M/S. Sai Durga Agrotech ... vs Bank Of Baroda Erstwhile Vijaya ...
2021 Latest Caselaw 154 Tel

        HON'BLE SRI JUSTICE A. RAJASHEKER REDDY

                                  AND

            HON'BLE SRI JUSTICE K. LAKSHMAN

                WRIT PETITION No.8945 OF 2020

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

     Assailing the notice to vacate dated 16.06.2020 issued by

respondent No.1 - Bank directing the petitioner to vacate the subject

property within fifteen (15) days from the date of notice under the

provisions of the Securitisation and Reconstruction of Financial

Assets and Enforcement of Security Interest Act, 2002 for taking

physical possession of the subject property, 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. Srinivas Chitturu, 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 16.06.2020 issued by respondent No.1

bank to vacate the subject property is behind its back, without ARR,J & KL,J W.P. No.8945/2020

impleading it in the petition filed under Section 14 of the

Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002 (hereinafter referred to as

'SARFAESI Act') and without giving an opportunity to it.

5. The petitioner is a tenant of property admeasuring 1650

square metres approximately with 5000 square feet shed and other

constructions located at Plot Nos.96, 97, 98, EPIP, Pashamylaram

Village, Patancheru Mandal, Sangareddy District (erstwhile Medak

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

petitioner entered into rental deed dated 20.06.2013 for a period of

three (03) years with respondent No.2, owner of the subject property,

and put in physical possession of the subject property. The said lease

was extended from time to time and latest rental deed is dated

13.06.2019 for a period of three (03) years. All the rental deeds are

unregistered instruments.

6. Respondent No.1 bank filed its counter affidavit. According

to it, respondent No.2 has availed loan from the bank by mortgaging

the subject property. Respondent No.2 has executed a registered

Memorandum of Deposit of Title Deed bearing document No.8062 of

2010, dated 28.08.2010 in favour of Vijaya Bank, which was merged

with respondent No.1 bank subsequently. Thereafter, respondent

No.2 became defaulter and its account became Non-Performing Asset

(NPA). Therefore, the bank has initiated measures under the

provisions of the SARFAESI Act for recovery of the said debt. In the ARR,J & KL,J W.P. No.8945/2020

said process, the District Magistrate, Sangareddy District, issued

proceedings under Section - 14 of the SARFAESI Act in favour of

respondent No.1 bank for vacating the petitioner from the subject

property and accordingly, notice dated 16.06.2020 was issued to the

petitioner to vacate the property within fifteen (15) days.

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

SARFAESI Act, respondent No.1 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 not aware 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 13.06.2019

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

tenable. The petitioner cannot continue to occupy the premises based

on legally untenable rental deeds. The alleged initial lease deed

executed was in the year 2013 i.e., three years after the creation of

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

lease deed is without consent or knowledge of the bank and as such,

the same is not binding on the bank.

ARR,J & KL,J W.P. No.8945/2020

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

would submit that the District Magistrate, Sangareddy passed the

order behind back of the petitioner and basing on the same, notice

dated 16.06.2020 was issued by respondent No.1 advising the

petitioner to vacate the subject property, and the same would amount

to violation of principles of natural justice and Articles-14 and 300-A

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

Limited and others1, Vishal N. Kalsaria v. Bank of India and

others2, Bajarang Shyamsunder Agarwal v. Central Bank of

India and another3 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, borrower,

availed loan from respondent No.1 bank in the year 2010 by

mortgaging the subject property/secured asset and that the petitioner

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

. (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.8945/2020

rental deed dated 13.06.2019 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, 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.

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

creditor for the assistance of taking possession of the secured asset, ARR,J & KL,J W.P. No.8945/2020

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 with 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 to 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 held

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

petitioner is not claiming protection under Rent Control Act.

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

of the Apex Court affirmed the principle laid down by it in Harshad ARR,J & KL,J W.P. No.8945/2020

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 by the execution of a registered instrument. In the absence of a registered instrument, if the tenant relies on an unregistered instrument or an ARR,J & KL,J W.P. No.8945/2020

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 lease. 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 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 by it in Harshad Govardhan Sondagar1 and Vishal N.

