M/S Bbr Enterprises vs Central Bank Of India And Another
2021 Latest Caselaw 153 Tel

      HON'BLE SRI JUSTICE A. RAJASHEKER REDDY

                                  AND

             HON'BLE SRI JUSTICE K. LAKSHMAN

                WRIT PETITION No.1315 OF 2020

ORDER: (Per Hon'ble Sri Justice K. Lakshman)

     Assailing the notice dated 07.01.2020 issued by the Advocate -

Commissioner requesting the petitioner to hand over physical

possession of the schedule property within fifteen (15) days, the

petitioner filed the present writ petition to declare the same as illegal

and to set aside the same.


     2. Heard Mr. G.K. Deshpande, learned counsel for the petitioner

and Mr. Ch. Shiva Reddy, learned counsel appearing on behalf of

respondent No.1 bank.

3. Since there is no serious dispute of factual matrix in the

present writ petition and pure question of law is involved, the present

writ petition is disposed of at the admission stage itself with the

consent of both sides.

4. The only contention of the writ petitioner in the present writ

petition is that the notice dated 07.01.2020 issued by the Advocate -

Commissioner requesting the petitioner to vacate the schedule

property within fifteen (15) days is behind its back. The Advocate

Commissioner has issued the said notice dated 07.01.2020 pursuant to

the warrant of execution dated 21.12.2019 in Crl.M.P.No.930 of 2019 ARR,J & KL,J W.P. No.1315/2020

issued by the Chief Metropolitan Magistrate, Cyberabad at L.B.

Nagar.

5. The petitioner is a tenant of property bearing House

No.2-23/80/4A (old) and 2-24-113/10/4 (new) on plot Nos.132 and

133 in Survey No.552, admeasuring 500 square yards being industrial

sheds admeasuring 3918 square feet along with remaining open land

situated at Laxminarayana Nagar Colony, Uppal Khalsa, Ranga

Reddy District, which is hereinafter referred to as 'Subject Property'.

The petitioner entered into an unregistered lease deed dated

19.12.2017 with respondent No.2 - landlord in respect of the subject

property for a period of five (05) years commencing from 01.01.2018.

It was put in physical possession of the subject property. The

petitioner has taken the subject property for the purpose of

manufacturing paper plates and other allied business activities.

6. Respondent No.1 bank filed its counter. According to it,

respondent No.2 herein and her husband availed credit facility from it

by making loan application on 26.11.2017, and an amount of Rs.1.80

Crores was sanctioned on 21.12.2017. Respondent No.2 has also

executed a registered memorandum of deposit title deed in favour of

respondent No.1 bank on 22.12.2017. Respondent No.2 herein

created security interest over the subject property for the said credit

facility. Thereafter, respondent No.2 and two others became

defaulters and their account was declared as Non-Performing Asset

(NPA). Thereafter, the bank has initiated measures under the ARR,J & KL,J W.P. No.1315/2020

provisions of the SARFAESI Act for recovery of the said debt. In the

said process, the Chief Metropolitan Magistrate, Cyberabad at L.B.

Nagar, in an application filed under Section 14 of the SARFAESI

Act, passed an order dated 21.12.2019 in Crl.M.P. No.930 of 2019.

Pursuant to the said order, the Advocate Commissioner has issued

notice dated 07.01.2020 to the petitioner giving fifteen (15) days time

to vacate and hand over the physical possession of the subject

property.

