Kerala High Court
Uthaman K.N vs The South Indian Bank Ltd on 19 February, 2025
2025:KER:14219
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
WEDNESDAY, THE 19TH DAY OF FEBRUARY 2025 / 30TH MAGHA, 1946
WP(C) NO. 42673 OF 2024
PETITIONER:
UTHAMAN K.N.,
AGED 55 YEARS,
S/O. NARAYANAN K.V., KELAMPARAMBIL HOUSE,
ARIMBUR P.O., THRISSUR, PIN - 680620.
BY ADVS.
GEORGE VARGHESE(PERUMPALLIKUTTIYIL)
MANU SRINATH
LIJO JOHN THAMPY
NIVEDITA MUCHILOTE
RESPONDENTS:
1 THE SOUTH INDIAN BANK LTD.,
REPRESENTED BY ITS CHIEF MANAGER, REGIONAL OFFICE,
FIRST FLOOR, PLATINUM JUBILEE BUILDING, CIVIL LANE
ROAD, AYYANTHOLE, THRISSUR, PIN - 680 006.
2 THE AUTHORISED OFFICER,
THE SOUTH INDIAN BANK LTD., REGIONAL OFFICE,
FIRST FLOOR, PLATINUM JUBILEE BUILDING, CIVIL LANE
ROAD, AYYANTHOLE, THRISSUR - 680 006.
3 POYYARA BALAN VIJIL @ VIJIL P.V.,
AGED 53 YEARS,
S/O. BALAN, POYYARA HOUSE, MATHILAKAM P.O.,
THRISSUR - 680 685.
WP(C) NO. 42673 OF 2024
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4 SINI NARAYANAN @ SINI VIJIL,
AGED 45 YEARS,
THOTTUPURA HOUSE, MANALOOR, KANJANY P.O.,
THRISSUR - 680 612.
5 ADDL.R5: UNION OF INDIA,
REPRESENTED BY SECRETARY TO THE DEPARTMENT OF LAW,
JUSTICE AND LEGISLATIVE AFFAIRS, C-WING, DELHI
SECRETARIAT, I.P. ESTATE, NEW DELHI - 110 001.
[IS IMPLEADED AS PER ORDER DATED 10/02/2025 IN I.A
NO.3/2025 IN WP(C) 42673/24]
BY ADV P.A.AUGUSTINE(AREEKATTEL), SC
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
19.02.2025, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
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JUDGMENT
The petitioner has approached this Court being aggrieved by
the proceedings initiated by the respondent Bank to take physical
possession of a shop room in which the petitioner is conducting a
barber shop. The shop room in question is situated on property
belonging to the 3rd respondent, who is indebted to the respondent
Bank. It is the case of the petitioner that the petitioner cannot be
evicted by resort to proceedings under the SARFAESI Act and if at all
he has to be evicted, proceedings will have to be initiated under the
Rent Control Law.
2. The learned counsel appearing for the petitioner
submits that the 3rd respondent had purchased the building at a time
when the father of the petitioner was a tenant in the building. It is
submitted that this fact is even mentioned in the document of title of
the 3rd respondent. It is submitted that the Bank was thus aware of the
fact that there were tenants and having undertaken the risk of
accepting the mortgage of a building / property with tenants, the Bank
cannot be heard to contend that they can evict persons in occupation
without having to resort to proceedings under the Rent Control Act.
The learned counsel appearing for the petitioner placed reliance on
the judgment of the Supreme Court in V.Dhanapal Chettiar v. Yesodai
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Ammal [1979 (4) SCC 214] in support of the contention that the
provisions of the Transfer of Property Act will not apply to a tenant
who is protected in terms of the provisions contained in the State Rent
Control Act. The learned counsel also placed reliance on the judgment
of the Supreme Court in Vishal N.Kalsaria v. Bank of India and Others
[2016 (3) SCC 762] in support of the contention that the provisions of
the SARFAESI Act will not override the provisions of the Rent Control
Law.
3. The learned counsel appearing for the respondent
Bank would submit that the petitioner is clearly not entitled to any
protection from eviction, on admitted facts. It is submitted that the
issue raised in the writ petition stands covered against the petitioner
by the judgments of the Supreme Court in Harshad Govardhan
Sondagar v. International Asset Reconstruction Co. Ltd. & Others
[2014 (6) SCC 1] ; Bajarang Shyamsunder Agarwal v. Central Bank of
India & Another [2019 (9) SCC 94] and Hemraj Ratnakar Salian v.
