Karnataka High Court
Smt. P. N. Vijayalakshmi vs Hinduja Leyland Finance Ltd on 4 February, 2025
Author: R Devdas
Bench: R Devdas
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NC: 2025:KHC:4972
WP No. 19820 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR JUSTICE R DEVDAS
WRIT PETITION NO. 19820 OF 2024 (GM-RES)
BETWEEN:
SMT. P.N. VIJAYALAKSHMI
W/O LATE P. NANDAKUMAR,
AGED ABOUT 78 YEARS,
FLAT NO.H-204, GROUND FLOOR,
BLOCK NO.2,
SHOBHA DEWFLOWER APARTMENTS,
SARAKKI MAIN ROAD, J.P. NAGAR 1ST PHASE,
BANGALORE - 560 078.
...PETITIONER
(BY SRI. V. MOHAN, ADVOCATE)
AND:
1. HINDUJA LEYLAND FINANCE LTD.,
Digitally signed by REGISTERED OFFICE NO.1,
DHARMALINGAM SARDAR PATEL ROAD, CHENNAI - 600 032,
Location: HIGH BRANCH OFFICE AT,
COURT OF NO.2/6, ABOVE MAX HERO SHOW ROOM,
KARNATAKA
DR. RAJKUMAR ROAD, 4TH BLOCK,
RAJAJINAGAR, BANGALORE - 560 010,
REPRESENTED BY AUTHORISED OFFICER,
MR. VIJAY T, SECURED CREDITOR
AND GENERAL MANAGER.
(BANKING COMPANY REGISTERED UNDER
COMPANIES ACT 1949 - BANKER FOR LESSOR)
2. M/S. SRI. RAGHAVENDRA ART PRODUCTION
PROP MR. G. BHAKTHAVATHSALAM,
FLAT NO.H 204, GROUND FLOOR,
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WP No. 19820 of 2024
2ND BLOCK, SHOBHA DEWFLOWER,
M/G GARDEN, 4TH MAIN,
J P NAGAR, 1ST PHASE,
BANGALORE - 560 078,
REGISTERED FIRM.
ALSO AT PROPRIETOR
MR. G. BHAKTHAVATSALAM,
S/O LATE G. PANDURANGAIAH,
AGED ABOUT 54 YEARS,
R/AT NO.A-18G2, BRIGADE MEADOWS,
KANAKAPURA ROAD, NEAR ART OF LIVING,
UDAYAPURA POST, OPP ANJANEYA TEMPLE,
BANGALORE - 560 082
BORROWER/LESSOR.
3. MRS. SUNITHA
W/O MR. G. BHAKTHAVATSALAM,
AGED ABOUT MAJOR,
FLAT NO.H-204, GROUND FLOOR,
2ND BLOCK, SHOBHA DEWFLOWER,
M/G GARDEN, 4TH MAIN,
J P 1ST PHASE, BANGALORE - 560 078.
ALSO AT MRS. G SUNITHA,
W/O MR G. BHAKTHAVATSALAM,
AGED ABOUT MAJOR,
R/AT NO.A-18G2, BRIGADE MEADOWS,
KANAKAPURA ROAD, NEAR ART OF LIVING,
UDAYAPURA POST, OPP ANJANEYA TEMPLE,
BANGALORE - 560 082.
4. MR. G. SANKETH
S/O MR. BHAKTHAVATSALAM,
AGED ABOUT 32 YEARS,
R/AT NO.A/18G2, BRIGADE MEADOWS,
KANAKAPURA ROAD, UDAYAPURA POST,
OPPOSITE TO ANJANEYA TEMPLE,
BANGALORE - 560 008.
ALSO AT MR. G. SANKETH,
S/O MR. G. BHAKTHAVATSALAM,
AGED ABOUT 32 YEARS,
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WP No. 19820 of 2024
R/AT NO.A-18G2, BRIGADE MEADOWS,
KANAKAPURA ROAD, NEAR ART OF LIVING,
UDAYAPURA POST, OPP ANJANEYA TEMPLE,
BANGALORE - 560 082,
BORROWER/LESSOR.
...RESPONDENTS
(BY SMT. RADHA R, ADVOCATE FOR R1;
SRI. VISHAL TIWARI, ADVOCATE FOR R2;
SRI. K.N. SURESH KUMAR, ADVOCATE FOR R3 AND R4)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE PROCEEDINGS INITIATED BY 1ST RESPONDENT-
BANK U/S.14 OF SARFAESI ACT VIDE
CRL.MISC.NO.5319/2023 PENDING BEFORE THE CHIEF
METROPOLITAN MAGISTRATE, BANGALORE (ANNEXURE.A)
IN RESPECT OF THE SCHEDULE PROPERTY AND ETC.
THIS WRIT PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
CORAM: HON'BLE MR JUSTICE R DEVDAS
ORAL ORDER
The petitioner who claims to be a tenant under
respondent No.4-Sri.G.Sanketh and Sri.G.Bhaktha-
vatsalam, who is none other than respondent No.2 and
the husband of respondent No.3 and father of
respondent No.4, under a Renewal Rental Agreement
dated 01.01.2023. The petitioner is aggrieved of the
measures taken by respondent No.1-Financial
Institution under Section 14 of the Securitisation and
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Reconstruction of Financial Assets and Enforcement of
Securities Interest Act, 2002 (for short, 'the SARFAESI
Act'). Respondent No.1-Financial Institution has
approached the Chief Metropolitan Magistrate,
Bengaluru in Crl.Misc.5319/2023 seeking permission to
take possession of the secured assets and it had also
sought for the jurisdictional police to render assistance
to respondent No.1 to take possession of the property.