7. In the said application filed under Section 14 of the

SARFAESI Act, respondent No.1 bank did not declare that the

petitioner is tenant of the subject property - secured asset and did not

implead it. According to respondent No.1, it need not implead the

petitioner in the petition under Section 14 of the SARFAESI Act

since respondent No.1 bank is unaware of the said alleged lease

between the petitioner and respondent No.2 and that the petitioner is

claiming lease hold and possessory rights under an unregistered rental

deed. Respondent No.1 would further contend that as per Section 17

(1) (d) as mended by A.P. Act No.4 of 1999 w.e.f. 01.04.1999, leases

of immovable property for any period have to be compulsorily

registered and, therefore, the alleged lease deed dated 19.12.2017

based on which the petitioner is claiming its rights is not legally

tenable. The petitioner cannot continue to occupy the premises based

on legally untenable rental deed. The alleged lease deed was

executed on 19.12.2017 i.e., three days prior to the creation of ARR,J & KL,J W.P. No.1315/2020

mortgage in favour of respondent No.1 bank. Therefore, the said

lease deed was not brought to the knowledge of the bank and as such,

the same is not binding on the bank.

8. Mr. G.K. Deshpande, learned counsel for the petitioner,

would submit that the Chief Metropolitan Magistrate, Cyberabad at

L.B. Nagar, passed the orders behind back of the petitioner and the

Advocate Commissioner has issued notice dated 07.01.2020 to the

petitioner for vacating the subject property and the same would

amount to violation of principles of natural justice and Articles 14

and 300A of the Constitution of India. He has relied upon the

principle laid down by the Hon'ble Supreme Court in Harshad

Govardhan Sondagar v. International Assets Reconstruction

Company Limited1, Vishal N. Kalsaria v. Bank of India2,

Bajarang Shyamsunder Agarwal v. Central Bank of India3 as well

as a Division Bench of this Court in unreported judgments in M/s.

Atria Convergence Technology Pvt. Ltd. v. UCO Bank, rep. by its

Authorized Officer, Jubilee Hills Branch, Hyderabad4 and Sunil

Kumar Meena v. Bajaj Finance Limited5.

9. From the above said contentions and from the pleadings in the

affidavit, the undisputed facts are that respondent No.2 and her

husband have availed the credit facility from respondent No.1 bank

. (2014) 6 SCC 1

. (2016) 3 SCC 762

. 2020 (1) ALD 13 (SC)

. W.P. No.1830 of 2010, dated 11.02.2020

. W.P. No.2129 of 2020, dated 17.02.2020 ARR,J & KL,J W.P. No.1315/2020

by mortgaging the subject property - secured asset herein and that the

petitioner is claiming that it is a lessee of secured asset under an

unregistered lease deed dated 19.12.2017 and it is in possession of the

secured asset.

10. In Harshad Govardhan Sondagar1, the Apex Court had an

occasion to deal with the provisions of the SARFAESI Act, and the

Transfer of Property Act, 1882 (for short 'T.P. Act'), and held in

paragraph No.18 that Section 13 of the SARFAESI Act does not

provide that the lease in respect of the secured asset will get

determined when the secured creditor decides to take the measures in

the said Section. Hence, possession of the secured asset from a lessee

in lawful possession under a valid lease is not required to be taken

under the provisions of the SARFAESI Act and the Chief

Metropolitan Magistrate or the District Magistrate, therefore, does not

have any power under Section 14 of the SARFAESI Act to take

possession of the secured asset from such a lessee and hand over the

same to the secured creditor. When, a secured creditor moves the

Chief Metropolitan Magistrate or the District Magistrate for

assistance to take possession of the secured asset, he must state in the

affidavit accompanying application that the secured asset is not in

possession of a lessee under the valid lease made prior to creation of

the mortgage by the borrower or made in accordance with Section 65-

A of the T.P. Act prior to receipt of a notice under Section 13 (2) of

the SARFAESI Act by the borrower.

ARR,J & KL,J W.P. No.1315/2020

11. It was further held that on the request made by the secured

creditor for the assistance of taking possession of the secured asset,

the Chief Metropolitan Magistrate or the District Magistrate finds that

the secured asset is in possession of a lessee, but the lease under

which the lessee claims to be in possession of the secured asset,

stands determined in accordance of Section 111 of the T.P. Act, the

Chief Metropolitan Magistrate or the District Magistrate may pass an

order for delivery of possession of secured asset in favour of the

secured creditor to enable the secured creditor to sell and transfer the

same under the provisions of the SARFAESI Act.