HDFC Bank Ltd. and Others [2021 KHC 6374] . It is submitted that
this Court referred to the judgments in Harshad Govardhan Sondagar
(supra), Bajarang Shyamsunder Agarwal (supra), Hemraj Ratnakar
Salian (supra) in the judgment in Canara Bank v. Sachin Shyam [2023
(1) KHC 503] where this Court had interfered with the proceedings of
a learned Magistrate under Section 14 of the SARFAESI Act, where the
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learned Magistrate had taken the view that granting an order for
taking possession under Section 14 of the SARFAESI Act would affect
the rights of a tenant. The learned counsel for the respondent Bank
also placed reliance on th recent judgment of the Supreme Court in S.
Shobha v. Muthoot Finance Ltd. (2025 SCC OnLine SC 177) to
contend that the respondent Bank is purely a private entity and does
not answer the definition of State under Article 12 of the Constitution
of India and therefore, no writ petition is maintainable in the matter.
4. Having heard the learned counsel appearing for the
petitioner and the learned counsel appearing for the respondent Bank,
I am of the view that the point raised in the writ petition is squarely
covered against the petitioner by the judgments of the Supreme Court
in Harshad Govardhan Sondagar (supra), Bajarang Shyamsunder
Agarwal (supra) and Hemraj Ratnakar Salian (supra). In Hemraj
Ratnakar Salian (supra), the Supreme Court after considering the
earlier judgments in Harshad Govardhan Sondagar (supra) and that of
the Three - Judge Bench in Bajarang Shyamsunder Agarwal (supra)
held as follows:-
"10. Procedural mechanism for taking possession of the
Secured Asset is provided under S.14 of the SARFAESI
Act. S.17 of the SARFAESI Act provides for the right of
appeal to any person including the borrower to
approach Debt Recovery Tribunal (DRT). S.17 has been
amended by Act No. 44 of 2016 providing for
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challenging the measures to recover secured debts (for
short, "the Amendment"). Under the Amendment,
possession can be restored to the borrower or such
other aggrieved person. This Amendment has come into
force w.e.f. 1st September, 2016. This Court in Harshad
Govardhan Sondagar v. International Asset
Reconstruction Co. Ltd. & Others, 2014 (6) SCC 1
has held that right of appeal is available to the tenant
claiming under the borrower. In Kanaiyalal Lalchand
Sachdev v. State of Maharashtra, 2011 (2) SCC 782,
this Court has held that DRT can not only set aside the
action of the secured creditor but even restore the
status quo ante. Therefore, an alternative remedy was
available to the appellant to challenge the impugned
order under S.17 of the SARFAESI Act even before the
amendment to S.17 of the SARFAESI Act. However,
given that the instant appeal has been pending
consideration before this Court from the year 2016, we
propose to examine the case on merits without
directing the appellant to avail the alternative remedy.
11. In Harshad Govardhan Sondagar (supra)
this Court has categorically held that if the tenancy
claim is for any term exceeding one year, the tenancy
can be made only by a registered instrument. It was
held thus :
"36. We may now consider the contention
of the respondents that some of the
appellants have not produced any
document to prove that they are bona fide
lessees of the secured assets. We find that
in the cases before us, the appellants have
relied on the written instruments or rent
receipts issued by the landlord to the
tenant. S.107 of the Transfer of Property
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Act provides that a lease of immovable
property from year to year, or for any term
exceeding one year or reserving a yearly
rent, can be made "only by a registered
instrument" and all other leases of
immovable property may be made either
by a registered instrument or by oral
agreement accompanied by delivery of
possession. Hence, if any of the appellants
claim that they are entitled to possession
of a secured asset for any term exceeding
one year from the date of the lease made
in his favour, he has to produce proof of
execution of a registered instrument in his
favour by the lessor. Where he does not
produce proof of execution of a registered
instrument in his favour and instead relies
on an unregistered instrument or oral
agreement accompanied by delivery of
possession, the Chief Metropolitan
Magistrate or the District Magistrate, as
the case may be, will have to come to the
conclusion that he is not entitled to the
possession of the secured asset for more
than a year from the date of the
instrument or from the date of delivery of
possession in his favour by the landlord."
