sri V.B. Ravi Shankar, learned counsel
for the 1st respondent submits that petitioner is not a
lawful tenant or lessee and the petitioner is not in lawful
possession of the premises. He submits that the property
was mortgaged in favour of the 1st respondent-Financial
Institution on 17.03.2015 much prior to the alleged lease
dated 07.02.2017 in favour of the petitioner. Further he
submits that the lease is not a registered lease and there
is no document with regard to lawful possession or to
establish valid lease in favour of the petitioner. It is his
submission that in the decisions of HARSHAD
GOVARDHAN SONDAGAR as well as VISHAL N.
KALSARIA cited supra, the lessee was in lawful
possession under a valid lease. Further learned counsel
relied upon the decision of the Hon'ble Apex Court in
Criminal Appeal No.1371/2019 disposed of on 11.09.2019
in BAJARANG SHYAMSUNDER AGARWAL Vs. CENTRAL
BANK OF INDIA AND ANOTHER to contend that the
Three Judges Bench of the Hon'ble Supreme Court has
held that tenant claiming entitlement to possession of a
secured asset shall be supported by a registered lease
instrument or if the tenant relies on an un-registered
instrument or oral agreement, the tenant is not entitled to
possession more than the period under Section 107 of the
Transfer of Property Act. Further he submits that only
where a valid tenancy is created prior to the creation of
mortgage to the Bank, only such tenancy is recognized. It
is his submission that petitioner is not a tenant prior to
the mortgage of the property to the 1st respondent-
Financial Institution and further submits that creation of
tenancy in favour of the petitioner is also not intimated to
the Bank.
8. Learned counsel would next contend that the writ
petition is not maintainable since the petitioner is
provided with alternate remedy to approach the Debt
Recovery Tribunal under Section 17 of the 2002 Act.
Referring to Section 17(4A) of the 2002 Act, the learned
counsel would submit that the Debt Recovery Tribunal is
empowered to pass appropriate order, if the tenancy right
or lease hold rights are established. Thus he prays for
dismissal of the writ petition.
9. The petitioner claims that he is a lessee/tenant in
respect of the 1st floor of the property in question, which is
admittedly mortgaged on 17.03.2015 to the 1st
respondent-Financial Institution for the financial
assistance obtained by respondents 2 to 5. It is an
admitted fact that when respondents 2 to 5 failed to
adhere to their commitment in repaying the loan amount,
the 1st respondent initiated action under the provisions of
the 2002 Act to recover the amount due from respondents
2 to 5. On initiation of proceedings under Section 13 of
the Act, the 1st respondent filed a petition before the
ACMM under Section 14 of the 2002 Act. Under the
impugned order petition filed under Section 14 of the Act
is allowed. The 1st petitioner was permitted to take
possession of the mortgaged property with the help of the
jurisdictional police. Pursuant to the order dated
27.05.2020, after more than 1 ½ years the 1st respondent-
Bank on 24.02.2022 took possession of a portion of the
mortgaged property. Though the impugned order is dated
27.05.2020, the date of taking possession of the property
is on 24.02.2022 and the petitioner is before this Court by
filing the petition on 03.03.2022. The sequence of dates
mentioned above, creates a doubt in the mind of the Court
with regard to the bonafides of the petitioner. As
contended by the learned counsel for the 1st respondent-
Financial Institution the petitioner is provided with an
alternate remedy of approaching the Debt Recovery
Tribunal by filing an application under Section 17 of the
2002 Act. If the petitioner establishes valid lease and
lawful possession as observed by the Hon'ble Apex Court
in the decision of HARSHAD GOVARDHAN SONDAGAR
and VISHAL N KALSARA supra, the Tribunal is
competent to pass appropriate order under sub-Section
(4A) (ii) of Section 17 of the 2002 Act.
10. The Hon'ble Apex Court in a recent decision in Civil
Appeal Nos.257-259/2022 decided on 12.01.2022
PHOENIX ARC PRIVATE LIMITED Vs. VISHWA
BHARATHI VIDYA MANDIR AND OTHERS considering
Section 17 of the 2002 Act and earlier decisions has held
that ordinarily relief under Articles 226 and 227 of the
Constitution of India is not available, if an efficacious
alternative remedy is available to any aggrieved person.
The relevant portion at paragraphs 7.4, 7.5 and 7.6 reads
as follows :-
"7.4 In the case of City and Industrial
Development Corpn. Vs. Dosu Aardeshir
Bhiwandiwala, (2009) 1 SCC 168, it was
observed by this Court in paragraph 30 that the
Court while exercising its jurisdiction under
Article 226 is duty bound to consider whether
...............(c) the petitioner has any alternative or
effective remedy for the resolution of the dispute.
7.5 In the case of Kanaiyalal Lalchand
Sachdev and Ors. (supra) after referring to the
earlier decisions of this Court in the cases of
Sadhana Lodh Vs. National insurance Co.
Ltd. and Anr., (2003) 3 SCC 524; Surya Dev
Rai Vs. Ram Chander Rai and Ors., (2003) 6
SCC 675 and State Bank of India Vs. Allied
Chemical Laboratories and Anr., (2006) 9
SCC 252 while upholding the order passed by
the High Court dismissing the writ petition on the
ground that an efficacious remedy is available
under Section 17 of the SARFAESI Act, it was
observed that ordinarily relief under Articles
226/227 of the Constitution of India is not
available if an efficacious alternative remedy is
available to any aggrieved person.
7.6 Similar view has been expressed by
this Court in subsequent decisions in the case of
General Manager, Sri Siddeshwara
Cooperative Bank Limited & Anr. (supra) as
well as in the case of Agarwal Tracom Private
Limited (supra)."
11. In the present proceedings, I decline to examine as
to whether the petitioner is in lawful possession under a
valid lease and whether such valid lease is made prior to
the creation of mortgage by the borrower in favour of the
respondent-Financial Institution or whether the petitioner
is a protected tenant, since the same could be examined
by the Tribunal under Section 17(4A) of the 2002 Act,
which requires placing of evidence to decide the said
question.
12. Smt. Sona Vakkund, learned counsel for the
petitioner submits that belongings of the petitioner are
inside the premises of the I floor of the mortgaged
property, which the 1st respondent-Financial Institution
has taken possession and prays for a direction to the 1st
respondent-Financial Institution to hand over the
movables and belongings of the petitioner or an
opportunity to take those articles and movables from the
premises.
13. The request of the learned counsel for the petitioner
appears to be reasonable. Hence the following order :-
(i) The writ petition is disposed of with
liberty to the petitioner to approach the Debt
Recovery Tribunal under Section 17 of the
2002 Act.
(ii) The 1st respondent-Financial Institution is
directed to permit the petitioner to take the
movables and house hold articles from the
seized premises within ten days from today by
notifying the date and time to the petitioner.
Sd/-
JUDGE
MPK/NG
CT:bms