12. In Vishal N. Kalsaria2, the Apex Court while dealing with

the provisions of the SARFAESI Act, T.P. Act and protection given

to the tenants under the relevant Rent Control Act, held that if the

parties are executing their rights and liabilities in the nature of a

landlord - tenant relationship and if regular rent is being paid and

accepted, then the mere factum of non-registration of deed will not

make the lease itself nugatory. By referring the facts of the said case

and also Section 55 (2) of the Maharashtra Rent Control Act, 1999,

the Apex Court further held that the onus to get a deed registered is

on the landlord. Neither can landlord nor the banks be permitted to

exploit the fact of non-registration of a tenancy deed against the

tenant. Thus, the Apex Court reiterated the principle laid down in

Harshad Govardhan Sondagar1. But, in the present case, the

petitioner is not claiming protection under Rent Control Act.

ARR,J & KL,J W.P. No.1315/2020

13. In Bajarang Shyamsunder Agarwal3, a three-Judge Bench

of the Apex Court agreed with the principle laid down by it in

Harshad Govardhan Sondagar1 and Vishal N. Kalsaria2. In the

said case, the Apex Court dealt with the objective of the SARFAESI

Act coupled with the T.P. Act and the Rent Act, reconciled in

paragraph No.25 as under:

(a) 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 Section 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 proceedings.

(b) 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, it has to satisfy the conditions of Section 65-A of the T.P. Act.

(c) 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 ARR,J & KL,J W.P. No.1315/2020

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 T.P. Act.

14. In the aforesaid said case, the appellant - tenant, claimed

tenancy under an oral agreement before mortgage deed was entered

into between the bank and the borrower. He has filed receipts issued

by the landlord in proof of receipt of rent and claim of lessee. He

sought to continue in the secured asset. The Chief Metropolitan

Magistrate concerned dismissed his application on the ground that the

tenant without any registered instrument is not entitled for possession

of the secured asset for more than one year from the date of execution

of unregistered tenancy agreement in accordance with the law laid

down in Harshad Govardhan Sondagar1. Feeling aggrieved by the

said order, the tenant therein approached the Hon'bel Apex Court.

On examination of the facts of the said case, it was held that the claim

of the tenant is not supported by any conclusive evidence, the

rejection of stay application by the Chief Metropolitan Magistrate

cannot be held to be erroneous

15. As stated above, the Apex Court affirmed the principle laid

down in Harshad Govardhan Sondagar1 and Vishal N. Kalsaria2

and held that the principle laid down in Vishal N. Kalsaria2 would ARR,J & KL,J W.P. No.1315/2020

not help the tenant as the earlier case proceeded with assumption of

valid and bona fide tenancy. It was further held that the stay

application of the tenant seems to be an after thought and the

borrower/landlord never intimated the secured creditor about the

alleged tenancy. Thus, the Apex Court held that it unable to accept

the claim of the bona fide tenancy of the tenant therein.

16. A Coordinate Bench of this Court in M/s. Atria

Convergence Technology Pvt. Ltd.4 and Sunil Kumar Meena5

relying on the principle laid down in Harshad Govardhan

Sondagar1 and Vishal N. Kalsaria2 and also distinguishing

Bajarang Shyamsunder Agarwal3, on the facts in the said writ

petitions held that the tenant is entitled to be impleaded in the

application under Section 14 of the SARFAESI Act. In Sunil Kumar

Meena5, the petitioner therein has claimed the lease-hold and

possessory rights over secured asset under a registered lease deed.

Whereas, in M/s. Atria Convergence Technology Pvt. Ltd.4, it is

not mentioned in the entire order as to whether the petitioner therein

has claimed the lease-hold and possessory rights under a registered

lease deed or an unregistered lease deed. It was further held that it is

the duty of the secured creditor to make enquiries as to whether there

is any tenant in occupation of the mortgaged property or not before it

initiates proceedings under Section 14 of the SARFAESI Act and its

duty to implead the tenant and seek eviction of the tenant before the ARR,J & KL,J W.P. No.1315/2020

Chief Metropolitan Magistrate after getting adjudication from him

about the validity of lease in favour of an occupant.