12. A Three - Judge Bench of this Court in Bajarang
Shyamsunder Agarwal v. Central Bank of India &
Another, 2019 (9) SCC 94, after considering almost all
decisions of this Court, in relation to the right of a
tenant in possession of the secured asset, has held that
if a valid tenancy under law is in existence even prior to
the creation of the mortgage, such tenant's possession
cannot be disturbed by the secured creditor by taking
WP(C) NO. 42673 OF 2024
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possession of the property. If a tenancy under law
comes into existence after the creation of a mortgage
but prior to issuance of a notice under S.13(2) of the
SARFAESI Act, it has to satisfy the conditions of S.65 - A
of the Transfer of Property Act, 1882. If a tenant claims
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 said
decision of this Court, it was clarified that in the
absence of a registered instrument, if the tenant only
relies upon 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 the
provisions of the Transfer of Property Act. It was held
thus:
"24.1. If a valid tenancy under law is in
existence even prior to the creation of the
mortgage, the tenant's possession cannot be
disturbed by the secured creditor by taking
possession of the property. The lease has to be
determined in accordance with S.111 of the TP
Act for determination of leases. As the
existence of a prior existing lease inevitably
affects the risk undertaken by the bank while
providing the loan, it is expected of banks /
creditors to have conducted a standard due
diligence in this regard. Where the bank has
proceeded to accept such a property as
mortgage, it will be presumed that it has
consented to the risk that comes as a
consequence of the existing tenancy. In such a
situation, the rights of a rightful tenant cannot
be compromised under the SARFAESI Act
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proceedings.
24.2. If a tenancy under law comes into
existence after the creation of a mortgage, but
prior to the issuance of notice under S.13(2) of
the SARFAESI Act, it has to satisfy the
conditions of S.65 - A of the TP Act.
24.3. In any case, 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 S.107 of the TP Act."
13. It was further held that the Rent Act would not come
to the aid of a "tenant - in - sufferance" vis - a - vis
SARFAESI Act due to the operation of S.13(2) read with
S.13(13) of the SARFAESI Act. It was held as follows:
"35. The operation of the Rent Act cannot be
extended to a "tenant - in - sufferance" vis -
a - vis the SARFAESI Act, due to the operation
of S.13(2) read with S.13(13) of the SARFAESI
Act. A contrary interpretation would violate
the intention of the legislature to provide for
S.13(13), which has a valuable role in making
the SARFAESI Act a self - executory
instrument for debts recovery. Moreover,
such an interpretation would also violate the
mandate of S.35, SARFAESI Act which is
couched in broad terms."
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All the contentions taken by the learned counsel appearing for the
petitioner are covered against him by the judgment of the Supreme
Court in Hemraj Ratnakar Salian (supra). The judgment of the
Supreme Court in Vishal N. Kalsaria (supra) is a judgment of a two
Judge Bench rendered on 20.01.2016. In the light of the later
judgments of the three Judge Bench in Bajarang Shyamsunder
Agarwal (supra), the law laid down in Vishal N. Kalsaria (supra) is no
longer good law.
The writ petition fails and it is accordingly dismissed.
Sd/-
GOPINATH P.
JUDGE
DK
WP(C) NO. 42673 OF 2024
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APPENDIX OF WP(C) 42673/2024
PETITIONER EXHIBITS
Exhibit P1 A TRUE COPY OF THE ORDER DATED
09.10.2024 IN CRL.MP NO. 10767/2024 OF
THE CHIEF JUDICIAL MAGISTRATE, THRISSUR
Exhibit P2 A TRUE COPY OF THE EXTRACT OF THE
ASSESSMENT REGISTER FOR THE PERIOD 1982-
1987 OF THRISSUR CORPORATION
Exhibit P2(a) A TRUE COPY OF THE ASSESSMENT REGISTER
W.E.F 01.04.1994 OF THRISSUR CORPORATION
Exhibit P3 A TRUE COPY OF RENT RECEIPT DATED
01.10.1983
Exhibit P3(a) A TRUE COPY OF RENT RECEIPT DATED
01.01.1984
Exhibit P3(b) A TRUE COPY OF RENT RECEIPT DATED
01.06.1984
Exhibit P3(c) A TRUE COPY OF RENT RECEIPT DATED
01.05.1985
Exhibit P3(d) A TRUE COPY OF RENT RECEIPT DATED
01.04.1986
Exhibit P3(e) A TRUE COPY OF RENT RECEIPT DATED
01.10.1988
Exhibit P3(f) A TRUE COPY OF RENT RECEIPT DATED
01.01.1990
Exhibit P3(g) A TRUE COPY OF RENT RECEIPT DATED
01.07.1990
Exhibit P3(h) A TRUE COPY OF RENT RECEIPT DATED
01.06.1991
Exhibit P4 A TRUE COPY OF THE SALE DEED NO.
