CANARA BANK Vs. SACHIN SHYAM

JUDGEMENT

(1.) The petitioner is a Banking Company constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. It has approached this Court being aggrieved by Ext.P7 order of the Chief Judicial Magistrate Court, Alappuzha, in proceedings under Sec. 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (hereinafter referred to as the 'SARFAESI ' Act) Act.

(2.) The petitioner, a secured creditor in respect of a loan availed by the 1st respondent, brought to sale an item of property in which the 3rd respondent claims to be a tenant under the provisions of the SARFAESI Act. The property was purchased by the 4th respondent. The application filed by the petitioner under Sec. 14 of the SARFAESI Act for obtaining vacant possession of the property has been rejected by the learned Magistrate finding inter alia the rights of the tenant cannot be defeated by the provisions in the SARFAESI Act. The learned Magistrate has concluded that the tenancy was created much before the creation of the mortgage, and therefore such tenants cannot be evicted by reporting to proceedings under Sec. 14 of the SARFAESI Act.

(3.) The learned counsel appearing for the petitioner submits that the learned Magistrate has travelled beyond the scope of Sec. 14 of the SARFAESI Act and has decided matters outside the purview of an enquiry under Sec. 14. It is submitted that the application under Sec. 14 of the SARFAESI Act was filed as the petitioner had not obtained physical possession of the secured asset. It is submitted that the application under Sec. 14 was maintainable and that there were no documents whatsoever to establish that the 3rd respondent was a bonafide tenant. It is submitted that the recovery proceedings initiated by the petitioner Bank have been thwarted by collusive action between the original borrower and the 3rd respondent. The learned counsel placed reliance on the judgments of the Supreme Court in Harshad Govardhan Sondagar v. International Assets Reconstruction Co.Ltd. and Ors; (2014) 6 SCC 1, Bajarang Shyamsundar Agarwal v. Central Bank of India; (2019) 9 SCC 94, Hemraj Ratnakar Salian v. HDFC Bank Ltd. and Ors. 2021 SCC Online SC 611 and the judgment of this Court in The Kottakkal Co-Operative Urban Bank v. T. Balakrishnan and Another; CDJ 2008 Ker HC 262, to contend that, in the absence of a registered agreement, the 3rd respondent could not claim any right as a tenant. It is also pointed out that, even after the sale of the asset in favour of the 4th respondent, the petitioner continued to be a secured creditor entitled to exercise the rights of a secured creditor u/s.14 of the SARFAESI Act in the light of the law laid down in ITC Limited v. Blue Coast Hotels Ltd and Others in (2018) 15 SCC 99.