17. Thus, it is settled principle of law that the secured creditor

has to implead the tenant having valid lease. The secured creditor has

to seek eviction of tenant having valid lease before the Chief

Metropolitan Magistrate or the District Magistrate, as the case may

be. The Chief Metropolitan Magistrate or the District Magistrate, as

the case may be, shall after satisfying the contents of the affidavit

filed by the secured creditor under Section 14 of the SARFAESI Act,

pass suitable orders for the purpose of taking possession of the

secured asset.

18. In view of the said settled principle of law, coming to the

facts of the case on hand, the petitioner in the present writ petition is

claiming tenancy and possessory rights over the secured asset under

an unregistered lease deed. The petitioner has filed a copy of lease

deed dated 19.12.2017, wherein the term of lease is for a period of

five (05) years. By virtue of the said unregistered lease deed, the

petitioner is claiming that it is in possession of the secured asset -

subject property. There is no dispute with regard to possession of the

petitioner over the secured asset. In fact, it is supported by the

impugned notice dated 07.01.2020 issued by the Advocate

Commissioner to the petitioner to vacate the subject property and to

hand over the same within fifteen (15) days. Therefore, respondent

No.1 bank is having knowledge of the tenancy of the petitioner over ARR,J & KL,J W.P. No.1315/2020

the secured asset, the bank got issued the impugned notice to the

petitioner for eviction of the petitioner after obtaining orders from the

Magistrate Court under Section - 14 of the SARFAESI Act without

impleading the petitioner.

19. It is contended by the learned counsel for respondent No.1

bank that the Chief Metropolitan Magistrate/District Magistrate is not

having power of undertaking adjudication under Section 14 of the

SARFAESI Act and he plays a limited administrative role of

verifying certain factual aspects only. He has placed reliance on a

judgment in Balaji Centrifugal Castings v. ICICI Bank Limited6.

In the said case, a Division Bench of the High Court of Judicature at

Hyderabad for the State of Telangana and the State of Andhra

Pradesh relying on the principle laid down in Harshad Govardhan

Sondagar1 held that tenant is entitled for notice in an application

under Section 14 of the SARFAESI Act. On consideration of the

facts of the said case, the Division Bench held that the said principle

is not applicable since the petitioner therein wanted the Magistrate to

undertake adjudication while exercising power under Section 14 of

the SARFAESI Act. It is relevant to mention that on receipt of

affidavit filed in support of application under Section 14 of the

SARFAESI Act by the Authorized Officer, the Chief Metropolitan

Magistrate or the District Magistrate, as the case may be, shall after

. 2018 (5) ALD 376 ARR,J & KL,J W.P. No.1315/2020

satisfying the contents of the affidavit, pass suitable orders for the

purpose of taking possession of secured asset.

20. Therefore, we hold that the secured creditor has to declare

the tenancy having a valid lease, in an application under Section 14 of

the SARFAESI Act, and has to implead the tenant having valid lease.

The Chief Metropolitan Magistrate or the District Magistrate, as the

case may be, shall, after satisfying the contents of affidavit filed by

the secured creditor under Section 14 of the SARFAESI Act, pass

suitable orders for the purpose of taking possession of the secured

asset.