4474/2014 DATED 25.09.2014 OF SRO
THRISSUR
WP(C) NO. 42673 OF 2024
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Exhibit P5 A TRUE COPY OF THE SALE DEED NO.
438/2018 DATED 20.02.2018 OF SRO
THRISSUR
Exhibit P6 A TRUE COPY OF THE PHOTOGRAPHS SHOWING
THE SHOP ROOM IN OCCUPATION OF THE
PETITIONER
Exhibit P7 A TRUE COPY OF THE NOTICE DATED
05.11.2024 ISSUED BY THE ADVOCATE
COMMISSIONER TO THE 3RD AND 4TH
RESPONDENTS
Exhibit P8 A TRUE COPY OF C.M.P NO.10767/ 2024
FILED BY RESPONDENTS 1 AND 2 BEFORE THE
CHIEF JUDICIAL MAGISTRATE COURT THRISSUR
Exhibit P9 A TRUE COPY OF THE CONSOLIDATED
ELECTRICITY BILL ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT FOR
THE YEAR 2013-2014
Exhibit P9(a) A TRUE COPY OF THE CONSOLIDATED
ELECTRICITY BILL ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT FOR
THE YEAR 2014-2015
Exhibit P9(b) A TRUE COPY OF THE CONSOLIDATED
ELECTRICITY BILL ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT FOR
THE YEAR 2015-2016
Exhibit P9(c) A TRUE COPY OF THE CONSOLIDATED
ELECTRICITY BILL ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT FOR
THE YEAR 2016-2017
Exhibit P9(d) A TRUE COPY OF THE CONSOLIDATED
ELECTRICITY BILL ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT FOR
THE YEAR 2017-2018
Exhibit P9(e) A TRUE COPY OF THE CONSOLIDATED
ELECTRICITY BILL ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT FOR
THE YEAR 2018-2019
WP(C) NO. 42673 OF 2024
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Exhibit P9(f) A TRUE COPY OF THE CONSOLIDATED
ELECTRICITY BILL ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT FOR
THE YEAR 2019-2020
Exhibit P9(g) A TRUE COPY OF THE CONSOLIDATED
ELECTRICITY BILL ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT FOR
THE YEAR 2020-2021
Exhibit P9(h) A TRUE COPY OF THE CONSOLIDATED
ELECTRICITY BILL ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT FOR
THE YEAR 2021-2022
Exhibit P9(i) A TRUE COPY OF THE CONSOLIDATED
ELECTRICITY BILL ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT FOR
THE YEAR 2022-2023
Exhibit P9(j) A TRUE COPY OF THE CONSOLIDATED
ELECTRICITY BILL ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT FOR
THE YEAR 2023-2024
Exhibit P9(k) A TRUE COPY OF THE CONSOLIDATED
ELECTRICITY BILL ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT FOR
THE YEAR 2024-2025
Exhibit P10 A TRUE COPY OF THE BUILDING CERTIFICATE
NO. PTBC-01663599-2025 DATED 01.01.2025
ISSUED BY THE THRISSUR MUNICIPAL
CORPORATION
Exhibit P11 A TRUE COPY OF THE RECENT EXTRACT OF THE
ASSESSMENT REGISTER OF THE OLD SHOP ROOM
NO. 12/188 (NEW SHOP ROOM NO. 39/846-1)
OF THRISSUR CORPORATION
Exhibit P12 A TRUE COPY OF THE ELECTRICITY BILL
PAYMENT RECEIPT ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT DATED
19.12.2024
Exhibit P12(a) A TRUE COPY OF THE ELECTRICITY BILL
PAYMENT RECEIPT ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT DATED
23.02.2024
WP(C) NO. 42673 OF 2024
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Exhibit P12(b) A TRUE COPY OF THE ELECTRICITY BILL
PAYMENT RECEIPT ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT DATED
26.12.2023
Exhibit P12(c) A TRUE COPY OF THE ELECTRICITY BILL
PAYMENT RECEIPT ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT DATED
26.10.2023
Exhibit P12(d) A TRUE COPY OF THE ELECTRICITY BILL
PAYMENT RECEIPT ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT DATED
19.08.2023
Exhibit P12(e) A TRUE COPY OF THE ELECTRICITY BILL
PAYMENT RECEIPT ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT DATED
20.06.2023
Exhibit P12(f) A TRUE COPY OF THE ELECTRICITY BILL
PAYMENT RECEIPT ISSUED BY THE THRISSUR
CORPORATION ELECTRICITY DEPARTMENT DATED
24.04.2023