2. Learned Counsel for the petitioner submits that
Annexure-H is an interim order passed by this Court in
RFA.No.363/2021, which was filed by the petitioner's
husband Sri.P.Nanda Kumar and Another. The
petitioner herein was challenging an order dated
09.04.2021, passed in I.A.No.1/2019, in
O.S.No.25451/2017 on the file of IV Additional City
Civil and Sessions Judge, Mayohall, Benglauru. It is
pointed out that by order dated 28.04.2021, this Court
while issuing Emergent Notice, granted interim order
as prayed for, thereby staying the order dated
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09.04.2021 in I.A.No.1/2019. It is submitted that
despite such an interim order passed by this Court,
respondent No.1 has approached the Jurisdictional
Magistrate filing an Application under Section 14 of the
SARFAESI Act, 2002.
3. It is also contended that in the case of
Hemaraj Ratnakar Salian Vs. HDFC Bank Limited &
Others, AIR 2021 SC 3880, the Hon'ble Supreme
Court has held that if a tenancy under law comes into
existence after the creation of a mortgage, but prior to
the issuance of notice under Section 13(2) of the
SARFAESI Act, 2002, it has to satisfy the conditions of
Section 65A of the Transfer of Property Act, 1882.
Learned Counsel for the petitioner submits that the
petitioner has entered into a Lease Agreement on
01.01.2023 and the petitioner stands protected under
the provisions of Section 65A of the Transfer of
Property Act.
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4. However, on going through the said judgment, it
is clear that the borrower would be required to seek
consent of the secured creditor for transfer of secured
asset by way of sale, lease or otherwise, after issuance
of the notice under Section 13(2) of the SARFAESI Act,
2002 and admittedly, no such consent has been sought
by the borrower. If the lease is created prior to
issuance of notice under Section 13(2) of the Act at the
hands of the secured creditor, for a limited purpose,
protection is provided to such a lessee. Section 65A of
the Transfer of Property Act, 1882, provides that the
subject to the provisions of sub-section (2) of Section
65A, of the Act, 1882, a mortgagor, while lawfully in
possession of the mortgaged property, shall have
power to make leases thereof which shall be binding on
the mortgagee. However, it would be subject to sub-
section (2) of the provision. Sub-section 2(a) provides
that every such lease shall be such as would be made
in the ordinary course of management of the property
concerned, and in accordance with any local law,
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custom or usage. It is important to notice that Clause
(c) provides that no such lease shall contain a
covenant for renewal. Clause (d) provides that every
such lease shall take effect from a date not later than
six months from the date on which it is made. Clause
(e) provides that in the case of a lease of buildings,
whether leased with or without the land on which they
stand, the duration of the lease shall in no case exceed
three years, and the lease shall contain a covenant for
payment of the rent and a condition of re-entry on the
rent not being paid within a time therein specified.
5. Per contra, learned Counsel for respondent No.1
submits that the 'Renewal Rental Agreement' has been
produced at Annexure-C and it is not a registered
document. Learned Counsel submits that although the
stamp duty is said to be paid and collected by the
Deputy Commissioner of Stamps, Jayanagar, however,
it is not a registered instrument. It is also submitted
that in terms of Section 17(1)(d) of the Registration
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Act, 1908, any lease of immovable property from year-
to-year or for any term exceeding one year would
require compulsory registration. That being the
position, it is submitted that the petitioner cannot
contend before this Court that she is a protected
tenant and therefore, before taking possession of the
secured asset, respondent No.1 should have issued
notice to the petitioner and should have followed all
the procedures as contemplated under law.
6. Having heard the learned Counsel for the
petitioner, learned Counsel for the contesting
respondent No.1 and on perusing the petition papers,
this Court is of the considered opinion that the
petitioner is not a protected tenant, who could seek
protection under Section 65A of the Transfer of
Property Act. It is also noticeable that the petitioner
filed a suit in O.S.No.25451/2017, before the
Additional City Civil and Sessions Court, Bengaluru,
against the respondents herein, including the Financial
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Institution, seeking a direction that the Financial
Institution should not evict the petitioner without due
process of law. The said suit was dismissed on the
ground that the measures taken by the Financial
Institution under SARFASEI Act, cannot become a
subject matter of a litigation before a civil court. The
application filed by respondent No.1 under Order VII
Rule 11 of CPC was allowed and the plaint was
rejected. Following the same, the petitioner filed
appeal in RFA No.363/2021 and there appears to be an
interim order insofar as the order passed in
I.A.No.1/2019, rejecting the plaint. That by itself will
not enable the petitioner to challenge an Application
filed by respondent No.1, before the jurisdictional
Magistrate under Section 14 of the SARAESI Act.
7. It is by now clear that the petitioner is seeking
to come to the rescue of respondents No.2 to 4, who
are the borrowers from respondent No.1-Bank. The
other respondents have set up the petitioner to ensure
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that the secured assets are not sold and the Financial
Institution does not recover the money lent to the
private respondents herein. Surely, the law protecting
the interest of a tenant is only under certain
circumstances, where no harm would be caused to the
secured assets of the secured creditor. If such petitions
are allowed, the secured creditor would never be able
to recover the outstanding loan amount along with
interest.
8. For the reasons stated above, this Court is
convinced that the writ petition has no merits.
Accordingly, the writ petition stands dismissed.
9. Pending I.As., if any, stand disposed of.
Sd/-
(R DEVDAS)
JUDGE
rv,DL
CT: BHK