21. It is also pertinent to note that by way of an amendment vide

Act No.44 of 2016 w.e.f. 01.09.2016, Section 4-A was inserted in

Section - 17 of the SARFAESI Act, which is reproduced as under:

"(i) Where--

(i) any person, in an application under sub-section (1), claims any tenancy or leasehold rights upon the secured asset, the DRT, after examining the facts of the case and evidence produced by the parties in relation to such claims shall, for the purposes of enforcement of security interest, have the jurisdiction to examine whether lease or tenancy,--

a) has expired or stood determined; or

b) is contrary to section 65A of the Transfer of Property Act, 1882 (4 of 1882); or

c) is contrary to terms of mortgage; or

d) is created after the issuance of notice of default and demand by the Bank under subsection (2) of section 13 of the Act;

(ii) the Debt Recovery Tribunal is satisfied that tenancy right or leasehold rights claimed in secured asset falls under the sub-clause

(a) or sub-clause (b) or sub-clause (c) or sub-clause (d) of clause ARR,J & KL,J W.P. No.1315/2020

(i), then notwithstanding anything to the contrary contained in any other law for the time being in force, the Debt Recovery Tribunal may pass such order as it deems fit in accordance with the provisions of this Act."

22. Thus, the provision of law has been amended by inserting

Section - 17(4-A) in SARFAESI Act, specifically conferring

jurisdiction on the Debts Recovery Tribunal for deciding the question

of tenancy rights. Even a cursory reading of the Section - 17 (4-A) of

SARFAESI Act would make it clear that if any person claims any

tenancy or lease-hold rights in respect of secured asset, the Debts

Recovery Tribunal will have the jurisdiction to examine the claim of

tenancy or lease-hold rights and pass appropriate orders. The

Legislative intent of the said amendment appears to be that any

person claiming tenancy or lease-hold rights upon secured asset can

approach the jurisdictional Debts Recovery Tribunal under the said

provision, so that the Debts Recovery Tribunal will examine the

claim of tenancy or lease-hold rights and pass appropriate orders.

23. The learned counsel for respondent No.1 bank has also

relied upon the principle held by a Division Bench of High Court of

Judicature at Hyderabad for the State of Telangana and the State of

Andhra Pradesh in Smt. P. Kiranmai v. The Bank of Maharashtra7

for the very same principle that Bank need not disclose the tenancy of

a tenant claiming under an unregistered instrument in an application

under Section 14 of the SARFAESI Act. In the said case, the

. 2016 (4) ALT 418 ARR,J & KL,J W.P. No.1315/2020

Division Bench has also relied on the principle laid down by the Apex

Court in Harshad Govardhan Sondagar1 and on consideration of

the facts of the said case, held that the lease period of ten years

expired, therefore, the lease deeds got determined by expiry of the

said period of ten years. Subsequent lease on renewal is only by way

of an agreement and no registered lease deed is forthcoming as

required by condition No.16 mentioned therein. Then, it held that the

tenants therein have no right to question either the order passed under

Section 14 of the SARFAESI Act or the notice issued by the

Advocate-Commissioner.

24. Section 65-A of the T.P. Act deals with "mortgagor's power

to lease". As per Section 65-A (2) (c) of the T.P. Act, no such lease

shall contain a covenant for renewal. Section 106 of the T.P. Act

deals with "duration to certain leases in absence of written contract or

local usage" and as per sub-section (1) of Section 106, in the absence

of a contract or local law or usage to the contrary, a lease of

immovable property for agricultural or manufacturing process, shall

be deemed to be a lease from year to year, terminable, on the part of

either lessor or lessee, by six (06) months notice and a lease of

immovable property for any other purpose shall be deemed to be a

lease from month to month, terminable, on the part of either lessor or

lessee, by fifteen (15) days notice.

25. Section 107 of the T.P. Act deals with 'leases how made'

and as per it, a lease of immovable property from year to year, or for ARR,J & KL,J W.P. No.1315/2020

any term exceeding one year, or reserving a yearly rent, can be made

only by registered document. All other leases of immovable property

may be made either by a registered instrument or by oral agreement

accompanied by delivery of possession.

26. It is also relevant to note that as per Section 35 of the Indian

Stamp Act, 1899, no instrument chargeable with duty shall be

admissible in evidence for any purpose by any person having by law

or consent of parties, authority to receive evidence, or shall be acted

upon, registered or authenticated by any such person or by any public

officer. But, in the present case, it appears that it is not properly

stamped and unregistered one. As per Section 17 (1) (d) of the

Registration Act, 1908 as amended by A.P. Act No.4 of 1999 w.e.f.

