Mohammed Shajeer C.T vs The Cherapalcheri Co-Operative ...
2023 Latest Caselaw 856 Ker

                     IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                      PRESENT
                     THE HONOURABLE MR. JUSTICE GOPINATH P.
         TUESDAY, THE 17TH DAY OF JANUARY 2023 / 27TH POUSHA, 1944
                             WP(C) NO. 42745 OF 2022


PETITIONER:

     1        MOHAMMED SHAJEER C.T.
              AGED 33 YEARS
              S/O MUHAMMEDALI, CHOLAKKATHODY HOUSE,
              ANAMANGAD, VALAMKULAM POST, MALAPPURAM, PIN - 679357
              BY ADVS.
              BINU V V VEETTIL VALAPPIL
              S.K.PREMJITH MENON
              MANEKSHA D.
              P.J.STEPHEN

RESPONDENTS:

     1        THE CHERAPALCHERI CO-OPERATIVE URBAN BANK LTD. NO.1696,
              REP. BY ITS GENERAL MANAGER,
              MAIN BRANCH, CHERAPALCHERI,
              PALAKKAD DISTRICT, PIN - 679503
     2        THE AUTHORISED OFFICER,
              THE CHERPALCHERI CO-OPERATIVE URBAN BANK LTD.,
              MAIN BRANCH, CHERAPALCHERI,
              PALAKKAD DISTRICT, PIN - 679503
     3        HARISH
              AGED 51 YEARS
              S/O HAMZA, PULATHARAKKAL, CHERPALCHERI,
              PALAKKAD, PIN - 679503
              BY ADVS.
              JAYARAJ M
              K.VIDYASAGAR
              MOHAMAD IRSHAD N.P.(K/902/2003)

     THIS     WRIT    PETITION   (CIVIL)   HAVING   COME   UP   FOR   ADMISSION   ON
17.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WPC No.42745 of 2022
                                          2


                                  JUDGMENT

Dated this the 17th day of January, 2023

The petitioner claims to be a tenant in respect of

certain property belonging to the third respondent.

Proceedings have been initiated against the third

respondent under the provisions of the SARFAESI Act,

2002 to recover amounts due under credit facilities

extended to the third respondent by the first

respondent bank. The petitioner states that the

petitioner cannot be evicted from the premises in

proceedings under Section 14 of the SARFAESI Act. It

is submitted that the petitioner is a tenant whose

rights are protected under the Rent Control Laws and

the petitioner cannot be evicted summarily by

recourse to proceedings under Section 14 of the

SARFAESI Act.

2. Learned counsel appearing for the first

respondent submits that this writ petition is collusive

affair between the petitioner and the third respondent. WPC No.42745 of 2022

It is submitted that the third respondent had

approached this Court challenging proceedings

initiated by the bank and this Court through Ext.P5

judgment had permitted the third respondent to clear

the then overdue amounts in instalments. It is

submitted that that third respondent did not comply

with the terms of that judgment (which is dated

19.09.2022) and is now attempting to delay the

proceedings further by putting up the writ petitioner.

3. Having heard the learned counsel for the

petitioner and the learned counsel appearing for the

respondents, I am of the view that no relief can be

granted to the petitioner in this writ petition.

4. I have considered the rights of a tenant to

object to proceedings initiated under the provisions of

the SARFAESI Act in W.P.(C.) No.28054/2021, where I

have held as follows:

"The question as to whether the Magistrate is required to consider the right of tenants in an application filed u/s.14 of the SARFAESI Act came up for consideration before the Supreme Court in WPC No.42745 of 2022

Balkrishna Rama Tarle Dead Thr. LRS & Anr. v. Phoenix ARC Private Limited & Ors; 2022 (5) KLT OnLine 1150 (SC) (judgment dated 26.9.2022 in S.L.P.No.16013/2022). The facts of that case show that the secured creditor had preferred an application u/s.14 of the SARFAESI Act before the designated authority u/s. 14 of that Act. The petitioner in the Special Leave Petition claimed to be a tenant in respect of some parts of the secured asset in question and claimed that he could not be evicted without following the legal process for eviction. The tenant also relied on an order obtained by him in a Civil Suit filed by him against one of the borrowers, where an order restraining his dispossession from the premises in question came to be issued. The designated authority inter alia held that the possession of the secured asset could be taken only upon termination of the tenancy right of the petitioner in the Special Leave Petition. This order of the designated authority was set aside by the High Court of Judicature at Bombay in W.P. (C)No.9749/2021. That order of the Division Bench was challenged before the Supreme Court by filing S.L.P.No.16013/2022. On a consideration of the matter, and following the judgment in M/s R.D Jain & Co. v. Capital First Ltd. & ors (Judgment in Civil Appeal No. 175/2022 dated 27.07.2022) the Supreme Court held as follows:-