Kalsaria2 and held that the principle laid down in Vishal N.

Kalsaria2 would not help the tenant as the earlier case proceeded

with assumption of valid and bona fide tenancy. It was further held ARR,J & KL,J W.P. No.8945/2020

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 held in Harshad Govardhan Sondagar1 and

Vishal N. Kalsaria2 and 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 Chief

Metropolitan Magistrate after getting adjudication from him about the

validity of lease in favour of an occupant.

ARR,J & KL,J W.P. No.8945/2020

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 rental deed. The petitioner has filed copy of rental

deed dated 13.06.2019, wherein it is mentioned that the term of lease

is for a period of three (03) years. By virtue of the said unregistered

rental 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 16.06.2020 issued by

respondent No.1 - secured creditor advising the petitioner to vacate

the premises within fifteen (15) days. Therefore, respondent No.1

bank is having knowledge of the tenancy of the petitioner over the

secured asset by 16.06.2020, it issued the impugned notice to the

petitioner for vacating the subject property after obtaining orders ARR,J & KL,J W.P. No.8945/2020

from the Court under Section 14 of the SARFAESI Act without

impleading the petitioner herein.

. 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 held 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

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

purpose of taking possession of secured asset.

. 2018 (5) ALD 376 ARR,J & KL,J W.P. No.8945/2020

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

assets.

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

(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."

ARR,J & KL,J W.P. No.8945/2020

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 laid down 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 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

. 2016 (4) ALT 418 ARR,J & KL,J W.P. No.8945/2020

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

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

only by registered document. All other leases of immovable property ARR,J & KL,J W.P. No.8945/2020

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

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

. (2001) 5 SCC 259 ARR,J & KL,J W.P. No.8945/2020

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 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 ARR,J & KL,J W.P. No.8945/2020

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 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 ARR,J & KL,J W.P. No.8945/2020

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 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."

ARR,J & KL,J W.P. No.8945/2020

29. In the present case, respondent No.2 has executed a

registered Memorandum of Deposit of Title Deeds in favour of

respondent No.1 bank vide document No.8062 of 2010, dated

28.08.2010. The petitioner is claiming lease-hold rights under an

unregistered rental deeds dated 20.06.2013, 16.06.2016 and

13.06.2019. Admittedly, the initial rental deed said to have been

entered between the petitioner and respondent No.2 is three years

after the creation of mortgage in favour of respondent No.1 bank.

Pursuant to the amendment w.e.f. 01.04.1999 to Section 17 (1) (d) of

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

any period has to be compulsorily registered. In the present case, the

rental deed through which the petitioner is claiming lease-hold and

possessory rights for three years is an unregistered rental deed. The

latest rental deed is dated 13.06.2019 for a period of three (03) years

from 13.06.2019. Admittedly, one year period is over. Property is

immovable. Though the lessee and lessor agreed to register the lease

deed, they have not adhered to the said condition. Therefore, the

petitioner which is claiming lease-hold and possessory rights under an

unregistered rental deed not properly stamped, cannot question the

notice to vacate dated 16.06.2020 issued by respondent No.1 pursuant

to the order passed by the District Magistrate, Sangareddy 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 one year elapsed as held by the Apex Court at

paragraph No.36 of Harshad Govardhan Sondagar1.

ARR,J & KL,J W.P. No.8945/2020

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 District Magistrate, Sangareddy, 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 natural justice is alleged [See:

Whirlpool Corporation v. Registrar of Trade Marks, Mumbai9].

31. Since the matter is argued at length covering all 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 16.06.2020 issued by respondent No.1 pursuant to the

order passed by the District Magistrate, Sangareddy, asking the

petitioner to vacate the secured asset within fifteen (15) days. The

writ petition fails and accordingly the same is liable to be dismissed.

. (1998) 8 SCC 1 ARR,J & KL,J W.P. No.8945/2020

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

Petition is dismissed. 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