01.04.1999, registration of leases of immovable property is

compulsory irrespective of period of lease.

27. In Samir Mukherjee v. Davinder K. Bajaj8, the Apex

Court by dealing with Sections 106 and 107 of the T.P. Act held that

leases for agricultural or manufacturing purposes shall be deemed to

be lease from year to year and all other leases shall be deemed to be

from month to month. Existence of a valid lease is a pre-requisite to

invoke the rule of construction embodied in Section 106 of the T.P.

Act. It further held that under Section 107 of the T.P. Act, parties

have an option to enter into a lease in respect of an immovable

property either for a term less than a year or from year to year, for any

. (2001) 5 SCC 259 ARR,J & KL,J W.P. No.1315/2020

term exceeding one year or reserving a yearly rent. If they decide

upon having a lease in respect of any immovable property from year

to year or for any term exceeding one year, or reserving yearly rent,

such a lease has to be only by a registered instrument. In the absence

of a registered instrument no valid lease from year to year or for a

term exceeding one year or reserving a yearly rent can be created. If

the lease is not a valid lease within the meaning of the opening words

of Section 106 the rule of construction embodied therein would not be

attracted. The above is the legal position on a harmonious reading of

both the sections.

28. It is relevant to mention that at paragraph Nos.28 and 36 of

Harshad Govardhan Sondagar1 the Apex Court discussed about

Rules - 8 (1) and (2) of the Security Interest (Enforcement) Rules,

2002 and Sections - 65A and 111 of the Transfer of Property Act with

regard to valid lease and scope of Section 14 of the SARFAESI Act.

The said paragraph Nos.28 and 36 are relevant to the present case and

the same are extracted as under:

"28. A reading of sub- rules (1) and (2) of Rule 8 of the Security Interest (Enforcement) Rules, 2002 would show that the possession notice will have to be affixed on the outer door or at the conspicuous place of the property and also published, as soon as possible but in any case not later than seven days from the date of taking possession, in two leading newspapers, one in vernacular language having sufficient circulation in that locality, by the authorised officer. At this ARR,J & KL,J W.P. No.1315/2020

stage, the lessee of an immovable property will have notice of the secured creditor making efforts to take possession of the secured assets of the borrower. When, therefore, a lessee becomes aware of the possession being taken by the secured creditor, in respect of the secured asset in respect of which he is the lessee, from the possession notice which is delivered, affixed or published in sub- rule (1) and sub- rule (2) of Rule 8 of the Security Interest (Enforcement) Rules, 2002, he may either surrender possession or resist the attempt of the secured creditor to take the possession of the secured asset by producing before the authorised officer proof that he was inducted as a lessee prior to the creation of the mortgage or that he was a lessee under the mortgagor in accordance with the provisions of Section 65A of the Transfer of Property Act and that the lease does not stand determined in accordance with Section 111 of the Transfer of Property Act. If the lessee surrenders possession, the lease even if valid gets determined in accordance with clause (f) of Section 111 of the Transfer of Property Act, but if he resists the attempt of the secured creditor to take possession, the authorized officer cannot evict the lessee by force but has to file an application before the Chief Metropolitan Magistrate or the District Magistrate under Section 14 of the SARFAESI Act and state in the affidavit accompanying the application, the name and address of the person claiming to be the lessee. When such an application is filed, the Chief Metropolitan Magistrate or the District Magistrate will have to give a notice and give an opportunity of hearing to ARR,J & KL,J W.P. No.1315/2020

the person claiming to be the lessee as well as to the secured creditor, consistent with the principles of natural justice, and then take a decision. If the Chief Metropolitan Magistrate or District Magistrate is satisfied that there is a valid lease created before the mortgage or there is a valid lease created after the mortgage in accordance with the requirements of Section 65A of the Transfer of Property Act and that the lease has not been determined in accordance with the provisions of Section 111 of the Transfer of Property Act, he cannot pass an order for delivering possession of the secured asset to the secured creditor. But in case he comes to the conclusion that there is in fact no valid lease made either before creation of the mortgage or after creation of the mortgage satisfying the requirements of Section 65A of the Transfer of Property Act or that even though there was a valid lease, the lease stands determined in accordance with Section 111 of the Transfer of Property Act, he can pass an order for delivering possession of the secured asset to the secured creditor.