WPC No.42745 of 2022

Thus, the powers exercisable by CMM/DM under Section 14 of the SARFAESI Act are ministerial step and Section 14 does not involve any adjudicatory process qua points raised by the borrowers against the secured creditor taking possession of the secured assets. In that view of the matter once all the requirements under Section 14 of the SARFAESI Act are complied with/satisfied by the secured creditor, it is the duty cast upon the CMM/DM to assist the secured creditor in obtaining the possession as well as the documents related to the secured assets even with the help of any officer subordinate to him and/or with the help of an advocate appointed as Advocate Commissioner. At that stage, the CMM/DM is not required to adjudicate the dispute between the borrower and the secured creditor and/or between any other third party and the secured creditor with respect to the secured assets and the aggrieved party to be relegated to raise objections in the proceedings under Section 17 of the SARFAESI Act, before Debts Recovery Tribunal. Under the circumstances in the present case no error has been committed by the High Court in setting aside the order dated 27.08.2021 passed by the designated authority keeping the application pending till the secured creditor initiates the legal proceedings for eviction of the tenant cannot WPC No.42745 of 2022

get the possession in an application under Section 14 of the SARFAESI Act. The High Court has rightly directed the designated authority to proceed further with the application under Section 14 of the SARFAESI Act, and to dispose of the same in accordance with the provisions of Section 14 of the SARFAESI Act."

In the light of the law laid down by the Supreme Court in Balkrishna Rama Tarle (supra), Ext.P7 order of the learned Chief Judicial Magistrate, Alappuzha cannot be sustained. Even in the facts of this case, the 3rd respondent has no case that any proceeding initiated by the petitioner u/s.14 of the SARFAESI Act had been challenged by the 3rd respondent in proceedings before the Debts Recovery Tribunal u/s.17 of the SARFAESI Act. Still further it must be noticed that, in the light of the law laid down by the Supreme Court in Bajarang Shyamsundar Agarwal (supra), the absence of a registered document will establish that the tenant is not entitled to possession of secured asset for a period exceeding the limit prescribed u/s.107 of the Transfer Property Act."

Here also the petitioner does not claim under a

registered deed. Therefore, the petitioner may not be

entitled to claim that he is entitled to continue the WPC No.42745 of 2022

tenancy beyond the period specified under Section 107

of the Transfer of Property Act.

5. Faced with this situation, learned counsel for

the petitioner submitted that the petitioner may be

permitted to agitate the matter before the Tribunal.

Since it is settled that the petitioner as a tenant can

approach the Tribunal under Section 17 of the

SARFAESI Act, I deem it appropriate to direct that the

proceedings for taking physical possession shall stand

deferred till 30.01.2023 to enable the petitioner to

approach the Tribunal by filing a Securitisation

Application. The Tribunal shall consider the matter in

accordance with law and also after taking note of the

judgment of this Court in W.P.(C.) No.28054/2021.

The writ petition is disposed of as above.

Sd/-

GOPINATH P.

JUDGE SKP/17-01 WPC No.42745 of 2022

APPENDIX OF WP(C) 42745/2022

PETITIONER'S EXHIBITS:

EXHIBIT P1 TRUE COPIES OF TRADE LICENCES ISSUED BY THE CHERPULASSERY MUNICIPALITY TO THE PETITIONER FROM 2019 ONWARDS.

EXHIBIT P2 TRUE COPY OF THE LICENCE AGREEMENT ENTERED BETWEEN THE PETITIONER AND THE 3RD RESPONDENT, DATED 17/01/2019.

EXHIBIT P3 TRUE COPY OF THE LICENCE AGREEMENT ENTERED BETWEEN THE PETITIONER AND THE 3RD RESPONDENT, DATED 22/02/2021.

EXHIBIT P4 TRUE COPIES OF THE PAYMENT RECEIPT OF THE MONTHLY LICENCE FEE TO THE 3RD RESPONDENT BY THE PETITIONER EXHIBIT P5 TRUE COPY OF THE ORDER OF THIS HON'BLE COURT IN W.P.(C) 27697 OF 2022, DATED 19/09/2022 RESPONDENTS' EXHIBITS:NIL

TRUE COPY

P.A. TO JUDGE