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. Section 107 of the Transfer of Property Act provides that a lease of immoveable 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 immoveable ARR,J & KL,J W.P. No.1315/2020

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 an year from the date of the instrument or from the date of delivery of possession in his favour by the landlord."

29. In the present case, respondent No.2 has approached

respondent No.1 bank for credit facility by making loan application

on 26.11.2017 and an amount of Rs.1.80 Crores was sanctioned on

21.12.2017. Respondent No.2 has also executed a registered

memorandum of deposit of title deeds in favour of respondent No.1

bank on 22.12.2017. Admittedly, the petitioner is claiming lease hold

and possessory rights under an unregistered lease deed executed on

19.12.2017 for a period of five (05) years commencing from

01.01.2018 i.e., three days prior to the creation of mortgage in favour

of respondent No.1 bank by respondent No.2. Property is immovable.

Pursuant to the amendment w.e.f. 01.04.1999 to Section 17 (1) (d) of ARR,J & KL,J W.P. No.1315/2020

the Registration Act, 1908, all the leases of immovable property for

any period has to be compulsorily registered. In view of the same,

the petitioner, which is claiming lease hold and possessory rights

under an unregistered lease deed not properly stamped, cannot

question the notice to vacate dated 07.01.2020 issued by the Advocate

Commissioner pursuant to the order passed by the Chief Metropolitan

Magistrate, Cyberabad at L.B. Nagar on the ground that it is not

impleaded as it cannot continue in possession of the secured asset

beyond one year from the date of lease or date of possession as held

by the Apex Court at paragraph No.36 of Harshad Govardhan

Sondagar1.

30. It is also contended by the learned counsel for respondent

No.1 that the present writ petition is not maintainable in view of

availability of an alternative and efficacious remedy under the

provisions of the SARFAESI Act. But, we do not agree with the said

contention since the petitioner's contention is that it was denied an

opportunity of being heard in an application under Section 14 of the

SARFAESI Act before the Chief Metropolitan Magistrate, Cyberabad

at L.B. Nagar, and it amounts to violation of principles of natural

justice. Therefore, the writ petition is maintainable to examine the

said aspect since the said alternative remedy is not a bar for

maintaining the present writ petition when violation of principles of ARR,J & KL,J W.P. No.1315/2020

natural justice is alleged [See: Whirlpool Corporation v. Registrar

of Trade Marks, Mumbai9].

31. Since the matter is argued at length covering all the aspects

including merits, and since this Court is of the opinion that there is no

valid subsisting lease in favour of the petitioner, no useful purpose

will be served in relegating the petitioner to the Tribunal.

32. As discussed supra, the petitioner in the present case is not

having valid lease and, therefore, it cannot question the notice to

vacate dated 07.01.2020 issued by the Advocate Commissioner

pursuant to the order passed by the Chief Metropolitan Magistrate,

Cyberabad at L.B. Nagar, asking the petitioner to vacate and hand

over the secured asset within fifteen (15) days. The writ petition fails

and accordingly the same is liable to be dismissed.

33. In view of the foregoing discussion, the present Writ

Petition is dismissed. The interim stay granted by this Court on

22.01.2020 stands vacated. However, there shall be no order as to

costs.

As a sequel, miscellaneous petitions, if any, pending in the writ

petition shall stand closed.

______________________________ A. RAJASHEKER REDDY, J

______________________________ K. LAKSHMAN, J th 25 January, 2021 Mgr

. (1998) 8 SCC 1